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Spring 2005 online
Instructor: Reynolds Griffith
Office: BUS 392o
Office hours: I will not have regular oncampus office hours since I
am teaching only web courses.
Virtual office hours (email checked & replied frequently): MTThF 8:30-9:30 A.M,
W 12:00-1:00P.M.
(This means you should get a reply to any email question no later than the end of the next
virtual
office hours.)
Office phone: 468-1883 Home phone: 940-898-0101 (please do not call after 9:00 pm)
E-mail: RGRIFFITH@SFASU.EDU
Web home page: titan.sfasu.edu/~F_Griffith/
Fax: 936-468-1447
Text: Gitman, Principles of Managerial Finance,Brief 3rd Edition (This is the
same text used in the Spring 2004 semester, oncampus sections are using a different text
for the Spring 2005 semester.)
Available from University
Bookstore or other sources
There is an accompanying website for
the text. The access code for signing up for the text site is in the front of the
text.(The access code is not necessary to use some of the materials - e.g. the self
assessment quizzes)
The Wall Street Journal is recommended, but not required - see information on student
subscriptions, which include access to The Wall Street Journal online.
EXAMS.There will be three exams, including the final, plus the mastery
exam described below. Each will be given on campus on a pre-announced evening
. If you are not within easy driving distance of the campus, you may arrange for a
proctored exam. Contact me at least a week
before the exam to work out the details and get the forms sent to the proctor. Each of these exams will be weighted equally at 30%. Sample exams are on reserve in the
Library. Sample exams should not be used as the primary study guide - use the outlines
& objectives. Exams are returned after grading (bring or send a stamped, addressed
envelope with 2oz postage on it). Exams are a combination of short answer and discussion
questions, problems, definitions, and multiple choice questions. Bring a Scantron form and
notebook paper for each exam.
There will also be a "mastery exam" over Interest and Present Value
Calculations. This exam will be online and consists of problems . You must demonstrate
your mastery of these topics by scoring at least 80% on this exam in order to pass the
course. If you fail to score 80% on the exam, you will be given additional opportunities
to do so.
Attendance at exams is required. An unexcused absence from an exam will result in an F for
that exam. An absence is considered excused only if you were in the hospital or had some
equally drastic reason for being absent. (Less stringent standards may be applied if
advance arrangements are made with the instructor.)
PROBLEMS, including discussion list participation will count 10% of your semester's grade.
The lowest score will be dropped in calculating your problem average.
Problems should be turned in when due. A penalty may be assessed for problems turned in
late. You will not receive any credit for a problem turned in after the solution is
posted. Your calculations or reasoning should always be clearly shown.
If you need course adaptations or accommodations, please send me an email as soon as
possible.
For TOPICS and reading assignments see the Outline below.
The PURPOSE of a basic course such as this is to give the non-
finance major a general knowledge and understanding of financial decision making and in
addition to provide the finance major with a foundation to build on in later courses. The
three major elements of this knowledge are:
1. The language of finance - this means learning definitions of terms is very important.
2. Structure and environment - this includes the economy and institutions (which we will
review somewhat), types of financial instruments, etc.
3. Tools and framework for analysis - a basic understanding of financial principles and
how financial decisions are made, especially for the business firm.
PREREQUISITES - ACC 231 or equivalaent are required as background
for this course. From having studied this course, you should be able to do at least the
following:
Identify whether a financial statement item goes on the income statement or the balance
sheet and, if on the balance sheet, what part of the balance sheet.
Construct a balance sheet and income statement, given a list of financial statement items.
Calculate a given ratio or percentage of a number and what ratio or percentage one number
is of another.
Calculate the amount of interest earned or paid on an investment or loan, given the terms
and calculate the present value of a future amount.
GENERAL OBJECTIVES (specific objectives for each part will be provided) - on completion of
the course you should be able to:
Identify the goal of financial management and tell why it is superior to other possible
goals.
Describe the functions and operations of the financial markets, the role of institutions,
expectations, and taxes and the relation of the financial markets to the economy and
financial management.
Construct and use the tools of financial analysis and forecasting, including ratios,
pro-forma financial statements, and cash budgets.
Explain the concepts of risk, return, and time value of money, including the application
of these concepts to securities, portfolios, and capital budgeting by the corporation.
Describe and calculate the value of or rate of return on the different types of securities
issued by a corporation.
Explain and calculate the cost of capital, including the component costs and the overall
cost of capital, for a firm (including its marginal cost), its relation to the firm's
capital structure, and how it interacts with the capital budgeting decision.
Describe and compare the sources of funds which a company might use to finance its
operations.
OUTLINE OF COURSE TOPICS AND ASSIGNMENTS
Topic(s) Reading Assignment
I. Introduction to course; the scope and environment of finance
A. The role of finance Chapter 1
B. Legal forms of organization pp 4-7
C. The tax environment pp 25-29
D. The economic environment review
E. Financial markets pp 18-24,229-34 except pp 43-55
II. Basic tools of finance
A. Concepts and principles Chapters 4,5
B. Financial analysis Chapter 2
C. Financial planning and control Chapter 3
III. Valuation of financial assets
A. Valuation of bonds Chapter 6
B. Valuation of stocks Chapter 7
IV. Long-term asset decision making
A. The cost of capital Chapter 10
B. Capital budgeting: ranking and selecting
projects Chapter 9
C. Capital budgeting: other aspects Chapter 8
V. Financial structure and long-term financing
A. Risk, leverage, and capital structure Chapter 11
B. Internal financing Chapter 12
C. Securities markets & selling securities pp 23,272-78
D. External sources: bonds and stocks Review Chs 6,7,&11
VI. Working Capital Management
A. Introduction & managing current assets Chapter 13
B. Short-term financing Chapter 14