Course Title: Introduction to Business Finance

Course Code: FIN-211

Credit Hours: 3+0
Course Instructor: Sibtain Fida (Sabtain.fida@gmail.com)

1. Course Introduction

This is a basic course in Business Finance for BBA program. The main objective of this
course is to prepare students to understand the language of business finance, the Corporate
Objective and basic terminology of Business Finance, the preparation of time value of
money, present and future value of money, then how to evaluate annuity concept in it. How
to evaluate the capital projects, calculation of cost of capital and optimal capital structure?

2. Prerequisites:

ITBF is an introductory course of finance and assumes that the student must have clear
Business Mathematics course

3. Textbook

a. Financial Management 13th Edition by Van C. Horne

b. Financial management by Brigham and Housten 13th edition

 You will be using first textbook as course book; so you must bring first book in every class
 You do not need to bring second one. We will have homework/assignments from second book.

4. Course Description:

This course is designed to introduce you to the fundamental issues of finance

and to the quantitative techniques used to address them. We will consider questions of
concern for both corporate financial managers and investments managers. When you
have successfully completed this course, you will be able to:

• Describe and evaluate the basic features of finance and role of financial manager
• Describe and evaluate the different financial markets
• Identify the basic components of nominal interest rates and use them to make expected
return comparisons among assets
• Apply time value of money concepts to complex cash flow scenarios
• Price bonds and other fixed-income financial assets
• Understand the basics of the term structure of interest rates and the yield curve
• Determine the fundamental price for common stock, using the constant-growth dividend
discount model
• Understand the basic structure of ratio analysis
• Evaluate alternative techniques for analyzing project opportunities and budgeting capital
• Apply the net present value criterion to complex capital budgeting problems

5. Reference Material:

 One Case Study will be solved from each topic provided you in advance.

6. Course Objectives:

To introduce the students to the field of Finance!! The course is designed to give an
understanding of the fundamental finance concepts like what is finance, what are the
basic issue that a financial manager face, what are the basic functions of financial
management, how we use time value of money to maximize our utility of funds,
evaluating the financial performance of a firm; derive the expected rate of return;
understand the valuation of financial securities; evaluate the long term projects; and
calculate the financing cost. The students should be able to identify link between the
concepts that they have learned/ are learning in the course to the financial decisions that
they are making in their personal as well as on-job lives. Since the course gives a basic
understanding of many areas in finance, the students after taking the course will be able
to identify the area/areas which interest them most. This will help the students in
selecting the elective courses in finance and ultimately in selecting their career path.

7. Course Outcomes:

After successful completion of this course, students will be able;

o To understand the language and concepts used in Business Finance
o To understand the time value of money and their application in our life
o To analyze and interpret the basic valuation of long term securities
o To calculate present and future value of money and evaluate the capital projects
basic techniques
o To prepare the cash budget, sale budget. And purchase budget for company
8. Assessment Instrument with Weights
a. Midterm 30%
b. End term 50%
c. Internal evaluation 20% (Quizzes 10%, Assignments 10%)

9. Details of Internal Evaluation (reference to Para 11, point c )

13.1 Quizzes: (10 out of 20 Marks, 10/20)
a. There will be five quizzes
b. Out of five quizzes, three best quizzes (based on your obtained marks in quiz) will
be selected for inclusion in your grade points
c. Each quiz carries 10 marks
d. There will be NO MAKE UP quiz for those who missed the quiz will get adverse
effect in his/her Grade Points.
e. I also reserve the right to give these quizzes as unannounced “pop” quizzes during
the semester.
 13.2 Assignments: (10 out of 20 Marks, 10/20)

a. There will be 04 main assignments that need to be furnished individually

b. Assignments should be made on class register, not on separate sheet
c. Marks will be obtained on efforts, completeness and correctness of questions
d. Each assignment has 10 marks and cumulatively weight as 10 in final grade
e. There will be no submission after dead line

9.2.1 Assignment No 1
9.2.1.1 Attempt all time value of money questions (Chapter 3) from Brigham
9.2.2 Assignment No 2
9.2.2.1 Attempt all Valuation of Securities questions (Chapter 3) from Brigham
Need to submit these both assignments before Mid Term
9.2.3 Assignment No 3
9.2.3.1 Attempt all Analysis of Financial Statements questions (Chapter 6) from
Brigham
9.2.4 Assignment No 4
9.2.4.1 Attempt all Capital Budgeting Questions (Chapter 8) from Brigham

Need to submit these both assignments before End Term

10. PARTICIPATION

Your active participation in class is necessary, both for you and for your classmates. Your
participation score will reflect my assessment of your attendance, your contributions to class
discussions, and your overall positive demeanor during class. If a student has completed all of
these following criteria’s he/she will be awarded 5 extra marks in internal evaluations

11. My Teaching Philosophy

It is important to me that each of you is successful in this course in terms of learning and in
terms of grades. However, it will depend on your attitude, hard work and desire to learn and
excel. I do not believe in spoon feeding and will expect you to take initiative. Come prepared
in the class, go through assigned readings and complete all the tasks and assignments given
to you. I will try to provide a conducive to learning environment in the classroom. I encourage
interaction and discussions. Do not hesitate to ask or to contact me if you have a question.
Don't wait until the last minute to work on assignments or prepare for the exams. Do not
delay. Procrastination in semester system is a sure way to failure. Exams and Assignments
will be due before you think they will be.

12. Weekly Topics that will be cover during class

Week Lecture
No No
TOPICS TO BE COVERED
Introduction of Business (Link with previous subject ITB)
1 1
Forms of business organizations & their characteristics
   sole proprietorship
  partnership
  Joint Stock Companies, Limited liability concept, Legal status and
process of their formation till IPO
  Difference between Pvt limited and Public Limited company
  Advantages and limitations of each business
  Hierarchy of a Company
Goal of the firm, difference between profit maximization and shareholders
wealth maximization, agency problems
Goals of a Financial Manager, Finance and accounting. What is financial
management? Difference between investing, financing and asset
2
management decisions. Formation of companies/financial statements of
companies Solution to end Questions (Van Horne Page 14)
Financial Markets, Money market vs capital markets; primary markets vs
3
secondary Market
2
Flow of Funds between different markets and role of Financial
4
Intermediations
Concept of Time Value of Money, Discussion of Time Line its importance,
5
3 Difference between Present Value and Compound Value concept
6 Solution of Question for Simple and Compound Interest
7 Annuity, Discussion of Annuity Questions
4
8 Effective interest verses compound interest. Questions and problems.
9 Solution of related Questions (Van Horne Self Correction and Problems)
5
10 Solution of related Questions (Van Horne Self Correction and Problems)
Valuation of Long Term Securities, Basic Concepts of Valuations, Different
11
6 Types of Bonds on the Basis of Valuations
12 Valuation of Bonds (Solution of Relevant Questions Van Horne Chapter 4)
13 Valuation of Stock, Different Types of Stocks on the Basis of Valuations
7
14 Valuation of Stock (Solutions of All remaining questions)
Flow of Funds, Sources and Uses of Funds, Discussion of Fund Flow
15
Statement and its uses in business environment (Ch. 07)
8
Adjustments in Fund Flow Statement (Solution to relevant Questions from
16
Van Horne Chapter 7)
17 MID TERM EXAMS
9
18 MID TERM BREAK
19 Midterm Paper display
10
20 Mid Term Paper Solution
21 Preparation of Cash Budget
11
22 Preparation of Sale and Purchase Budget
 Preparation of Forecasted Balance sheet and Income Statement with the
23
12 Adjustment of Cash
24 Solution to relevant Questions from Van Horne Chapter 7
25 Capital budgeting, Different capital budgeting techniques.
13
26 Discounted verses non-discounted techniques. Payback period method, IRR
14 27 Net present value method, Profitability index
28 Solution to relevant Questions from Van Horne Chapter 13
29 Revision of the Course
15
30 Revision of the Course