ATENEO DE DAVAO UNIVERSITY

School of business and Governance

COURSE OUTLINE

Subject Title:

BASIC BUSINESS FINANCE

Semester/SY:

1st Semester 2016-2017

No. of Units:

3 Units

Time Schedule

1.5 hours TTh Schedule , 1 hour MWF Schedule

Target Students:

2nd Year SBG Students

Grading System
Exam
Quizzes
Assignments
Seatwork
Recitation
TOTAL
Consultation Hours

50%
30%
6%
7%
7%
100%

Fridays 3:40pm
Lecturer
Ms. Bai Charity Pandita, REB, CIS

Syllabus for Basic Business Finance Fin 202

Topics

Introduction

Learning Objectives

Basic rules and regulations

At the end of the session, the student is able to:

Chapter 1. The
Role of Managerial 1. Define finance and the managerial finance function in
Finance
the financial services.
2.

3.

4.
5.
6.

At the end of the session, the student is able to:

1.
2.
3.
4.
5.
6.

Understand the role that financial institutions play in

managerial finance.
Contrast the functions of financial institutions and
financial markets.
Point out the differences between the capital markets
and the money markets.
Explain the root causes and subsequent effects of the
2008 financial crisis and recession.
Understand the major regulations and regulatory
bodies that affect financial institutions and markets.
Discuss business taxes and their importance in
financial decisions.

Quiz
Chapter 3:
Financial
Statements and
Ratio Analysis

At the end of the session, the student is able to:

1.

2.
3.

Tentative
Dates

(MWF)

(TTh)

Nov 7,9

Nov 8

Nov
14,16,18,2
1,23

Nov
15,17,22,24

Nov 26

Nov 26

Nov 25,
28,

Nov 29

Distinguish the advantages and disadvantages of

alternative forms of business organization by providing
examples of local businesses on how they operate
based on their form of business.
Describe the goal of the firm, and explain why
maximizing the value of the firm is an appropriate goal
for a business.
Describe how the managerial finance function is
related to economics and accounting.
Identify the primary activities of the financial manager.
Compare the career opportunities available within the
three interrelated areas of finance.

Online QUIZ
Chapter 2: The
Financial Market
Environment

Tentative
Dates

Review the contents of the stockholders report and

the procedures for consolidating international financial
statements.
Understand who uses financial ratios and how.
Use ratios to analyse a firms liquidity and activity.

Dec 1

Dec 2

Dec 5

Dec 6

Dec 7, 9,
12

Dec 6, 8

(Part 1)
Quiz

Dec 15

Dec 13

PRELIM EXAM

Dec 16

Dec 15

Computation of Grades

Jan 4, 6

Jan 5

Jan 9, 11,
13

Jan 10, 12

Jan 16

Jan 17

Jan 18, 20,

23, 25, 27

Jan 17, 19,

24, 26

Jan 30

Jan 31

Chapter 3:
Financial
Statements and
Ratio Analysis
(Part 2)

4.
5.
6.

Discuss the relationship between debt and financial

leverage and the ratios used to analyze a firms debt.
Use ratios to analyze a firms profitability and its
market value.
Create a summary of financial ratios and the DuPont
system of analysis to perform a complete ratio
analysis.

Quiz
Chapter 5: Time
Value of Money

At the end of the session, the student is able to:

1.

Appreciate the role of time value in finance, the use of

computational tools, and the basic patterns of cash
flow.
2. Use the Financial Calculator/ scientific calculator in
computing for the Time value of money problems.
3. Understand and compute the concepts of future value
and present value, their calculation for single amounts,
and the relationship between them as applied in
financial transactions in banks, lending firms and other
financial institutions.
4. Find the future value and the present value of both an
ordinary annuity and an annuity due, and find the
present value of a perpetuity.
5. Calculate both the future value and the present value
of a mixed stream of cash flows.
6. Point out the effect that compounding interest more
frequently than annually has on future value and the
effective annual rate of interest.
7. Construct a schedule or table applying the procedures
involved in (1) determining deposits needed to
accumulate a future sum, (2) loan amortization, (3)
finding interest or growth rates, and (4) finding an
unknown number of periods.
8. Choose among investment options which investment
that maximizes financial benefits and minimizes all
costs.

Quiz
Chapter 6 Interest
Rates and Bond
Valuation

At the end of the session, the student is able to:

1.
2.

Describe interest rate fundamentals, the term

structure of interest rates, and risk premiums.
Review the legal aspects of bond financing and bond
cost.

Jan 31
Feb 1, 3,
6, 8

Feb 2, 7

3.
4.
5.

6.

Discuss the general features, yields, prices, popular

types, and international issues of corporate bonds.
Understand the key inputs and basic model used in the
valuation process.
Apply the basic valuation model to bonds and describe
the impact of required return and time to maturity on
bond values.
Explain yield to maturity (YTM), its calculation, and the
procedure used to value bonds that pay interest
semiannually.

Quiz

Feb 10

Feb 9

MIDTERM Exam

Feb 13

Feb 14

Feb 15 ,
17, 20, 22

Feb 16, 21,

23

Quiz

Feb 24

Feb 23

Grade Consultation MIDTERM

Feb 27

Feb 28

Chapter 7 Stock
Valuation

At the end of the session, the student is able to:

1.
2.

Differentiate between debt and equity.

Explain what is the role and function of Philippine
Stock Exchange as an equity market in the country.
3. Distinguish the features of both common and
preferred stock.
4. Describe the process of issuing common stock,
including venture capital, going public, and the
investment banker.
5. Explain the concept of market efficiency and basic
stock valuation using zero-growth, constant-growth,
and variable-growth models.
6. Calculate the free cash flow valuation model and the
book value, liquidation value, and price/earnings (P/E)
multiple approaches.
7. Explain the relationships among financial decisions,
return, risk, and the firms value.

Mar 1
Chapter 8 Risk and
Return

At the end of the session, the student is able to:

1.
2.
3.

4.

5.

Understand the meaning and fundamentals of risk,

return, and risk preferences in asset evaluation.
Describe procedures for assessing and measuring the
risk of a single asset.
Calculate the measurement of return and standard
deviation for a portfolio and the concept of
correlation.
Explain the risk and return characteristics of a portfolio
in terms of correlation and diversification, and the
impact of international assets on a portfolio.
Relate to actual data the two types of risk and the
derivation and role of beta in measuring the relevant
risk of both a security and a portfolio.

Mar 3, 6,
8, 10

Mar 2, 7, 9

6.

Explain the capital asset pricing model (CAPM), its

relationship to the security market line (SML), and the
major forces causing shifts in the SML.

Quiz

Mar 13

Mar 14

Pre-Final Exam

March 17

March 16

Departmental

March 2025

March 2025

Final Grade Consultation

Before
March 31

Before
March 31