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

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COURSE SYLL BUSCourse Catalog: FIN 103 School Year: SY 2013-2014

Course Title: Principles of Finance Term: Second Semester

Credit: 3 Units [Major Subject] Instructor:

A. Course Description and Expected Learning OutcomeFIN 103 is a 3-unit course covering relevant topics regarding theory-based and relevantunderstanding of financial decision making. This course aims to introduce the students tothe tools and techniques of financial management, and their use to managerial decision-making. The course emphasizes the understanding of finance theory and working

knowledge of the financial environment in which the firm operates in order to developappropriate financial strategies.

Expected Learning Outcome:

1. To construct pro forma financial statements and determine a firms external financingneeds.

2. To understand the impact of the time value of money3. To analyze market prices, value drivers and financial measures and their relations to

fundamental value4. To value the equity, operations and debt of companies using different valuation

approaches/models and financial statement information5. To be able to identify the different types of financing and how they are used6. 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

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1stLONG 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

2ndLONG 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

3rdLONG EXAM (March 10-16, 2014)

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C. Required Reading! Keown, Martin, Petty. Foundations of Finance, 7thEdition. Prentice Hall. 2011

D. Supplementary Reading" Brigham, Houston. Financial Management Fundamentals, 12th Edition. Cengage

Learning Asia. 2011" Brealey, Myers, Marcus. Fundamentals of Corporate Finance, 5thEdition. McGraw-Hill.

2007. Solely distributed by C&E Publishing, (1672 Quezon Ave, South Triangle, QC)" Keown, Martin, Petty, Scott. Financial Management Principles and Applications, 10 th

Edition. Prentice Hall. 2005.

E. Course RequirementsThree 100-pt. Long Exams 80%Teachers Discretion 20%

TOTAL 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 EquivalentsFinal 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

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