COURSE OUTLINE SCHOOL: DEPARTMENT: School of Business Accounting PROGRAM: COURSE TITLE: Corporate Finance 1 COURSE CODE: ACCT224 TOTAL COURSE HOURS: 60 PRE-REQUISITES/CO- REQUISITES: COURSE ELIGIBILITY FOR PRIOR LEARNING ASSESSMENT AND RECOGNITION (PLAR): ACCT112 and COMP121 Yes ORIGINATED BY: Brian Gordon REVISED BY: Basil Chen DATE: August, 2008 APPOVED BY: Chair/Dean Students should keep all course outlines for each course taken at Centennial College. These may be used to apply for transfer of credit to other educational institutions. A fee may be charged for additional or replacement copies.
COURSE DESCRIPTION: Description: This is an introductory course in financial management. The student studies topics in the financial management of profit-seeking organizations. A major objective is the development of analytical and decision-making skills in finance through the use of theory questions and practical problems. Many of the problems/assignments will require the application of an electronic spreadsheet program such as Excel. Primary target audience: Students pursuing a diploma or certificate in business specializing in accounting and finance and students pursuing credit standing in the Certified General Accountants' (CGA) program. Recognition: The CGA recognizes the course content of ACCT224 - Corporate Finance 1 and ACCT334 - Corporate Finance 2 in total as equivalent to their course Finance 1. A grade of B or better is required in each of the Centennial College courses to obtain the transfer credit. Topics: Topics include: Goals and functions of financial management; financial statements analysis; financial forecasting; working capital management; time value of money and capital budgeting decisions. Further study: A subsequent course covering more advanced topics is available: ACCT334 - Corporate Finance 2. COURSE LEARNING OUTCOMES: Upon successful completion of this course, the student will have demonstrated the ability to: 1. Explain the goals and functions of financial management. 2. Analyze financial statements and describe the economic health of a company. 3. Explain the benefits of financial forecasting and prepare proforma financial statements. 4. Decide the form and amount of short term financing that best suits a given corporate need, based on historical and projected analysis. 5. Recommend techniques for managing working capital effectively. 6. Apply the concept of time value of money in making capital budgeting decisions. 7. Use an electronic worksheet such as EXCEL to solve homework problems and present information. ESSENTIAL EMPLOYABILITY SKILLS (EES); This course supports the students ability to: 1. Apply a wide variety of mathematical techniques with the degree of accuracy required to solve problems and make decisions (This is achieved through solving the problems assigned throughout the course). 2. Use a variety of computer software and other technological tools appropriate and necessary to the performance of tasks, and Collect, analyze and organize relevant and necessary information from a variety of sources. Issued & Revised by COLT: June 2007 THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) - 2 -
(Accomplished through: use of an electronic spreadsheet program such as Excel; use the Internet to conduct research; use Blackboard to access course material and do assigned problems) 3. Evaluate her or his own thinking throughout the steps and processes used in problem solving and decision making (Accomplished by requiring students to attach to each major problem solved, the rationale for procedures used and conclusions drawn) 4. Manage the use of time and other resources to attain personal and/or project related goals (Achieved by time limited assignments and quizzes) 6. Take responsibility for his or her own actions and decisions (To be applied to all performance aspects the course, including punctuality, preparation for class, respecting deadlines, etc) PRIOR LEARNING ASSESSMENT & RECOGNITION PROCESS (ES): This course is available for PLA challenge. The challenge process is as follows: (a) An interview (b) A comprehensive final exam. EVALUATION & GRADING SYSTEM: Two criteria are used to determine whether a student has achieved a passing grade in this course: (a) An overall 50% success rate based on the grading scheme below AND (b) A 50% success rate in the test/exam component of the course (marked ***) Grading Scheme Assignments* 15% Lyryx Lab** 10% Mid Term Test*** 30% Final Exam (Comprehensive)*** 45% 100% *Consists of two (2) comprehensive assignments to be completed utilizing Excel **Consists of seven (7) Lyryx labs STUDENT ACCOMMODATION: All students have the right to study in an environment that is free from discrimination and/or harassment. It is College policy to provide accommodation based on grounds defined in the Ontario Human Rights Code. Accommodation may include changes or modifications to standard practices. Students with disabilities who require academic accommodations must register with the Centre for Student with Disabilities. Please see the Centre for Students with Disabilities for details. Issued & Revised by COLT: June 2007 THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) - 3 -
Students requiring accommodation based on human rights grounds should talk with their professors as early as possible. Details are available on the Centennial College website (www.centennialcollege.ca ) If students are unable to write an examination due to a medical problem or unforeseen family problems, they should immediately contact their professor or program Chair for advice. In exceptional and well-documented circumstances (e.g. unexpected family problems, serious illness, or death of a close family member), students should be able to write a make-up examination to replace an examination missed. TEXT AND OTHER INSTRUCTIONAL/LEARNING MATERIALS: Foundations of Financial Management 7th Canadian Edition, Block, Hirt, Short. Publisher: McGraw- Hill Ryerson Text + Lyryx for Finance ISBN 0070782539 Lyrx for Finance (Standalone) ISBN 0070980551 References: Study Guide and Workbook for Use with Foundations of Financial Management. Fifth Canadian Edition, Publisher: McGraw-Hill Ryerson USE OF DICTIONARIES: Students may use a paper English/Foreign language dictionary. Students may not use electronic dictionaries, word or phrase translators or PDAs of any kind during tests and examinations. Probationary Policy Please contact your academic department for details. Issued & Revised by COLT: June 2007 THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) - 4 -
POLICY STATEMENTS College Policies The following statements are selected from Centennial College policies approved by the Board of Governors. Student Responsibilities Students are expected to know the contents of the course outline and to discuss with the professor any areas where clarification is required. Students should keep all course outlines for each course taken at Centennial College. These may be used to apply for transfer of credit to other educational institutions. A fee may be charged for additional or replacement copies. Other Policies Students should familiarize themselves with all College Policies that cover students rights, responsibilities, and the Academic Appeal process. For further information, consult the Academic Matters Section in the full-time and continuing education calendars. The Academic Appeal Application form is available from any Enrolment Services (Registrar) Office. Proof of Student Status Students are obliged to produce official photo identification at any time during the semester when requested to do so by any professor. (The official piece is the Centennial Student Card.) Continuing Education students do not have Centennial Student Cards, and so they may use other forms of photo identification, such as a driver s license, health card, or other government-issued photo identification. Final Examinations When writing a test or examination, students must put their official photo-id cards in full view, for review by the invigilator. Students who do not have official photo-id will be permitted to write the examination with a substitute photo-id, but they will be required to produce photo-id at the program or department office within 24 hours or the next business day following the examination, or else the examination results will be void. Faculty Consultation Professors are available to see students outside of class time. Students can contact professors via voice mail, email, or through their program or department office. Information regarding how to contact teachers will be provided at the beginning of the course and is also available in the program or department office. Human Rights Statement It is the policy of the College that all programs will strive for a learning, teaching, and working environment that promotes inclusion, understanding and respect for all students and employees, consistent with the Ontario Human Rights Code and the Centennial College's Statement of Diversity. Issued & Revised by COLT: June 2007 THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) - 5 -
Course Title: Corporate Finance 1 Centennial College Course Code: ACCT 224 WEEK TOPIC/CONTENT READINGS LEARNING OUTCOMES INSTRUCTIONAL STRATEGIES USED 1A The Goals and Functions of Financial Management. Internet Chapter 1 1. Identify how finance builds on accounting and economics 2. Explain the role of interest rates as a key factor in financial management 3. Outline the activities of financial managers. 4. Identify some domestic and international conditions that influence work of financial managers.. For the entire duration of the course Lyryx will be utilized to enhance learning. Questions: 2,3,4,8,10,12,13,15 COURSE EVALUATION S (TESTS & ASSIGNMENT S USED) 1,3,4 1B/2A Review of Accounting: Income Statement, Balance Sheet and Cash Flow Statement. Chapter 2 1. Review and reinforce accounting concepts of particular relevance to this course. 2. Emphasize the importance of cash flow in finance. 3. Introduce the concept of free cash flow.. Questions: 2,3,4,6,7,8,9,10 2,8,11,13,21,35 Utilize Excel to solve problems 11,13 2B/3/4A Financial Analysis Chapter 3 1. Evaluate the firm s performance using financial ratios. 2. Calculate all 13 financial ratios and analyze the financial health of the company within the Questions: 1,3,7,8,9,10 Lab #1 (Lyryx) Due: Week-2B Issued & Revised by COLT: June 2007 THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) - 6 -
WEEK TOPIC/CONTENT READINGS LEARNING OUTCOMES INSTRUCTIONAL STRATEGIES USED 2B/3/4A Financial Analysis Chapter 3 categories of profitability, asset utilization, liquidity, and debt utilization. 3. Assess profitability using the Dupont system of analysis. 4. Use trend analysis to assess performance. 5. Identify different accounting treatments that could distort reported income and produce misleading ratios. 1,5,10,13,17,25,27,32 Utilize Excel to solve problems 1, 17, 25. COURSE EVALUATION S (TESTS & ASSIGNMENT S USED) Lab #2 (Lyryx) Due: Week-4A 4B/5/6A Financial Forecasting Chapter 4. 1. Explain the benefits of forecasting to the future health of a business. 2. Perform the percentage of sales method of forecasting. 3. Determine if additional funds are required to finance sales growth. 4. Prepare a cash budget in spreadsheet format suitable for submission to a professional user Questions: 1,2,3,4,6 1,4,8,10,14,18,20,22,25 Utilize Excel to solve problems 20,22,25. Excel Assignment #1 Due: Week -5B Lab #3 (Lyryx) Due: Week-6A 6B MID-TERM TEST MID-TERM TEST 7/8A Working Capital and the financing decision Chapter 6 Lab #4 (Lyryx) Due: Week-8A 1. Define working capital 2. Describe the nature of asset growth and identify assets that are more permanent in nature 3. Explain the financing of assets in terms of hedging 4. Explain the term structure of interest rates and the theories that suggest its shape Questions: 1-5,7,8,9,11,12 1,5,11,12,16,19,21 Issued & Revised by COLT: June 2007 THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) - 7 -
WEEK TOPIC/CONTENT READINGS LEARNING OUTCOMES INSTRUCTIONAL STRATEGIES USED 5. Identify the role of risk and profitability in determining the financing plan for current assets. COURSE EVALUATION S (TESTS & ASSIGNMENT S USED) 8B/9 Current Asset Management Chapter 7 1. Define accounts receivable, inventory etc. as investments in current assets. 2. Discuss cash management as the control of receipts and disbursements to minimize non earning cash balances 3. Describe techniques to make cash management more efficient 4. Calculate the yield on various marketable securities 5. Outline the credit criteria - the 4Cs of credit 6. Evaluate the cost/benefits of a proposal to alter credit standards 7. Apply techniques to reduce investment in inventory 8. Explain why liquidity and profitability have an inverse relationship Questions: 1-4,6,8,10,12,14,16 1,5,9-14,17,20,21,22,29,34 Lab #5 (Lyryx) Due: Week-9B 10/11A Sources of Short Term Financing Chapter 8 1. Describe trade credit as an important form of short term financing 2. Calculate cost of trade credit 3. Describe salient features of short term bank loans 4. Calculate cost of short term bank loans 5. Describe commercial paper 6. Describe borrowing in foreign markets as a cost Questions: 1-11 1,6,8,10,12,13,16,18,21, 22,29 Lab #6 (Lyryx) Due: Week- 11A Issued & Revised by COLT: June 2007 THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) - 8 -
WEEK TOPIC/CONTENT READINGS LEARNING OUTCOMES INSTRUCTIONAL STRATEGIES USED 10/11A Sources of Short Term Financing Chapter 8 effective alternative for firms 7. Demonstrate interest rate hedging to reduce borrowing risk COURSE EVALUATION S (TESTS & ASSIGNMENT S USED) 11B/12A The Time Value of Money Chapter 9 Review the time value of money: 1. Compute future value of single sum 2. Compute present value of single sum 3. Compute future value of an annuity 4. Compute present value of an annuity 1,2,3,11,13,38, 12B/13/14A The Capital Budgeting Decision Chapter 12 1. Define capital budgeting decisions as a longterm investment decisions 2. Explain and emphasize that cash flows rather than accounting earnings are evaluated in capital budgeting decision 3. Discuss the use of the cost of capital as discount rate in capital budgeting analysis 4. Evaluate investments by: a. Average accounting return b. Payback period c. Internal rate of return (IRR) d. Net present value (NPV) e. Profitability index Perform NPV analysis to assist in the decisionmaking concern of long-run investments Questions: 1-12 1,2,3,8,9,13,18,25,38 Lab #7 (Lyryx) Due: Week- 13B Excel Assignment #2 Due: Week- 13B Issued & Revised by COLT: June 2007 THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) - 9 -
WEEK TOPIC/CONTENT READINGS LEARNING OUTCOMES INSTRUCTIONAL STRATEGIES USED 14B Review COURSE EVALUATION S (TESTS & ASSIGNMENT S USED) 15 EXAM WEEK Final Exam FINAL EXAM Issued & Revised by COLT: June 2007 THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) - 10 -