1、Foundation of Financial ManagementModule syllabusTeacher Name: Zhanwei LiuSchool Name: Xuchang University1. Unit description Financial management is part of the decision-making, planning and control subsystems of an enterprise. It incorporates the treasury function, which includes the management of
2、working capital and the implications arising from exchange rate mechanisms due to international competition, evaluation, selection, management and control of new capital investment opportunities, raising and management of the long-term financing of an entity. The management of risk in the different
3、aspects of the financial activities undertaken is also addressed. Studying this course should provide you with an overview of the problems facing a financial manager in the commercial world. It will introduce you to the concepts and theories of corporate finance that underlie the techniques that are
4、 offered as aids for the understanding, evaluation and resolution of financial managers problems. This subject guide is written to supplement the Essential and Further reading listed for this course, not to replace them. It makes no assumptions about prior knowledge other than that you have complete
5、d Principles of accounting. The aim of the course is to provide an understanding and awareness of both the underlying concepts and practical application of the basics of financial management. The subject guide and the readings should also help to build in your mind the ability to make critical judgm
6、ents of the strengths and weaknesses of the theories, just as it should be helping to build a critical appreciation of the uses and limitations of the same theories and their possible applications.On successful completion of the module, learners will be able to: describe how different financial mark
7、ets function and estimate the value of different financial instruments (including stocks and bonds) make capital budgeting decisions under both certainty and uncertainty apply the capital assets pricing model in practical scenarios discuss the capital structure theory and dividend policy of a firm e
8、stimate the value of derivatives and advise management how to use derivatives in risk management and capital budgeting describe and assess how companies manage working capital and short- term financing 2. Pre-requisite units and assumed knowledgeAccounting, Economics3. Learning aims and outcomes Lea
9、rning Outcome 1Explain the method of financial analysis and planningASSESSMENT CRITERIA:a. Explain the goals and objectives of financial management b. Demonstrate a reasonable ability to prepare the three basic financial statementsc. Discuss the method of financial analysisd. Explain the operating l
10、everage, financial leverage. and combined leverageLearning Outcome 2Explain the manager how to manage working capitalASSESSMENT CRITERIA:a. Explain the context of risk-return analysisb. Explain the financial manager how to choose between liquid, low-return assets and more profitable, less liquid ass
11、etsLearning Outcome 3Explain the process of the capital budgetingASSESSMENT CRITERIA:a. Discuss the time value of money b. Explain the valuation of bonds and stocksc. Explain the cost of capital and capital structure d. Explain the capital budgeting decision and risk-return analysisLearning Outcome
12、4Explain the long-term financing in the capital marketsASSESSMENT CRITERIA:a. Explain the long-term debt and lease financing b. Explain the common stock and preferred stock financing c. Explain the dividend policy and retained earningsd. Explain the warrants and convertibles covered, as well as the
13、more conventional methods of financing 4. Weighting of final gradeGrades will be assigned on the basis of the following percentages: Attendance 10Participation 10*Group discussion 10*Presentation 20Quiz 20Final Exam (Learning outcome 2,3) 30Total 1005. GradingA 100-95 A- 94-90 B+ 89-87B 86-83 B- 82-
14、80 C+ 79-77C 76-73 C- 72-70 D+ 69-67D 66-63 D- 62-60 F 59 or lower6. PoliciesAttendance PolicyAttendance in class is a very important part of your learning experience. As such, failure to attend class will reduce your grade, and may be grounds for failure in the course. If you are late to class, you
15、r attendance score may also be affected. In the event of unavoidable absences, such as serious illness, or deaths in the family, students may be requested to provide documentary evidence of the reason for their absence to their academic coordinator. You should not give these to your instructor. Stud
16、ents are solely responsible for the makeup of any missed classes, and for obtaining any class materials or assignments that they may miss. You are expected to come to class prepared to actively participate in class discussions.Participation PolicyStudents should participate in their chosen classes a
17、ctively and effectively. The Participation Grade is related to the Attendance Grade. Students final attendance grade is the maximum of their participation grade.Participation grade will be based on a variety of factors including, but not limited to taking part in class discussions and activities, co
18、mpleting assignments, being able to answer questions correctly, obeying class rules, and being prepared for class, frequent visiting your instructors and chatting in English during their office hours is highly recommended.Policy on Assignments and QuizzesStudents should finish their assignments comp
19、letely and punctually. Assignment should be submitted on the date appointed by the instructor. If a student cannot hand in the assignment on time, the reasonable excuse will be needed. Late assignments will receive a maximum grade of 80. An assignment that is late for 3 days will be corrected but re
20、ceive 0.You are recommended print all your assignment in the uniform format with the heading of Students Pledge of no cheating. Written assignment or printed ones without the uniform heading of pledge will receive a maximum grade of 80.It is mandatory to have weekend assignment every week. Any weeke
21、nd assignment should be submitted on first class of next week. It is mandatory to have holiday assignment on the public holidays. Any holiday assignment should be submitted on the first day on returning to school. Students are required to do a multitude of presentations during the course.Plagiarism
22、and CopyingPlagiarism is using someone elses work or ideas as your own without giving them proper credit or copying someone elses work and presenting it as your own.There has a very strict plagiarism policy and will not tolerate academic cheating in any form. Penalties can be as severe as expulsion
23、from the university. At the very least, no one will receive any credit for assignments that appear to be copied from another student. To avoid plagiarism, do your own work, or cite the work of others appropriately. You can refer to the course catalogue for more information about plagiarism policy.If
24、 you cheat on the homework, I can guarantee you that you will fail the class. Every exam I give has several problems that require you to submit journal entries, create financial statements in proper form, or to create schedules showing certain details that you have to calculate. If you do not practi
25、ce doing these things by doing the homework yourself and correcting your own work in class, you will lose a significant number of points on the exams.Classroom Policies No eating, cellular phones, electronic dictionaries, smoking, chatting or drowsing in class. Please speak in English rather than Ch
26、inese in class. Students are not allowed to attend class without textbooks. Stand up when answering questions. Respect classmates ideas, opinions, and questions of your classmates. You are welcome to visit the instructors office in his/her office hours. Take good care of the laboratory facilities. D
27、o not splash water on the desktop. When each class is over, hang the earphone on the hanger. Put the trash into the trash-bin. All your classroom involvement, performance and after-class communications with instructor will affect your participation score.7. Texts and other recoursesThe primary textb
28、ook:Stanley B.Block. Foundation of financial management, 14th ed. The supplementary textbook:Richard A. Barealey et al(2011) fundamentals of corporate finance(6th ed.). Renmin university of China press WEB SITES:http:/my.londoninternational.ac.uk Teaching methodsDiscussions and Homework8. Session Pl
29、anWeek Duration Contents Chapters covered Outcomes covered1 2 Introduction and financial analysis Functions and goals of financial management(1a) Income statement, balance sheet, statement of cash flows(1b)1 212 2 Introduction and financial analysis Ratio and trend analysis(1c) Impact of financial 2
30、313 2 Financial forecasting Pro forma income statement(1c) Cash budget Pro forma balance sheet 4 14 2 Operating and financial leverage Operating leverage(1d) Financial leverage Combining operating and financial leverage5 15 2 Working capital and the financing decision Controlling assets.(2a) The fin
31、ancing decision Shifts in assets structure6 26 2 Current asset management Cash management(2b) Management of accounts receivable Inventory management7 27 2 Sources of short-term financing Trade and bank credit(2b) Use of collateral in short-term Accounting receivable financing, inventory financing8 2
32、8 2 The time value of money Future value, Present value(3a) The annuity value9 39 2 Valuation and rates of return Valuation of bonds(3b) Valuation of preferred stock Valuation of common stock 10 310 2 Cost of capital Cost of debt, preferred stock and common equity(3c) Optional capital structure The
33、margin cost of capital 11 311 2 The capital budgeting decision Accounting flows versus cash flows（3d） Capital rationing Net present value profile12 312 2 Risk and capital budgeting The concept of risk-averse(3d) Risk and capital budgeting process The portfolio and share price effect13 313 2 Capital
34、market , long-term debt and lease financing The introduction of capital market The expanding role of debs.(4a) Advantages and disadvantages of debts Leasing as a form of debt1415414 2 Common and preferred stock financing The common stock financing (4b) Preferred stock financing Comparing features of
35、 common and preferred stock and debt16 415 2 Dividend policy and retained earnings The marginal principles of retained earnings(4c) Dividend stability The factors influencing dividend policy Stock dividend and splits17 416 2 Convertibles, warrants ,and derivatives Convertible securities(4d) Financing through warrants Derivatives securities18 417 2 Feedback and Re-assessment
