PRINCIPLES OF BUSINESS FINANCE

SHE Level 2
SCQF Credit Points 20.00
ECTS Credit Points 10.00
Module Code M2N313331
Module Leader Sanjukta Brahma
School Glasgow School for Business and Society
Subject Finance and Accounting
Trimester
  • A (September start)

Pre-Requisite Knowledge

None.

Summary of Content

Rationale Financial resources are fundamental to business development and this module identifies the principles behind the management of these resources. As the students assess the relevance of the financial framework they also develop an awareness of the need for financial information. The module therefore brings together, at an early stage, the two pillars of finance theory and finance techniques. Summary of content The module will give an overview of financial management and the financial environment within which decisions are made. The financial principles involved in maximising owners' value, agency theory, risk and return will be examined. As well as the operations of the finance function and the application of corporate governance, the module will cover time value of money, NPV and other investment appraisal techniques including the valuation of stocks and bonds. The course will consider the impact of current developments in the capital markets on the investment process and look at their implications for financial management.

Syllabus

1. An overview of Financial Management. 2. The Financial Environment. 3. Capital Markets and Efficient Market Hypothesis. 4. Time Value of Money- Compounding, Discounting, Annuities and Perpetuities. 5. Present Value and Financial Arithmetic. 6. Valuation of Assets - Shares and Bonds. 7. Investment Appraisal Techniques.

Learning Outcomes

On successful completion of this module, the student should be able to:1) Analyze the role of a financial manager and the concepts surrounding business finance decision-making.2) Discuss the principle of time value of money3) Discuss the relationship between risk and return.4) Evaluate investments using NPV and other investment appraisal techniques.

Teaching / Learning Strategy

The module has been designed for delivery through lectures and seminars delivered on campus, supported by web-based material on Blackboard. The teaching and learning strategy will combine theoretical and illustrative content from lectures or directed learning/web-based materials and seminars. Students will be required to research web-based and other sources to prepare for seminars and coursework. All students will be directed to further reading to support the theoretical and practical content of the module. Assessment strategy The first piece of coursework will be a MCQ assessment with a weighting of 25%. It will focus on learning outcomes 1,2,3 and 4. The final exam will focus on all learning outcomes and will therefore have both theoretical and numerical content. The final exam will have a weighting of 75%. Feedback strategy A: Facilitating the development of self-assessment Students will be provided with formally assessed first course work to assess their main strengths and weaknesses in their knowledge base B: Encouraging dialogue Students will be asked to identify examples of feedback they find helpful and to communicate this by e-mail or Blackboard. C: Clarifying good performance Students will be provided with an overall analysis of what constituted good performance. D: Providing opportunities to close the gap between current and desired performance Feedback will identify action points for improving performance E: Delivering high quality information about your learning Feedback will prioritize the identified areas for improvement of above average performance as well as including corrective advice where weaknesses are found F: Encouraging positive motivational beliefs and self-esteem Strengths in performance will be identified in any feedback G: Providing information to teachers that can be used to help shape the teaching When students undertake a self assessment of their work, they will be asked to identify the most challenging areas of their assignments.

Indicative Reading

In addition to the main text, other texts, financial articles and web sites will be utilized on this module: Main texts: Pike R and Neale B, Corporate Finance and Investment, Decisions and Strategies, (Latest Edition), Prentice Hall Other texts: Brealey R A, Myers S C and Marcus A J, Fundamentals of Corporate Finance, (Latest Edition), McGraw-Hill. Megginson, W, Smart, S, and Lucy, B. Introduction to Corporate Finance, (latest Edition), South-Western Arnold G, Corporate Financial Management, (Latest Edition), FT Prentice Hall McLaney E, Business Finance, Theory and Practice, (Latest Edition), FT Prentice Hall. Brealey R A, Myers S C, and Allen A, Principles of Corporate Finance, (Latest Edition), McGraw-Hill. Financial sections of newspapers such as The Financial Times, and periodicals like the Economist, and the Investors Chronicle will be identified for reading on background issues and current developments. Company annual accounts and their web sites will be identified for information.

Transferrable Skills

Numeracy Skills - reflected in the numerical content of both course works and the final exam. Learning Skills - reflected in the use of the library and particularly in Internet activities to support student centered learning. Communication Skills - reflected in seminar and group discussion contributions. C&IT Skills - reflected in communicating information for coursework and their own student centered learning. Self Management Skills - reflected in the management and work for seminars, MCQ and final exams.

Module Structure

Activity Total Hours
Seminars (FDL) 11.00
Independent Learning (PT) 138.00
Seminars (FT) 11.00
Assessment (FDL) 15.00
Assessment (FT) 15.00
Lectures (FT) 36.00
Seminars (PT) 11.00
Lectures (PT) 36.00
Assessment (PT) 15.00
Independent Learning (FT) 138.00
Independent Learning (FDL) 138.00
Lectures (FDL) 36.00

Assessment Methods

Component Duration Weighting Threshold Description
Exam (Exams Office) 2.00 75.00 35% Exam
Coursework 0.00 25.00 35% MCQ