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Financial Management Non Acct .Course Outline

This document provides a course outline for a financial management course offered at Addis Ababa University. The 3 credit course will introduce students to basic financial concepts like time value of money, risk and return, and capital budgeting techniques. It is divided into two parts: part one covers an introduction to financial management and financial statement analysis, while part two examines fundamental concepts like time value of money, risk and return, and long-term investment decisions. The objective is for students to gain literacy in finance and be able to undertake intermediate-level financial projects and evaluations after completing the course.

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Mahlet Ginbaru
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34 views3 pages

Financial Management Non Acct .Course Outline

This document provides a course outline for a financial management course offered at Addis Ababa University. The 3 credit course will introduce students to basic financial concepts like time value of money, risk and return, and capital budgeting techniques. It is divided into two parts: part one covers an introduction to financial management and financial statement analysis, while part two examines fundamental concepts like time value of money, risk and return, and long-term investment decisions. The objective is for students to gain literacy in finance and be able to undertake intermediate-level financial projects and evaluations after completing the course.

Uploaded by

Mahlet Ginbaru
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd
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Addis Ababa University

School of Commerce
Accounting and Finance program unit
Course Outline

Course Title: Financial Management


Course Code AcFn 3041 for Marketing Management and MGMT 4181 for
Management
ECTS 3
Academic Year 2015 E.C. (2022/23), 1st semester

Course Description

This course, Financial Management I, deals with the basic concepts and techniques of
financial management. The course addresses the issues that are encompassed in finance
in general and those deemed to be of relative relevance to the purported students in
particular. In the introductory part of the course, the nature, overall realm, and dimension
of financial management, and the whys and means of evaluation of financial performance
are discussed.

The second part that follows the introductory part of the course deals with such basic
concepts as the time value of money, risk and return, and valuation of financial assets. In
the last part, the nature, type, and technique of long-term investment decisions will be
covered.

Course Objective
After successful completion of this course, the student will be literate in finance and
could undertake intermediate-level project analysis and evaluation tasks.

Preview of the contents


Part One - Introduction
Chapter 1- An Overview of Financial Management
1.1 The nature and scope of financial management
1.2 Financial Markets and Institutions
 Financial institutions
 Cash flows to and form the firm
 Primary markets vs. Secondary markets
 Money markets vs. Capital markets
1.3 Financial management decisions
1.4 Goal of the firm
 Possible goals
 The goal of the firm and financial management

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1.5 Interest rates
1.6 Basic forms of business organizations

Chapter 2- Financial Statement Analysis


2.1 Purposes of financial analysis
2.2 Tools for financial analysis
2.3 Ratio Analysis
 Short term solvency or liquidity measures
 Long-term solvency measures
 Asset Management or turnover measures
 Profitability Measures
 Market Value Ratios (Measures)
2,4 Problems with financial statement analysis

Part Two - Fundamental Concepts in Financial Management

Chapter 3- The time value of money


3.1 Why money has a time value?
3.2 Future Value of a single amount
3.3 Present value of a single amount
3.4 Future value of annuity
3.5 Present value of annuity
3.6 Special Case of Annuities
3.6.1 Perpetuities
3.6.2 Deferred Annuity
3.7 Uneven Cash Flow Streams
3.8 More frequent compounding
 Compounding for less than a year
 Effective annual rate and the nominal rate

Chapter 4- Risk and Return


4.1 Understanding and Measuring Risk
 Probability distributions
 Measures of Central tendency
 Measures of dispersion
4.2 Portfolios
 Portfolio weights
 Portfolio expected returns
 Portfolio risk

4.3 Diversification and portfolio risk


 The principle of diversification
 Diversification and unsystematic risk

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 Diversification and systematic risk
 Measuring systematic risk
 Portfolio betas
4.4 Risk and the required rate of return
 CAPM
 The security market line

Chapter 5 Long Term Investments decisions (Capital budgeting


decisions)

5.1 The capital budgeting decision process


 Steps in the process
 Motives of long-term investments
 Basic terminologies
5.2 Cash flows
 The rational for the use of cash flows
 The cash flow after-tax (CFAT)
 Components of a project's cash flows
 Cash flow worksheet

5.3 Capital budgeting techniques


Discounted and non-discounted decision criteria and rules under
 Accept-reject decisions
 Mutually exclusive decisions
 Capital rationing decisions

5.4 Methods for incorporating risk in to capital budgeting


 Risk adjusted discount rate
 Certainty Equivalents
 Sensitivity and Scenario analysis

Reference Books

1. Ross, S.A., Westerfield, and Jordan, Fundamentals of Corporate Finance, 2nd


edition, Richard D. IrwinInc.,1993
2. Weston, J.F., and Brigham, E.F., Essentials of Managerial Finance, 7th edition,
The Dryden Press, Illinois, 1985
3. Nevue, R.P., Fundamentals of Managerial Finance, 2nd edition, South-Western
Publishing Co., Ohio, 1985
4. Gitman, L.J., Principles of Managerial Finance, 7th edition, Harper Collins, 1994
5. Petty & et. A., Basic Financial Management, 6th edition, Prentice-Hall, Inc., 1993

N.B. Any book dealing with financial management might be relevant

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