ISTANBUL OKAN UNIVERSITY INFORMATION PACKAGE / COURSE CATALOGUE
| Business Administration (English) | |||||
| Bachelor | TR-NQF-HE: Level 6 | QF-EHEA: First Cycle | EQF-LLL: Level 6 | ||
General course introduction information
| Course Code: | FNCE301 | ||||||||
| Course Name: | Business Finance | ||||||||
| Course Semester: | Fall | ||||||||
| Course Credits: |
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| Language of instruction: | EN | ||||||||
| Course Requisites: | |||||||||
| Does the Course Require Work Experience?: | No | ||||||||
| Type of course: | Compulsory | ||||||||
| Course Level: |
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| Mode of Delivery: | Face to face | ||||||||
| Course Coordinator : | Prof. Dr. GÖKÇE TUNÇ | ||||||||
| Course Lecturer(s): |
Prof. Dr. GÖKÇE TUNÇ |
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| Course Assistants: |
Course Objective and Content
| Course Objectives: | The primary objective of this course is to provide students with the tools to understand and solve the basic financial problems confronting business today. Therefore, fundamentals of finance, financial statements analysis, time value of money concepts are taught to develop the theoretical background for students. The successful completion of this course should provide the student with the basic skills that should be used in analyzing alternative business investments. Furthermore the course aims to equip the students in applying the theory of corporate finance in corporate financial decision-makings. |
| Course Content: | The Role of Managerial Finance and The Financial Market Environment Financial Statements and Ratio Analysis Cash Flow and Financial Planning Time Value of Money Interest Rates and Bond Valuation |
Learning Outcomes
The students who have succeeded in this course;
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Lesson Plan
| Week | Subject | Related Preparation |
| 1) | • Describe the course. • Explain the basic types of financial management decisions and the role of the financial manager. • Explain the goal of financial management. • Recognize the financial implications of the different forms of business organization. • Define value creation as the most fundamental aspect of management and describes agency issues that can arise. • Recognize real-world issues concerning conflict of interest and current controversies surrounding ethical conduct and management pay. • Up-to-date discussion of Sarbanes-Oxley and its implications and impact. • Examine the choice of organization form for a small business. | Review the Syllabus. |
| 2) | • Define the balance sheet and income statement. • Define cash flow and spells out the differences between cash flow and earnings. • Recognize the relevance of market values over book values. • Explain the variation in corporate tax rates across industries in practice. • Identify the key cash flow concepts in a small business setting. • Explain Balance sheet and Income Statement. | Read in Principles of Managerial Finance, by Lawrence J. Gitman and Chad J. Zutter (Pearson – Sixteenth Edition) Chapter 1-2. Review the Lecture Notes. |
| 3) | • Recognize Cash Flows and Financial Statements • Identify the sources and uses of cash. • Recognize the statement of cash flows. • Explain Standardized Financial Statements • Identify the evaluation of financial statements: Ratio Analysis • Identify Sources vs Uses of Cash • Recognize Common-size financial statements. • Discuss Short-Term Solvency, or Liquidity, Measures • Discuss Long-Term Solvency Measures • Discuss Asset Management, or Turnover, Measures • Discuss Profitability Measures | Read in Principles of Managerial Finance, by Lawrence J. Gitman and Chad J. Zutter (Pearson – Sixteenth Edition) Chapter 1-2. Review the Lecture Notes. |
| 4) | • Define enterprise value (EV) and discusses the widely used EV–EBITDA ratio. • Explain the basic DuPont equation to better explore the interrelation ships between operating and financial performance. • Analyze how to get and use real-world data thereby applying key chapter ideas. • Explain how to evaluate financial statements. • Illustrate the use of ratios and some pitfalls in a small business context. • Recognize Market Value Measures • Discuss Expanded DuPont analysis. • Justify Expanded DuPont analysis using data from S&P Market Insight. • Discuss The enterprise value–EBITDA ratio. • Minicase: Ratio Analysis at S&S Air, Inc. | Read in Principles of Managerial Finance, by Lawrence J. Gitman and Chad J. Zutter (Pearson – Sixteenth Edition) Chapter 3. Review the Lecture Notes. |
| 5) | • Define the percentage of sales approach to creating pro forma statements. • Discuss the importance of financial plan and capacity utilization for a small business. • Recognize a vehicle for examining the interrelationships between operations, financing, and growth. • Explanation of growth rate formulas clears up a common misunderstanding about these formulas and the circumstances under which alternative formulas are correct. • Illustrate the importance of financial planning in a small firm. • Recognize the percentage of sales method. • Compute the external financing needed to fund a firm’s growth. • Analyze the determinants of a firm’s growth. • Analyze some of the problems in planning for growth. • Justify the expanded discussion of sustainable growth calculations. • Discuss the alternative formulas for sustainable and internal growth rates. | Read in Principles of Managerial Finance, by Lawrence J. Gitman and Chad J. Zutter (Pearson – Sixteenth Edition) Chapter 3. Review the Lecture Notes. |
| 6) | • Determine the future value of an investment made of an investment made today. • Determine the present value of cash to be received at a future date. • Analyse the relationship between present value and future value. • Find the return on an investment. • Compute how long it takes for an investment to reach a desired value. | Read in Principles of Managerial Finance, by Lawrence J. Gitman and Chad J. Zutter (Pearson – Sixteenth Edition) Chapter 4. Review the Lecture Notes. |
| 7) | • How to determine the future and present value of investments with multiple cash flows. • Calculate Effective Annual Rate (EAR) and Annual Percentage Rate (APR). • Define loan types and loan amortization • Find the interest rate on a loan. • Recognize how loans are amortized or paid off. • Recognize how interest rates are quoted (and misquoted). | Read in Principles of Managerial Finance, by Lawrence J. Gitman and Chad J. Zutter (Pearson – Sixteenth Edition) Chapter 4. Review the Lecture Notes. |
| 8) | • Midterm Exam • Discuss the Midterm Exam. • Explaining the specifics of the Midterm Exam. | Review the Lecture Notes. |
| 9) | • Explain bond features and prices. • Explain bond values and yields and analyze why they fluctuate. • Recognize interest rate risk. • Find yield to maturity of a bond. • Explain bond ratings and what they mean. | Review the Lecture Notes. |
| 9) | • Explain bond features and prices. • Explain bond values and yields and analyze why they fluctuate. • Recognize interest rate risk. • Find yield to maturity of a bond. • Explain bond ratings and what they mean. | Review the Lecture Notes. |
| 10) | • Define important types of bonds. • Discuss the issues that come up in selling bonds to the public. • Recognize the impact of inflation on interest rates. • Compute the term structure of interest rates and analyze the determinants of bond yields. • Discuss real versus nominal rates and the determinants of the term structure. • Explan the pricing of bonds between coupon payment dates and also bond market quoting conventions. • Discuss a relatively new type of call provision that has become very common. | Read in Principles of Managerial Finance, by Lawrence J. Gitman and Chad J. Zutter (Pearson – Sixteenth Edition) Chapter 5. Review the Lecture Notes. |
| 11) | • Analyze the constant and non-constant growth models. • Differentiate types of stocks. • Discuss the major stock market operations. • Evaluate PE and price/sales ratios for equity valuation. • Illustrate the difficulties and issues surrounding small business valuation. | Read in Principles of Managerial Finance, by Lawrence J. Gitman and Chad J. Zutter (Pearson – Sixteenth Edition) Chapter 5. Review the Lecture Notes. |
| 12) | • Discuss the capital budgeting. • Define the net present value (NPV) criterion. • Recognize the specifics of NPV criterion. • Explain the payback rule and some of its shortcomings. • Discuss the discounted payback rule and some of its shortcomings. • Evaluate the accounting rates of return and some of the problems with them. | Read in Principles of Managerial Finance, by Lawrence J. Gitman and Chad J. Zutter (Pearson – Sixteenth Edition) Chapter 6. Review the Lecture Notes. |
| 13) | • Define Internal Rate of Return (IRR) criterion. • Recognize the specifics of IRR criterion. • Define Modified-Internal Rate of Return (MIRR) criterion. • Recognize the specifics of MIRR criterion. • Explain the Profitability Index criterion. • Identify the reasons why the NPV criterion is the best way to evaluate proposed investments. | Read in Principles of Managerial Finance, by Lawrence J. Gitman and Chad J. Zutter (Pearson – Sixteenth Edition) Chapter 6. Review the Lecture Notes. |
| 14) | • Review: Identify the sources and uses of cash. • Review: Explain the basic DuPont equation to better explore the interrelation ships between operating and financial performance. • Review: Explain bond values and yields and analyze why they fluctuate. • Review: Recognize interest rate risk. • Analyze the constant and non-constant growth models. • Recognize the specifics of NPV criterion. • Recognize the specifics of IRR criterion. • Recognize the specifics of MIRR criterion. | Review the Lecture Notes. |
| 15) | • Evaluate students via final exam. • Assess the student’s performance throughout the semester. • Analyze the final exam results in terms of further amelioration of the course. | Review the course topics. |
Sources
| Course Notes / Textbooks: | Principles of Managerial Finance, by Lawrence J. Gitman and Chad J. Zutter (published by Pearson – Sixteenth Edition). REFERENCE BOOKS AND JOURNALS: RELATED WEB PAGES: Business Week www.businessweek.com Fortune www.fortune.com Forbes www.forbes.com Financial Times www.ft.com, www.usa.ft.com Wall Street Journal www.wsj.com |
| References: | Principles of Managerial Finance, by Lawrence J. Gitman and Chad J. Zutter (published by Pearson – Sixteenth Edition). REFERENCE BOOKS AND JOURNALS: RELATED WEB PAGES: Business Week www.businessweek.com Fortune www.fortune.com Forbes www.forbes.com Financial Times www.ft.com, www.usa.ft.com Wall Street Journal www.wsj.com |
Course-Program Learning Outcome Relationship
| Learning Outcomes | 3 |
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|---|---|---|---|---|---|---|---|---|---|
| Program Outcomes | |||||||||
| 1) Explain the essential body of knowledge in the area of business administration, including evolution of the discipline, the state-of-the-art concepts, scientific methodology, theories and models | |||||||||
| 2) Employ the appropriate tools and analytical techniques to collect and analyze quantitative and qualitative data in the related areas, interpret results and propose solutions | |||||||||
| 3) Recognize the importance of technological development, especially in information technologies, and utilize them in business administration | |||||||||
| 4) Evaluate the body of knowledge in the dynamic business world and business functional areas to asses needs, manage and lead change by using critical and innovative thinking | |||||||||
| 5) Discover and create entrepreneurial opportunities and expertise to successfully establish and develop their own ventures | |||||||||
| 6) Fulfill their responsibility in teamwork and projects in businesses, and act as a leader | |||||||||
| 7) Communicate in written and oral English with people from diverse backgrounds, and have the English proficiency to follow and interpret the global dynamics in the areas of business administration | |||||||||
| 8) Recognize individual and multi-cultural diversity, and can emphatically interact with individuals from diverse cultural backgrounds in social and professional settings | |||||||||
| 9) Identify standards of personal, professional, social and business ethics, evaluate the ethical implications of various practices in the related areas, and be aware the importance of ethical behavior in adding value to the society | |||||||||
| 10) Recognize interrelationship among business and other disciplines, and relate knowledge from diverse areas to formulate novel solutions in the area of business administration | |||||||||
Course - Learning Outcome Relationship
| No Effect | 1 Lowest | 2 Low | 3 Average | 4 High | 5 Highest |
| Program Outcomes | Level of Contribution | |
| 1) | Explain the essential body of knowledge in the area of business administration, including evolution of the discipline, the state-of-the-art concepts, scientific methodology, theories and models | |
| 2) | Employ the appropriate tools and analytical techniques to collect and analyze quantitative and qualitative data in the related areas, interpret results and propose solutions | |
| 3) | Recognize the importance of technological development, especially in information technologies, and utilize them in business administration | |
| 4) | Evaluate the body of knowledge in the dynamic business world and business functional areas to asses needs, manage and lead change by using critical and innovative thinking | |
| 5) | Discover and create entrepreneurial opportunities and expertise to successfully establish and develop their own ventures | |
| 6) | Fulfill their responsibility in teamwork and projects in businesses, and act as a leader | |
| 7) | Communicate in written and oral English with people from diverse backgrounds, and have the English proficiency to follow and interpret the global dynamics in the areas of business administration | |
| 8) | Recognize individual and multi-cultural diversity, and can emphatically interact with individuals from diverse cultural backgrounds in social and professional settings | |
| 9) | Identify standards of personal, professional, social and business ethics, evaluate the ethical implications of various practices in the related areas, and be aware the importance of ethical behavior in adding value to the society | |
| 10) | Recognize interrelationship among business and other disciplines, and relate knowledge from diverse areas to formulate novel solutions in the area of business administration |
Learning Activity and Teaching Methods
| Field Study | |
| Lesson | |
| Group study and homework | |
| Homework | |
| Project preparation |
Assessment & Grading Methods and Criteria
| Written Exam (Open-ended questions, multiple choice, true-false, matching, fill in the blanks, sequencing) | |
| Oral Examination | |
| Individual Project |
Assessment & Grading
| Semester Requirements | Number of Activities | Level of Contribution |
| Midterms | 1 | % 40 |
| Final | 1 | % 60 |
| total | % 100 | |
| PERCENTAGE OF SEMESTER WORK | % 40 | |
| PERCENTAGE OF FINAL WORK | % 60 | |
| total | % 100 | |
Workload and ECTS Credit Grading
| Activities | Number of Activities | Workload |
| Course Hours | 16 | 48 |
| Study Hours Out of Class | 16 | 64 |
| Project | 1 | 12 |
| Homework Assignments | 5 | 10 |
| Quizzes | 4 | 2 |
| Midterms | 1 | 15 |
| Final | 1 | 22 |
| Total Workload | 173 | |