STATE UNIVERSITY OF NEW YORK
COLLEGE OF TECHNOLOGY
CANTON, NEW YORK
COURSE OUTLINE
FSMA 210 – INTRODUCTION TO FINANCE
Prepared By: Dr. Chengru Hu
SCHOOL OF BUSINESS AND LIBERAL ARTS
BUSINESS DEPARTMENT
FALL 2008
1
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Introduction to Finance (FSMA 210) Course Outline - Prof. Chengru Hu, Lab Reports of Finance
This is the course outline for fsma 210 - introduction to finance, offered by the school of business and liberal arts at the state university of new york college of technology in canton, new york. The course covers fundamental elements of business finance, including financial analysis, time value of money, security valuations, risk and return, capital budgeting, and corporate decision-making. It is a 3-credit course offered in the fall and spring semesters, with 3 lecture hours per week. Students will learn to identify the job functions of financial managers, compute common financial ratios, calculate time value of money, apply fundamental concepts in the analysis of financial instruments, and describe concepts of risk and capital budgeting. The course uses the fundamentals of financial management, 11th edition, by brigham and houston as the main textbook.
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STATE UNIVERSITY OF NEW YORK
COLLEGE OF TECHNOLOGY
CANTON, NEW YORK
COURSE OUTLINE
FSMA 210 – INTRODUCTION TO FINANCE
Prepared By: Dr. Chengru Hu SCHOOL OF BUSINESS AND LIBERAL ARTS BUSINESS DEPARTMENT FALL 2008
FSMA 210 – INTRODUCTION TO FINANCE
A. TITLE: Introduction to Finance B. COURSE NUMBER: FSMA 210 SHORT TITLE: Intro Finance C. CREDIT HOURS: 3 credits D. WRITING INTENSIVE COURSE: NA E. COURSE LENGTH: 15 weeks F. SEMESTER(S) OFFERED: Fall and Spring G. HOURS OF LECTURE, LABORATORY, RECITATION, TUTORIAL, ACTIVITY: 3 lecture hours per week H. CATALOGUE DESCRIPTION: This introductory course covers fundamental elements of business finance. Discussions will include the concepts of financial analysis, time value of money, security valuations, risk and return, capital budgeting, and other issues in corporate decision- making. I. PRE-REQUISITES/CO-COURSES: CITA 110 and GER Math or ACCT 101 J. STUDENT LEARNING OUTCOMES: Upon completion of this course, students will be able to do the following:
- Identify the job functions of financial managers
- State the ethical consideration of financial managers
- Compute common financial ratios and utilize these ratios to evaluate the performance of a corporation
- Calculate time value of money
- Apply fundamental concepts in the analysis of common financial instruments such as loans, corporate bonds and common stocks.
- Describe concepts of risk, and risk-return tradeoff.
- Solve basic capital budgeting problems.
- Describe key issues in corporate financial decision-making. K. TEXT: Fundamentals of Financial Management , 11th^ edition, by Brigham and Houston, Thomson South-Western, 2004 L. REFERENCES:
- Essentials of Corporate Finance , 6th^ edition (ISBN-13 9780073313054), by Ross, Westerfield and Jordan, McGraw Hill Higher Education, 2008
- Cases in Finance , 2nd^ Edition (ISBN-13 9780072983227), by Jim DeMello, McGraw-Hill/Irwin
DETAILED OUTLINE
FSMA 210 – INTRODUCTION TO FINANCE
TOPICS
Part I: Introduction to Financial Management
- An Overview of Financial Management A. Career opportunities in finance B. Alternative forms of business organizations C. Responsibilities of the financial managers D. Goal of the corporation E. Agency relationship
- Financial Statements, Cash Flow, and Taxes A. Financial statements and reports o The balance sheet o The income statement o Statement of cash flow o Statement of retained earnings B. Net cash flow C. Modify accounting data for managerial decisions D. Market Value Added (MVA) and Economic Value Added (EVA) E. The federal income taxation system
- Analysis of Financial Statements A. Ratio analysis o Liquidity ratios o Asset management ratios o Financial leverage ratios o Profitability ratios o Market value ratios B. Comparative ratios and “benchmarking” C. Trend analysis D. The Du Pont equation E. Uses and limitation of ratio analysis
- The Financial Environment: Markets, Institutions, and Interest Rates A. Introduction to financial markets B. Introduction to financial institutions C. The stock market o Physical location market o OTC market D. The cost of money E. Determinants of market interest rate F. The term structure of interest rates G. Factors influence the level of interest rate and the shape of yield curve H. Interest rate and business decisions Part II: Fundamental Concepts in Finance
- Risk and Rates of Return A. Expected rate of return B. Risk o Stand-alone risk o Risk in a portfolio context C. Risk aversion and required returns D. Diversification o Diversifiable risk versus market risk o Beta coefficient E. Capital Asset Pricing Model (CAPM) and Security Market Line (SML) F. Factors that influence the shape of SML G. Physical assets versus securities
- Time Value of Money A. Time line B. Future value (FV) and compounding o FV of a single cash flow o FV of an annuity o FV of uneven cash flows C. Present value (PV) and discounting o PV of a single cash flow o PV of an annuity o PV of perpetuities o PV of uneven cash flows D. Interest rates o Nominal, or quoted, or APR rate o Periodic rate o Effective, or equivalent, annual rate (EAR) E. Amortized loans
B. Capital structures and leverage C. Corporate dividend policy D. Short-term financial planning o Current asset management o Current asset financing