Principles of Finance

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Professor:         Sara Robicheaux
Office Hours:     9:30-11:30am M&W or by appointment
Office:               Harbert 208                                         
Phone:              226-4828                            
Email:             srobiche@bsc.edu

Texts:  1) Fundamentals of Financial Management, Ninth Edition, Brigham and Houston; 2) How To Read A Financial Report, Fifth Edition, Tracy

Financial Calculator: It is essential that you have a financial calculator.  I suggest and use the Texas Instruments BA II Plus (about $30).  The authors’ of the book suggest the HP-10B.  If you buy that you must have the manual and learn how to operate it yourself.

Recommended Periodicals and Newspapers: Wall Street Journal, Economists, and Business Week. (Once you register online, most of the web editions are free)

Course Description: This course examines the theory and practice of corporate finance.  An introductory course in the principles of financial analysis directed at developing the tools necessary for sound financial decision making.  Major topics include an overview of the financial environment, valuation, financial forecasting, and capital budgeting.  

Course Objective: Finance is the cornerstone of the enterprise system.  General financial management is vitally important to the economic health of business firms and, hence, to the nation and world.  Because of its importance, finance should be thoroughly understood.  The course objective is to obtain a better understanding of general financial theory and financial management.

Student Expectations: Students are expected to read, comprehend and discuss the assigned chapter; be able to answer questions that appear in the chapter; and, work the assigned problems or cases for each chapter.  It is expected that students will have read the chapter before the class period in which it is discussed.  Students who are not prepared to present assigned problems or cases for each chapter or cannot answer questions in class regarding the assigned chapter will have their grade penalized accordingly.  

Attendance Policy: Excessive absences may adversely affect grade.  More than four absences are considered excessive.  Each additional absence may reduce grade by 10%.  The only excused absences are for official Birmingham-Southern College business.

Grading Policy:  Grades will be determined by total points received on participation, assignments, and exams.  Class attendance is strongly encouraged and will affect your participation grade.

Participation & Homework & Quizzes     15%

Midterm I (1-5)                                           20%

Midterm II (6-7)                                         20%

Midterm III (8-11)                                      20%

          Final Exam (Cumulative)                           25%                                    May 15, 6-9pm    

There will be no opportunities to make-up assignments.  I will not accept late homework and you may not makeup a missed quiz.  If you miss a midterm then your final exam will count 45% of your course grade. 

Mission Linked Goals for Division of Business

In support of the educational goals of the College, each of the majors offered through the Division of Business is based on two layers of student learning goals.  The first set, mission-linked goals, ties the learning outcome of the majors directly to the liberal arts mission of the College.  The mission-linked goals of the Division are:

Teamwork – to work productively with others
Decision-making – to analyze and synthesize the elements of a situation, general alternatives, and recommend a course of action
Critical Thinking – to gather, analyze and synthesize information and to identify misinformation, prejudice and one-sidedness
Communication skills – to make convincing arguments in both written and oral form
Global and cultural awareness – to think outside one’s own local contexts
Professional responsibility – to demonstrate appropriate professional demeanor and ethics
Independent learning – to organize one’s own research and learning
Interdisciplinary thinking – to integrate the breadth of one’s learning
Disciplinary depth – to gain competence in business administration, accounting, or economics
Technology – to gain experience in the use of relevant technology

 

The second set of student learning goals, disciplinary depth goals, defines the overall contents and skills expectations within each major.  The disciplinary depth goals are:

 

Students Completing the Accounting Major Should Understand:

The role of accounting in public and private companies and not-for-profit organizations
The language of accounting and its use in description events and transactions
The functions of accountings, including preparing financial, tax, and audit report, interpreting financial and cost data, making marketing decisions, projecting future performance, and consulting on tax strategy
How computer applications are used to improve the efficiency of all accounting work
The impact of taxation on decision-making
Issues, concepts, and application of tax law
Principles, procedures, and tests that are required elements of the audit test function
The importance of cost accounting to the organization and how it is used by management to make decisions

 

Students Completing the Business Administration Major Should Understand:

The basic functions of the financial manager, including forecasting and planning, evaluating the potential profitability of prospective investment opportunities, and evaluation the overall financial performance of the firm and the link to financial markets
The basic concepts of finance and economic theory and how those concepts support effective financial decision-making
The fundamental structures and use of financial statements in performing the functions of financial management
The political-economic environment effecting business decisions
The general structure and functioning of financial markets and price determination
The time value of money and the use of discounting and compounding tools in assessing intertemporal decisions
The process of capital budgeting as an integral part of strategic management
The underlying realization that successful management is entrepreneurial
The roles and responsibilities of a manager
The wide range of activities which managers undertake, including the steps that should be taken to plan, organize, lead, and control organizations effectively and efficiently
The concepts of strategic managements and what is means to think strategically.
The type of leadership that works best with certain situations and individual personalities
What it means to see change rather than stability as the nature of things
The manager’s responsibility for the creation of a collaborative workplace
The definitions of marketing, marketing management, the marketing concept and its role in the economic system, and its application to both profit and not-for-profit organizations
The “external” marketing environment and its impact on the firm and its marketing strategy
The elements of a marketing strategy
The role and purpose of marketing research and marketing information systems
The basics of consumer behavior
The channels through which products reach market
The marketing of services

 

Student Completing the Economics major Should Understand:

The fundamental principles and language of economics
The usefulness of economic modeling as a tool of rigorous analysis
The nature of markets and how they function
The role of economic theory in examination of public policy issues
The economic impact of actions taken by individuals, firms, governments, and other groups and organizations

 

Statement of Professional Responsibility

The faculty of the Division of Business and Graduate Programs, both collectively and as individual professors, feel that students should be accountable for developing the work habits and personal discipline which will be expected of them after graduation as professional members of the business community.  It is just as important that students reach satisfactory standards of written and oral communication skills as it is that they learn a satisfactory amount of accounting or management or marketing or finance.  It is just as important that students learn integrity and professional responsibility as it is that they learn economics or statistics.

 

Honor Code

Students are responsible for knowing and strictly abiding by the BSC Honor Code contained in the student Handbook.  When in doubt regarding any assignment, clarify instructions with the professor.

 

Course Outline:

Part I: Introduction to Financial Management

Chapter 1 – An Overview of Financial Markets

Chapter 2 – Financial Statements, Cash Flow, and Taxes

Chapter 3 – Financial Statement Analysis

Chapter 4 – Financial Planning and Forecast

Chapter 5 – The Financial Environment

Part II: Fundamental Concepts in Financial Management

Chapter 6 – Risk & Rates of Return

Chapter 7 – Time Value of Money

Part III: Financial Assets

Chapter 8 – Bonds and Their Valuation

Chapter 9 – Stocks and Their Valuation

Part IV: Investing in Long-Term Assets: Capital Budgeting

Chapter 10 – The Cost of Capital

Chapter 11 – The Basics of Capital Budgeting

Chapter 12 – Cash Flow Estimation and Risk Analysis

Chapter 13 – Other Topics in Capital Budgeting

Part V: Capital Structure and Dividend Policy

Chapter 14 – Capital Structure and Leverage

Chapter 15 – Distribution to Shareholders: Dividends and Share Repurchases

 


For problems or questions regarding this web contact [srobiche@bsc.edu].
Last updated: February 25, 2003.