GY008

Financial Fundamental
BINUS BUSINESS SCHOOL
SCU : 3 credit(s)
Pre-requisites NONE
Contact Hours : NONE
D3937 - Johan Halim, M.M. ( johan_halim@yahoo.com;
johan.halim@bankmandiri.com )
D4120 - Samuel Dossugi, Ph.D. ( dossugi@hotmail.com )
Teaching Team :
Samuel Dossugi, Ph.D.
T2 2013
Syllabus Designed by :
Course Information
Reviewed by Tatum Syarifah Adiningrum, S.IP, M.Ed (2/18/2011)
Checked by Toto Rusmanto, M.Comm., Ph.D. (6/7/2011)
Approved by Ari Barkah Djamil, SE., M.Sc (6/8/2011)
Endorsed by Dr. Stephanus Remond Waworuntu, MBA. (6/8/2011)
BINUS BUSINESS SCHOOL
Joseph Wibowo Center - BINUS UNIVERSITY
Jl.Hang Lekir I No. 6, Senayan, Jakarta 10270, Indonesia
Version : 2
Revision : 0 Effective From : 18 July 2011
FM-BINUS-AA-FPA-13/R8
Revision Date : -
1. Course Description
Financial Fundamentals deals with the maintenance and creation of economic value or wealth. It
focuses on decision making with a special attention on creating wealth. In general, there are three
groups of financial decisions: investment, financing, and dividend decisions. Investment decisions
involve allocation of scarce resources across competing uses. Financing decisions involve raising
funds to finance the investment projects. Dividend decisions involve reinvesting cash back to the
business or returning cash to shareholders. <br><br>The objective of this course is to give the
students problem solving skills in finance from the point of view of management and investors. In this
setting, some basic finance tools are important. The tools are: financial statement analysis,
mathematics of finance (present value, future value, annuity, perpetuity, etc), risk-return models, and
valuation models. In addition, potential conflicts of interests among the actors (such as managers vs
shareholders and shareholders vs bondholders) are also recognized. Sessions on derivatives are
added to reflect increasing importance of derivative and risk management in financial world,
especially during the current period of financial crisis.
2. Learning Outcomes
Each course has been designed to contribute to the attainment of Graduate Competencies. The
course intended learning outcomes (CILO) indicates what students are expected to be able to do by
the end of the course, which may cover specific technical skills and personal qualities pertaining to
the course given. The personal qualities may have been reflected in the defined course learning
outcomes or attained separately, outside the curriculum.
Upon completion of this course, students are expected to be able to:
1. Interpret and prepare financial statement and reporting using appropriate approaches2. Choose
appropriate financial analysis tools in a given business situation for decision-making processes3.
Identify and use effective applications of IT in calculating bonds, optimal portfolio selections, options
and leasing4. Apply principles of financial analysis to forecast future performance5. Prepare and
deliver effective presentations on financial topics
3. Course Structure
There are 12 sessions of this course throughout the term, each session duration is 3 hours. The
lecturer will deliver lectures as well as facilitating group discussion and case study analysis. Students
must come to class well-prepared. Readings and case assignments (if any) will be distributed before
the scheduled session and must be studied thoroughly, as class participation will be a part of the
grading process. It will also help students in understanding the concepts given during the lectures. A
group-assignment will be given, in which each group will conduct a financial analysis. Furthermore, a
take-home mid-semester examination is conducted to assess the students understanding of the
first-half of the topics, while the rest of the topics are examined in the final examination at the end of
the term.
4. Course Requirements
No specific requirement is needed in this course
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5.1 Text
5. Text And Other Resourcces
Titman, S., Keown, A.J. and Martin, J.D.. (, 2011). , Financial Management: Principles &
Applications (, 11 Ed.).New Jersey, , Prentice Hall
5.2 Other Resources
Ross, A.S., Westerfield, R.W. & Jaffe, J. (2002). Corporate Finance (- Ed.).US, McGraw
Hill
Hitchner, J. R. (2006). Financial Valuation (2 Ed.).Hoboken, NJ, Wiley
Gitman, L.J. & Joehnk, M.D. (2005). Fundamental of investing (9 Ed.).NY, Addison
Wesley
Berk, J., DeMarzo, P. & Harford, J. (2009). Fundamentals of Corporate Finance (-
Ed.).Boston, Pearson International
6. Course Outline
Topic Week Description Course Intended Learning
Outcomes
1 - Introduction to finance
- Financial markets
Chapter 1 & 2 CILO 1, CILO 2
2 - Income statements and Balance
sheet
- Cash flow statement and Taxes
Chapter 3 CILO 1, CILO 2
3 - Common size statements,
Liquidity ratios
- Capital structure ratios, Asset
management
- Efficiency ratios, Profitability
ratios, Market value ratios
Chapter 4 CILO 1, CILO 2
4 - Time line, Present value, Future
value
- Perpetuity, Amortization and
Annuity
- Assignment
Chapter 5, 6 CILO 1, CILO 2
5 - Risk and return, Portfolio theory
- Systematic and unsystematic
risk
- Risk premium and Beta
- Capital Asset Pricing Model
(CAPM)
Chapter 7, 8 CILO 1, CILO 2
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6 - Characteristics of bond and
stock
- Bond and Stock valuation
- Dividend discounted model
- Duration
- MidTerm Examination
Chapter 9, 10 CILO 1, CILO 2
7 - Capital budgeting criteria: NPV,
IRR, PI, Payback Period
- Analyzing project cash flows
- Assignment
Chapter 11, 12 CILO 1, CILO 3, CILO 4
8 - Cost of debt, Cost of preferred
stock
- Cost of common stock, WACC
- Capital structure theory, Cash
dividend, Stock dividend, Stock split
Chapter 14, 15 CILO 1, CILO 3
9 - Measuring liquidity
- Risk-return tradeoff, Working
capital policy
- Cash conversion cycle
- Managing current liabilities
- Managing current assets
Chapter 18 CILO 1, CILO 3, CILO 4
10 - Foreign exchange rates
- Interest rate parity, PPP
- The law of one price
- International Fisher effect
Chapter 19 CILO 1, CILO 3, CILO 4
11 - Managing risk with forward
contract, futures contracts, and
swap contracts
Chapter 20 CILO 1, CILO 3
12 Project Assignment Presentation CILO 1, CILO 2, CILO 3,
CILO 4, CILO 5
7.1 Component
7. Assesment
Components NO
Percentage CILO
Class Participation 10% 1 CILO 1, CILO 2
Final Exam 35% 2 CILO 1, CILO 4
Group Term Project 25% 3 CILO 1, CILO 2, CILO 3, CILO 4,
CILO 5
MidTerm Exam 30% 4 CILO 1, CILO 2
7.2 Class Policies
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7.3 Submission And Collection Of Assignment
1. Assessment Task 1: Class Participation
During classes, lecturers will use lectures, problems or mini-case exercises and discussions to
deliver the materials. Lecturers will also apply a student-based learning by stimulating
questions to students. Therefore, students are expected to read the assigned chapters before
the class so to be able to participate in the discussion. Students are highly encouraged to
actively participate in class discussions as participation is part of grading.
2. Assessment Task 2: Group Project Assignments and Presentation
Each student will choose a public company, each group should choose a different company,
and perform the following:
I. Financial statements analysis of at least the latest five years periods,
II. Financial projection of 1 year based on point (i) above,
III. Short descriptive sector analysis about the sector industry and the company.
For example, Astra Internationals financial analysis includes automotive sector analysis.
Financial statement analysis must include, but not limited to, financial ratio analysis and
calculation of the firms cost of capital. Financial projection includes pro-forma financial
statements analysis. Each student will make a presentation on Session 12.
3. Assessment Task 3: Midterm Exam
Midterm exam will be a take-home exam, and to be submitted in one week.
4. Assessment Task 4: Final Exam
Final exam will be a sit-in exam, and cover all materials after mid.
Note: To successfully pass this course, the students must achieve a minimum score of C.
However, please note that students have to maintain a minimum overall GPA of 3.0 to fulfill
graduation requirements. The Grade Band Criteria are defined as follows.
7.4 Assessment Description
Grade Label Weight Score Grade Description BBS
A 4 90 - 100 Student has completed all requirements of the
course work outstandingly and exceptional
additional work at the highest standard.
A- 3.7 80 - 89 Student has completed all requirements of the
course work and significant additional work to a
high quality.
B+ 3.3 70 - 79 Student has completed all requirements of the
course work and considerable additional work at a
good standard.
B 3 65 - 69 Student has completed all requirements of the
course work and considerable additional work at an
average standard.
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B- 2.67 60 - 64 Student is unable to demonstrate the completion of
the minimum requirements of the course work and
the attainment of a minimum level of knowledge/
understanding/competencies/skills required to meet
the specified learning outcomes.
C+ 2.33 55 - 59 Student has completed all requirements of the
course work and demonstrated a satisfactory level
of knowledge/ understanding/ competencies/skills
as specified in the learning outcomes.
C 2 50 - 54 Student has completed the minimum requirements
of the course work and demonstrated a minimum
level of knowledge/
understanding/competencies/skills required to meet
the specified learning outcomes.
D 1 0 - 49 Student is unable to demonstrate the completion of
the minimum requirements of the course work and
the attainment of a minimum level of knowledge/
understanding/competencies/skills required to meet
the specified learning outcomes.
8. General Information
Students are required to be familiar with the BINUS UNIVERSITY Code of Conduct, and to abide
by its terms and conditions.
8.1 Copying of Copyright Material By Student
8.2 Academic Misconduct
Please refer to the Code of Conduct for definitions and penalties for Academic Misconduct ,
plagiarism, collusion, and other specific acts of academic dishonesty.
Academic honesty is crucial to a student's credibility and self-esteem, and ultimately reflects the
values and morals of the University as a whole. A student may work together with one or a
group of students discussing assignment content, identifying relevant references, and debating
issues relevant to the subject. Academic investigation is not limited to the views and opinions of
one individual, but is built by forming opinion based on past and present work in the field. It is
legitimate and appropriate to synthesize the work of others, provided that such work is clearly
and accurately referenced.
Plagiarism occurs when the work (including such things as text, figures, ideas, or conceptual
structure, whether verbatim or not) created by another person or persons is used and presented
as ones own creation, unless the source of each quotation or piece of borrowed material is
acknowledged with an appropriate citation. Encouraging or assisting another person to commit
plagiarism is a form of improper collusion and may attract the same penalties.
To prevent Academic Misconduct occurring, students are expected to familiarize themselves
with the University policy, the Subject Outline statements, and specific assignment guidelines.
Students should also seek advice from Subject Leaders on acceptable academic conduct.
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BINUS BUSINESS SCHOOL
Version : 2
Revision : 0 Effective From : 18 July 2011
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8.2.1 Guidelines To Avoid Plagiarism
8.2.2 Referencing For Written Work
8.2.3 Referencing Standards
APA style referencing.
Research and Development Division
Reviewed by
Head of Development
Tatum Syarifah Adiningrum, S.IP, M.Ed
School of Accounting & Finance
Checked by,
Head of Program
Toto Rusmanto, M.Comm., Ph.D.
School of Accounting & Finance
Approved by,
Head of School
Ari Barkah Djamil, SE., M.Sc
Endorsed by,
Dean, Faculty of Business
Dr. Stephanus Remond Waworuntu, MBA.
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