BFN-253: Principles of Finance

School
Business, Entrepreneurship, and Professional Development
Division
Business & Economics
Department
Economics & Finance
Academic Level
Undergraduate
Course Subject
Business Finance
Course Number
253
Course Title
Principles of Finance
Credit Hours
3.00
Instructor Contact Hours Per Semester
47.00 (for 15-week classes)
Student Contact Hours Per Semester
47.00 (for 15-week classes)
Grading Method
A-E
Pre-requisites
BAC-131 with a C grade or better AND BBA-131 with a C grade or better
Catalog Course Description

Introduces the fundamentals of financial management, financial statements, time value of money, interest rates, and stocks and bonds. Also examines capital budgeting models, cash flow analysis, working capital management, financial ratio analysis, and firm performance.

Goals, Topics, and Objectives

Core Course Topics
  1. Introduction to Financial Management
    1. Define financial management, and explain the main areas in finance.
    2. Identify the relationship of the financial manager to other corporate functions.
    3. Explain the various legal forms of business.
  2. Financial Statements
    1. Analyze financial statements.
    2. Calculate cash flow.
  3. Time Value of Money
    1. Explain the time value of money.
    2. Calculate the future value and present value of a lump-sum payment.
    3. Evaluate the future value and present value of annuities.
  4. Interest Rates
    1. Describe annual percentage rate (APR), compounding periods, the periodic interest rate, and the effective annual rate (EAR).
    2. Explain nominal and real interest rates, risk-free rates, and premiums.
  5. Stocks and Bonds
    1. Discuss the characteristics of stocks, the stock market, and stock valuation.
    2. Discuss the characteristics of bonds, the bond market, and bond valuation.
  6. Capital Budgeting Models
    1. Calculate the payback period, net present value, and internal rate of return.
    2. Compare and contrast valuation techniques.
  7. Cash Flow Analysis
    1. Examine cash flow and its impact on the growth of a business.
    2. Assess the incremental cash flow for a new project.
  8. Working Capital Management
    1. Explain and calculate production, collection, and payment cycles.
    2. Discuss managing accounts receivable, float, and inventories.
  9. Financial Ratio Analysis
    1. Analyze performance using short-term (liquidity) and long-term (leverage) solvency ratios, asset management ratios, and profitability ratios.
    2. Calculate market value ratios.
    3. Compare a firm’s ratios with industry averages.
  10. Capital Funding
    1. Discuss the business life cycle and the problems and opportunities in each phase.
    2. Compare and contrast sources of capital.
  11. Dividends, Dividend Policy, and Stock Splits
    1. Explain the declaration date, ex-date, record date, and payment date.
    2. Discuss low-, high-, and no-dividend payout policies.
    3. Examine stock dividends, stock splits, and reverse splits.

Assessment and Requirements

Assessment of Academic Achievement

Students will be assessed through tests, quizzes, assignments, and/or class participation.

Effective Term
Fall 2020