FIN 201: Introduction to Business Finance

School of Business Studies, IBA Karachi

Program: BBA/BSAF
Department Offering: Finance
Class ERP Number:
Faculty: Tahira Jaffery

Class details

Class Timing and Mon/Wed – 8:30 am & 1:00 pm

Room Tues/Thursday – 8:30 am & 10:00 pm

Session Days Monday/Wednesday and Tuesday/Thursday

Credit Hours: 3 Credit Hours

Email tmariam@iba.edu.pk

Contact # 021 38104701 Extension:

Course Description

The course is designed for the undergraduate business students who have not yet been
exposed to the basic concepts of finance. This first course course aims at introducing the
students to the important, interesting and challenging field of Finance. The course focuses
on the fundamental principles of finance and familiarizes the students with the various
concepts of finance, along with its importance and use in our financial decisions. The course
is structured in a manner that it starts from the very basics and then leaves the students at
a level where they will be able to pursue more advanced finance courses. Moreover, as a
consequence of this course, I expect to increase the students’ confidence to work with
financial information.

BBA/BSAF Program Learning Competencies (PLCs)

PLC 1. Effective Communication Skills

The students will become effective speakers, listeners, writers and team members

PLC 2. Knowledge of Core Business Disciplines

Students will gain a broadbased multidisciplinary exposure

PLC 3. Critical Thinking Skills

Students will develop the ability to classify, analyse, and evaluate the available data using
appropriate techniques for effective decision making.

PLC 4. Ethics
Students will have an awareness and understanding of ethical issues

PLC 5. Glocal Mindset

Students will develop a focus on global connectionswith local contexts through awareness of
diversity across cultures and markets.

IBF Course Learning Outcomes (CLOs)

1. Students will understand the terminology and basic concepts underlying business financial
and the local and global financial environment in which business decisions are made.
(PLO 201) & (PLO 402) (PLO 502)
2. Be able to understand financial statements, work with data available and evaluate through ratios
the financial postion and performance of the company. (PLO 202) & (PLO 301)
3. Students should be able to understand basic financial principles
(TVM, BOND VALUATION, Financial performance valuation, stock valuation etc.) PLO 201
4. Students will be able to understand the conceptual relationship between the expected return
and the relevant risk of individual assets and portfolios of assets. (PLO 201)
5. Students will be able to estimate the effect of growth on the need for external financing. (
PLO 201)
6. Students will be able to understand the factors determining interest rates and the theories
explaining the yield curve. (PLO 201)

Skills/Abilities
The course will inculcate skills on team working, reading through financial statements, doing
analysis based on ratios.

AOL Assessment Mapping

PLC mapped: The course is mapped with BBA/BSAF Program Learning Competency PLC 2 and Program
learning objective PLO 201.
Assessment Tool: A section of Final Examination

Teaching and Learning Methodology

1. Students are required to read the topic prior to the lecture. During lecture, we will discuss
the topic and solve selected examples or questions.
2. Market data and information will regularly be seeked in order to add richness to the course.
 Course Learning Outcomes mapped to Program Learning Competencies

Effective Knowledge of Critical

Glocal
Communication Core Business Thinking Ethics
Mindset
Program Learning Skills Areas Skills PLC 4
PLC 5
Competencies PLC 1 PLC 2 PLC 3

Course
Learning
Outcomes

1 PLO 201 PLO 402 PLO 502

2 PLO 202 PLO301

3 PLO201 PLO 302

4 PLO 201

5 PLO 201 PLO 301

PLO 501
6 PLO 201
PLO 502

Mapping to Course
Reading Session Topic
Learning Outcomes

 Introduction and discussion of the course outline

Chapter 1: An  Discussion of basic concepts of finance, terminologies etc
Overview of  What is business finance?
Financial  Importance of financial decisions
CLO 1
Management  Alternate forms of business organization
 Goals of financial management
Handout: Ethics  Agency Problem
 Ethics

 Capital allocation process

Chapter 2:  Financial Markets
Financial Markets CLO1  Financial Institutions
and Institutions  (Banking and NonBanking Financial Institutions)
 SRI (Socially responsible Investments)

 Review of financial statements

Chapter 4:  Liquidity, Solvency, Asset Management,
Analysis of CLO2 Profitability and Market Value Ratios
Financial  Du Pont Analysis
Statements  Benchmarking: time trend and peer group analysis
– Project based

Chapter 3-m
 Corporate Taxes
section 3-9B
Chapter 17:
 Sales forecast Method
Financial
CLO5  AFN Equation
Planning and
 Forecasted Financial Statements
Forecasting

Chapter 17:
 Breakeven Analysis;
Financial
 Operating and Financial Leverage Analysis,
Leverage and CLO2
Breakeven measures and significance
Analysis

 Time Lines
 Future Value
Chapter 5: Time  Present Value
CLO3
Value of Money  Discounted cash Flows
 Annuities
 Amortization Tables

 The cost of money (interest rates)

Chapter 6:  Determinants of market interest rates
CLO6
Interest rates  Term structure of interest rates (yield curve)

 Types and features of debt

 Valuation of bonds
Chapter 7: Bonds  Bond Pricing
and their CLO3  Yeild calculation
Valuation  Yeild to Call

 Calculating historical and expected return and risk

Chapter 8: Risk  Risk Diversification for Portfolios
and Rates of CLO4  Relationship between risk and return: CAPM
Return
Spreadsheet Exercise: Beta Calculation

 Types and features of stocks

 Overview of stock valuation models, ; No growth,
Chapter 9: Stocks
constant and non-constant growth Stocks;
and their CLO3
Valuation
Dividend and Capital Gains Yields
 Dividend discount model

 Overview of Working Capital Management

Chapter 16:
 Cash Budget
Working Capital
 Receivables Management – Evaluating Credit
Management
Policy Change

Text Book and Pre-Course Reading Material, Important Dates.

Recommended Text :
Fundamentals of Financial Management. Eugene F. Brigham & Joel H. Houston. 15th Edition.

Secondary Texts :
Fundamentals of Corporate Finance. Stephen A. Ross, Randolph W. Westerfield & Bradford D.
Jordan, 9th edition.

Prerequisite Skills and Knowledge to take this Course

Since it is the introductory finance course, there is no pre-requisite for the course. Students needing
help can come for counseling on Monday or Wednesday (10:00 am - 11:00 am.) in Room 103, Aman
CED Building.

Assessments and Grading Scheme

Assessment Due Date Remarks

Ongoing (end of a Would consist of end of chapter questions/

Home Assignments topic/as announced in any other topic deemed fit by the instructor
class)
As announced in class Practice Questions/any topic deemed fit by
Class Assignments
instructor
Ongoing The quizzes may be in advance or from the
Quizzes
previous topic. There will be a perfect zero
if you miss the quiz.
Mid Term Exams Exam Weeks
This course follows absolute grading.

Marks Distribution

Marks Total Marks

Marks Head Total Frequency Total Exempted
/Frequency /Head

Home Assignments X 0 10/x 10

Quizzes Y 2 5/y 5

Project 1 1 0 25

Mid-term 1 0 25 25

Final Examination 1 30 35

Total Marks 100

 Comments and/or Suggestions

• Active class participation will be rewarded by adjusting the grade upwards when it is on the
margin.
• Since subsequent topics build on previously learned material, it is imperative that students
keep up with the material. In addition, you should ensure that lectures are understood
properly.
• A student who misses a class is responsible for obtaining any handouts and information on
course content, assignments, due dates, test dates, etc.
• Unethical behavior (cheating, plagiarism, proxy attendance) will be strictly penalized.

Technology & Innovation

• All course materials will be posted on LMS and grades will be posted on ERP. Students are
responsible to stay updated on these platforms. For discussions and course related queries,
please join the course fb group.

Experiential Learning Exposure(s)

Students will do two group projects as part of the course. The projects would involve calculating ratios and
doing a financial analysis for firms listed on Pakistan Stock Exchange.

Social Contribution / Impact

Environmental, Social and Governance (ESG) factors will be introduced and their implication will discussed
where applicable throughout the course.

Academic Conduct

IBA policy

Attendance Policy

IBA policy

Plagiarism Policy

IBA policy

Withdrawal Policy

IBA policy