1. NAME OF COURSE  / MODULE PRINCIPLES OF FINANCIAL MANAGEMENT
2. COURSE CODE MFA2013
3. NAME(S) OF ACADEMIC STAFF  
4. RATIONALE FOR THE INCLUSION OF THE COURSE/MODULE IN THE PROGRAMME This course introduces the students with the fundamentals principles and concepts of financial management in a business entity.  Students are being exposed to the sources and usage of information in making decision.
5. SEMESTER & YEAR OFFERED Semester 3 &4 /  Year 2
6. TOTAL STUDENT LEARNING TIME (SLT) Face to face:

L T P O
28 23 9 8

L=lecture ; T=Tutorial; P=Practical; O=Others (Exam)

Total Guided and Independent Learning:

120
7. CREDIT VALUE 120/40 = 3.00 (3 credit); 2+2
8. PREREQUISITE (IF ANY) NIL
9. OBJECTIVES 1. To improve students’ knowledge in theories and principles of financial management

2. To highlight students on the valuation principles and how it can be used to improve value of the firm.

3. To equip students with ample knowledge on how to make long term investment decisions.

4. To familiarize students with the importance of working capital management.

10. LEARNING OUTCOMES At the end of the course, learners will be able to:

1. Describe the principles of financial management. (LO1, C2)

2. Use financial calculator and construct excel template (LO2, P4)

3. Construct better long term investment decision. (LO3, C3)

4. Explain the importance of working capital management. (LO2, C3)

5. Describe capital investment decision process and apply its technique. (LO1, C6)

6. Describe relevant Quran or Hadith verses relating to the basic financial management principle (LO10, PAN 1)

11. TRANSFERABLE SKILLS Student should be able to make optimum financial decision through a process of lectures, tutorial and group discussion.
12. TEACHING-LEARNING AND ASSESSMENT STRATEGY Teaching-learning strategy:

· The course will be taught through a combination of formal lectures, exercise, group work, using authentic materials, informal activities and various textbooks. Collaborative teamwork will be fosters throughout the course. The use of examination and internal reporting assessment will assess the student’s ability to apply theoretical concept in context.

Assessment strategy:

· Formative

· Summative

13. SYNOPSIS This course introduces the students with the fundamentals, principles and concepts of financial management in a business entity.  Students are being exposed to the sources and usage of information in making decision.  Some of the aspects covered in the course are time value of money, risk and return, financial planning, working capital management, strategic investment decision making and assets (securities) valuation.
14. MODE OF DELIVERY Lectures and tutorial (SCL)
15. ASSESSMENT METHODS AND TYPES
Component %
Continuous Assessment 50
Final examination 50
Total 100
16. CONTENT OUTLINE OF THE COURSE/MODULE AND SLT PER TOPIC
Topic Lecture Tutorial Test/Quiz/Exam Assessment (Library Search) Practical Self-study/Library research Total
Introduction to Financial Management 1 1 1.5 3.5
Financial Statements, Taxes, & Cash Flow 1 1 1.5 3.5
Financial Statement Analysis 2 2 3 7
Financial Planning 4 3 6 13
Time Value of Money 4 3 6 13
Bond Valuation 2 2 3 7
Stock Valuation 2 2 3 7
Risk and Return 4 3 6 13
Capital Budgeting 4 3 6 13
Cost of Capital 2 2 3 7
Working Capital Management 2 1 3 6
Continuous Assessment: Test/Quiz/Assessment 5 10 15
FINAL 3 9 12
TOTAL 28 23 8 10 19 42 120
17. REFERENCES Main reference:

1.     Ross S.A. 2012, Westerfield, R.W., Jordan B.D., Lim J., Tan R.,  Fundamentals of Corporate Finance,9th Edition (AsianGlobal Edition),  McGraw Hill.

Additional references:

1.     Rosly, S.A. (2005). Critical Issue on Islamic Banking and Financial Markets: Islamic Economics, Banking & Finance, Investment, Takaful and Financial Planning. Kuala Lumpur: Dinamas Publishing.

2.     Petty. J. W., Keown, A. J.,Scott, D. F, and Martin, J. D. 2005. Basic Financial Management. Prentice Hall International. 10th Edition.

3.     Besley, S. & Brigham, E. F.2006. Principles of Finance. 3rd Edition. (Ohio: South-Western).

4.     Van Homrne, J. C. and Wachowicz, J.M., 2005. Fundamentals of Financial Management. 12th edition. Prentice Hall.

5.     Brigham, E. F. & Houston, J.F. 2007. Essentials of Financial Management. Thompson. Singapore.

 

Mapping of the course/module to the Programme Learning Outcomes

TOPIC

Contact hours

(week)

Lesson Learning Outcome (Students are able to…)

CLO KI Teaching & Learning Activities Assessment Tasks
Introduction to Financial Management

·   Basic type of financial management decision and role of financial manager

·   Goal of the firm.

·   Form of businesses i.e. Musyarakah and Mudarabah

·   Principles of financial management.

4

(2)

1.   Describe what the subject of financial management is about.

2.   Describe the goal of financial management and the reason behind that goal

3.   Compare the various legal form of businesses.

LO1

LO1

LO2

o Lecture

o Tutorial activity – exercises

·  Feedback on library search
Financial Statements, Taxes,  Zakat & Cash Flow

·   Income Statament and Balance Sheet.

·   Measuring free cash flows.

4

(2)

1.   Summarize the information generated by financial statement.

2.   Identify the differences between accounting income and cash flow.

3.   Measure a company’s free cash flows.

4.   Compute basic company’s tax and zakat.

LO2

LO2

o Lecture

o Library Search (Issues in Corporate Finance)

o Tutorial activity – exercises

·  Feedback on tutorial activity
Financial Statement Analysis

·   Evaluating a firm’s financial performance.

·   The DuPont analysis

4

(3)

1.   Explain the financial performance of the company through financial ratio analysis.

2.   Apply the du pont analysis in evaluating firm’s performance

3.   Explain the limitations of ratio analysis.

LO2

LO3

LO2

CTPS3 o Lecture

o Tutorial activity – exercises

 

·  Feedback on tutorial activity
Financial Planning

·   Financial forecasting.

·   Percent of sales forecast method.

·   Sustainable growth rate.

·   Financial Planning and budgeting/

4

(3)

1.   Use the percent of sales method to forecast the financing requirement of a firm.

2.   Predict a firm’s sustainable growth rate.

3.   Produce a cash budget to determine a firm’s financing needs.

LO1

LO2

LO3

CTPS3 o Lecture

o Tutorial activity – exercises

 

·  Feedback on tutorial activity
Time Value Of Money (TVM)

·   Compounding system.

·   Lump sum, FV, PV

·   Annuities, FVA, PVA, PMT

·   Perpetuities

·   Complex stream of cash flows

·   TVM from Islamic perspective

4

(4)

1.   Explain the mechanism of compounding.

2.   Determine the future and present value of single or annuity cash flows.

3.   Solve complex cash flow problems

LO1

LO2

LO3

CTPS3 o Lecture

o Tutorial activity – exercises

·  Feedback on tutorial activity
Capital Budgeting

·   Finding profitability projects

·   Decision criteria (PB, DPB, NPV, IRR, MIRR. ARR, PI)

4

(5)

1.   Discuss the difficulty of finding profitable projects in competitive market.

2.   Illustrate how to choose profitable projects using capital budgeting criteria.

LO2

LO3

CTPS3

ES1

o Lecture

o Tutorial activity – exercises

·  Feedback on tutorial activity
Bond Valuation

·   Types and characteristics of bond.

·   Valuation of bond.

·   Yield to maturity (YTC) and Yield to Call (YTC)

4

(6)

1.   Identify different types of bonds.

2.   Estimate value of bond.

3.   Compute bondholder’s expected rate of return.

LO1

LO2

LO3

CTPS3 o Lecture

o Tutorial activity – exercises

·  Feedback on tutorial activity
Stock Valuation

·   Types and characteristics of stocks

·   Valuation of stock

·   Expected rate of return

4

(7)

1.   Identify basic characteristics and features of stocks.

2.   Estimate value of common and preferred stocks.

3.   Compute investor’s required rate of return.

 

LO1

LO2

LO3

CTPS3 o Lecture

o Tutorial activity – exercises

·  Feedback on article searching
Risk and Return

·   Relationship between risk and return.

·   The term structure of interest rates.

·   Expected return.

·   Risk and diversification.

4

(8)

1.   Describe the relationship between the average returns and risks.

2.   Explain the term structure of interest rates.

3.   Measure the expected return and risk of an individual investment.

4.   Estimate the expected return and risk of  a portfolio investment.

LO1

LO2

LO3

LO3

CTPS3 o Lecture

o Tutorial activity – exercises

·  Feedback on tutorial activity
Cost of Capital

·   Definitions and concepts

·   Determining individual cost of capital.

·   Overall (Weighted Average) cost of capital

4

(9)

1.   Explain the concepts underlying the firm’s cost of capital.

2.   Estimate individual and overall (weighted average) cost of capital.

3.   Use the cost of capital to evaluate new investment opportunities.

LO1

LO3

CTPS3

ES1

o Lecture

o Tutorial activity – exercises

·  Feedback on tutorial activity
Working Capital Management

·   Short-term Financial Planning

·   Cash Management

·   Credit Management

8

(10-11)

1.   Describe the importance of working capital management.

2.   Explain the concept of hedging principle.

LO1

LO2

CTPS3 o Lecture

o Tutorial activity – exercises

·  Feedback on tutorial activity