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Katipunan Avenue, Loyola Heights Quezon City, Philippines 1108 P.O. Box 154, Manila, Philippines PHONE (+632) 426 6001 ext. 5511 TELEFAX (+632) 426 6076 URL jgsom.ateneo.edu!

COURSE SYLLABUS
Course Catalog: Course Title: Credit: FIN 103 Principles of Finance 3 Units [Major Subject] School Year: Term: Instructor: SY 2013-2014 Second Semester

A. Course Description and Expected Learning Outcome FIN 103 is a 3-unit course covering relevant topics regarding theory-based and relevant understanding of financial decision making. This course aims to introduce the students to the tools and techniques of financial management, and their use to managerial decisionmaking. The course emphasizes the understanding of finance theory and working knowledge of the financial environment in which the firm operates in order to develop appropriate financial strategies. Expected Learning Outcome: 1. To construct pro forma financial statements and determine a firms external financing needs. 2. To understand the impact of the time value of money 3. To analyze market prices, value drivers and financial measures and their relations to fundamental value 4. To value the equity, operations and debt of companies using different valuation approaches/models and financial statement information 5. To be able to identify the different types of financing and how they are used 6. To determine a firms optimal capital structure and understand the theories/concepts behind the decision. B. Course Outline and Content ! Understanding Financial Statements and Cash Flows (Chapter 3) Balance Sheet, Income Statement, Statement of Retained Earnings, Net Cash Flow, Statement of Cash Flows (Indirect Method only) ! Evaluating a Firms Financial Performance (Chapter 4) Ratio Analysis, Economic Value Added The Du Pont Equations ! Short-Term Financial Planning (Chapter 14) The Sales Forecast The DFN Equation Cash Budget and Master Budget ! Working Capital Management (Chapter 15) Cash Conversion Cycle Estimating Cost of Short Term Credit: Accrued Wages and Taxes Unsecured Sources: Trade Credit, Bank Credit, Commercial Papers Secured Sources: Accounts Receivable Loans, Inventory Loans

1st LONG EXAM (December 9-14, 2013)

! Current Asset Management (Chapter 16) Collection and Disbursement Procedures Managing Cash Inflow and Cash Outflow: Float Marketable Securities Accounts Receivable Management Inventory Management ! Time Value of Money (Chapter 5) Future and Present Value; Ordinary Annuity, Annuity Due and Perpetuity Effective Annual Interest Rate (EAR) Loan Amortization ! Capital Budgeting Techniques and Practice (Chapter 10) Payback Period, Discounted Payback Period, Net Present Value, Profitability Index, Internal Rate of Return, Modified Internal Rate of Return, Capital Rationing, Ranking Mutually Exclusive Projects, Replacement Chains, Equivalent Annual Annuity

2nd LONG EXAM (February 10-14, 2014)

! Cash Flows and Other Topics in Capital Budgeting (Chapter 11) Estimating Cash Flows Initial Outlay, Annual Free Cash Flow, Terminal Cash Flow New Project Analysis, Replacement Analysis ! The Valuation and Characteristics of Bonds (Chapter 7) Bond Valuation, Bond Yield, Yield to Maturity ! The Valuation and Characteristics of Stocks (Chapter 8) Common Stock, Preferred Stock Valuing Preferred and Common Stocks Expected Rate of Return of Stockholders ! The Cost of Capital (Chapter 9) Cost of Debt, Preferred Stock and Retained Earnings Cost of New Common Stock, CAPM Composite, or Weighted Average, Cost of Capital, WACC Calculating Divisional Costs of Capital ! Determining the Financing Mix (Chapter 12) EBIT-EPS Indifference Point

3rd LONG EXAM (March 10-16, 2014)

C. Required Reading ! Keown, Martin, Petty. Foundations of Finance, 7th Edition. Prentice Hall. 2011 D. Supplementary Reading " Brigham, Houston. Financial Management Fundamentals, 12th Edition. Cengage Learning Asia. 2011 " Brealey, Myers, Marcus. Fundamentals of Corporate Finance, 5th Edition. McGraw-Hill. 2007. Solely distributed by C&E Publishing, (1672 Quezon Ave, South Triangle, QC) " Keown, Martin, Petty, Scott. Financial Management Principles and Applications, 10th Edition. Prentice Hall. 2005. E. Course Requirements Three 100-pt. Long Exams Teachers Discretion TOTAL 80% 20% 100%

Each long exam will be curved with a 60-point passing mark. Failure to reach the average of 1.00 in 3 exams will fail the course.

F. Grade Equivalents
Final Grade Curve A = 3.76 to 4.00 B+ = 3.31 to 3.75 B = 2.81 to 3.30 C+ = 2.31 to 2.80 C = 1.81 to 2.30 D = 1.00 to 1.80 F = Below 1.00

G. Classroom Policies 1. Absences and Lateness A total of nine absences for MWF classes, six absences for TTH classes and three absences for once a week classes for the entire semester will be allowed. Any student who exceeds this will be given a W. A student is marked absent when he/she is not in the classroom 10/15 minutes after the time. Students who arrive late should sit at the back to avoid class disruptions. In the absence of any prior announcement from the Department, the class must wait for the teacher for 30 minutes after classes have started. No free cuts shall be deemed given unless this time has passed. Students who leave before this time shall be marked absent. 2. Testing and Grading Three long exams, lasting three hours each, will be administered outside class hours. All of them are close-notes and closed books. No make-up exams will be allowed. A final mark of F will automatically be given to any student caught cheating in any exam. Appeals for rechecking must therefore be accomplished within ONE WEEK AFTER THE RESULTS ARE GIVEN OUT. If classes are suspended or cancelled on the date of a scheduled exam or quiz, it is understood the test will be given on the following meeting. Quizzes will be given every meeting. Students are required to study for the lessons that were taught or assigned readings for discussions. 3. Class Guidelines Turn off cellular phones or activate the silent vibration mode to avoid disrupting the class discussion. Students are expected to adhere to JGSOM Dress Code. Restroom needs should be attended to before or after the class, or during breaks between classes. It should not be done during class. Eating, drinking and smoking are not allowed inside the classroom. Students are highly encouraged to ask questions and contribute their insights and observations, as long as they are relevant to the subject matter being discussed. Disruptive students will be asked to leave the room. H. Contact Details and Consultations ! Regarding consultation, students may get in touch with their respective teachers using the following e-mail address: Students who wish to individually consult their teachers may arrange an appointment with them or through Mrs. Rosalie Mendoza, the Department Secretary.