Introduction to Financial Management

FIN B280 Introduction to Financial Management is a one-term, five-credit course designed to equip learners who are planning to pursue a career in the business- or finance-related sector with essential skills in financial management. It aims to help you acquire a firm understanding of the scope and functions of financial management, as well as a solid base of foundation knowledge and crucial techniques needed for managing the financial resources of a business firm. This course also provides a framework to help you learn how to evaluate the three major decisions of investment, financing, and working capital management that are to be made by financial managers in their management of corporate financial resources.

FIN B280 is a core course and must be taken by all learners wishing to complete their BBA degree. You are strongly advised to take ACT B210 Introduction to Financial Accounting (or ACT B211 and ACT B212) and BUS B170 Quantitative Methods for Business (or BUS B171 and BUS B272) before taking this course.

Course aims

FIN B280 aims to provide you with a solid base of financial knowledge and theories for a corporation so that you can use financial information to make sound business decisions.

Course learning outcomes

Once you have completed this course you should be able to achieve the following course learning outcomes:

• Critically assess the implications of key concepts that are important for making financial decisions.
• Apply appraisal techniques to evaluate capital investment projects under different conditions and constraints.
• Explain and discuss how to determine the optimal capital structure that meets the long- term needs of a firm.
• Devise appropriate working capital management policies and strategies to achieve financial objectives of a firm.

The following table gives a general overview of the course structure. It suggests the amount of time you should allow for completing units and provides a broad schedule for you to plan your work. This estimation includes time for reading the units and custom textbook, completing activities, self-tests and the assignment, attending learning sessions, and preparing for your final examination.

Unit 1 introduces the scope, key concepts, and basic tools of financial management. Unit 2 presents the essential tools for valuing financial assets and discusses the significance of risk concept for such valuation. Unit 3 focuses on the application of capital budgeting techniques and highlights the conceptual framework for making capital investment decisions. Unit 4 offers a discussion of the cost of capital concept and the factors affecting a firm's financial leverage and dividend policy. Finally, the components of working capital and their importance to a firm's liquidity position and profitability are presented and discussed in Unit 5.

You are advised to set aside sufficient time to work on the self-test questions and activity exercises that are the non-assessed components for this course. They are designed to help you learn and apply those principles, concepts, tools, and techniques covered in the unit, as well as to prepare you for working on the assignment. You are expected to have fewer problems in working on your assignment once you have completed these non-assessed components.

In some activities, you will be asked to search for information needed for completing the exercises. Be sure to strictly follow the instructions as you progress through the activity exercises or self-test questions.

In this course's custom textbook-based approach, the course learning modules are selected from a well-established introductory finance textbook.

Your study pathway through the custom textbook is set out in an HKMU-produced study guide. In addition to the guided activities and self-tests already provided in the custom textbook, the study guide includes supplementary material and additional self-assessment opportunities. You will also have access to multimedia materials on HKMU's Online Learning Environment (OLE), and regular meetings for lectures and live online tutorials.

This course's combination of the latest edition of the textbook, plus the Study Guide, and multimedia and face-to-face learning opportunities, will provide you with a comprehensive description, explanation and discussion on relevant concepts, principles, and tools in corporate finance.

To start off, you should watch the introductory video for the course that you can find on the OLE. Then turn to the Study Guide for further guidance through the course.

Introductory video

To start off, you should watch the introductory video for the course in the ePub version of this Course Guide or on the OLE. Then turn to the Study Guide for further guidance through the course.

The custom textbook

A custom textbook will be provided to you as an integral part of your course package. The title of the custom textbook is FIN B280 Introduction to Financial Management. The chapters are selected from the following textbook.

Ross, S A, Westerfield, R W and Jordan, B D (2021) Fundamentals of Corporate Finance, 13th edition, McGraw-Hill.

The study guide will indicate at which point you should read each chapter of the custom textbook.

The Study Guide

The Study Guide is divided into five units. It sets out your study pathway through the customized textbook and other course learning resources, and will provide supplementary material and additional self-assessment opportunities.

Online Learning Environment

This course is supported by the Online Learning Environment (OLE) of the university. You will find course materials and the latest course information from the OLE.

You can also communicate with your tutor, the Course Coordinator and other fellow classmates through the OLE. For details about the OLE and how to access it, please refer to the Online Learning Environment User Guide.

Learning support

You will be supported throughout the course by regular learning sessions in the form of live online tutorials and a live online surgery.

At the commencement of this course, a tutor will be assigned to help you in your study. Please note that much of your communication with HKMU during the course will be with your tutor who marks your assignment and offers timely feedback. Your tutor is eager to help you complete this course successfully, and will closely monitor your learning progress by keeping in regular contact with you. If you encounter difficulties in your studies, you should always turn to your tutor for assistance. It is believed that learners who maintain regular contact with their tutors often achieve better performance in their studies.

You will be informed of the name and telephone number of your tutor once you are assigned to a tutorial group. Your tutor will set aside certain preferred hours of contact every week in order to attend to your telephone queries. They will inform you of these preferred hours in the first tutorial session. Please show consideration for your tutor by making telephone contact only during the preferred hours.

Do not hesitate to telephone your tutor whenever you need assistance in your studies, for example, if you:

• do not understand any part of the study units; or
• have difficulties in working on the self-tests or activity exercises; or
• have queries about assignment questions, your tutor's feedback, or grading on the assignment.

You are strongly advised to keep a copy of the assignment which will be sent to your tutor. It will always prove useful if you wish to refer to them during telephone conversations with your tutor.

To assist you in this course, your tutor will conduct non-compulsory live online tutorials throughout the term. In each of these learning sessions, key concepts and crucial techniques will be reviewed and reinforced; topical issues will be discussed; individual student questions answered. The usefulness of these learning-sessions will depend largely on your willingness to participate. Your preparation for discussion always enables you to benefit more from these sessions.

You will be notified of the details of the learning sessions once you are assigned to a tutorial group. Although these sessions are non-compulsory, you are strongly recommended to attend all of them. They will help you in your studies and enhance your chance of achieving better performance. They also offer you the valuable opportunities to exchange views with other learners who are striving towards the same goal.

Tutors are required to start the learning sessions on time. If a tutor fails to turn up 30 minutes after the scheduled starting time, learners may assume the session is cancelled and that they should report the case to the Course Coordinator for the arrangement of a make-up session.

Your tutor is responsible for grading your submitted assignment. If you disagree with the grading, try to resolve the issue with your tutor. Remember your tutor is your first point of contact with HKMU in all academic matters. If your tutor is unable to resolve a problem, then you should contact the Course Coordinator immediately.

Equipment required

You may invest in a financial calculator such as the HP12C or Texas Instrument BA II Plus, which may help you with the time value calculations in your study. Please note that you will be allowed to use either of the above calculators — but not the Casio FC 100V, Casio FC 200V or Casio FC 200 — in the examination for this course.

This course is designed to assist you to move easily from the stated objectives, through the study units, readings, and materials to the assignment and examination. During the course, you will have your progress assessed both formally and informally.

The following table summarizes the assessment requirements for this course. The pass mark for each assessment item is 40. In order to pass this course, you must pass both the assignment and the examination components.

Assignments

This course contains two assignments. They build the continuous assessment of this course. The two assignments are equally weighted and account for a total of 40% of the overall course assessment. They are intended to motivate you to evaluate your achievement in learning the financial knowledge and acquiring the essential skills in managing a firm's financial resources. Both require you to apply your numeracy, problem-solving, and decision-making skills.

Assignment 1 is a question-type assignment in essay and problem-solving format. It covers the topics in Units 1 and 2 and aims to help you acquire a solid understanding of the foundation concepts and skills in financial management.

Assignment 2 is a question-type assignment in essay and problem-solving format. It encompasses the topics in Units 3 and 4 and aims to help you practise your skills of application, analysis, and problem solving in making investing and financing decisions.

How to submit assignments

You must use Microsoft Word and/or Excel to prepare the assignment, and submit the assignment via the OLE. The assignment must be uploaded to the OLE by the due date.

Failure to upload an assignment in the required format to the OLE may result in the score of the assignment being adjusted to zero.

Assignment submission extension policy

The assignment policy of the University as stated in the Student Handbook should be observed. You are required to submit assignments for this course in accordance with the dates communicated by your Course Coordinator. You may apply for a submission extension on the grounds of illness, accident, disability, bereavement or other compassionate circumstances.

Applications for extensions must be submitted online via the OLE. Please note the following:

• Supporting documents must be submitted to justify applications for extensions of over
  seven days.
• Applications for extensions should normally be lodged before or on the due date.
• Applications are considered by:
  — your tutor for extensions of up to seven days;
  — the Course Coordinator for extensions of 8 to 21 days; and
  — the Dean for extensions of over 21 days.

After an assignment is submitted via the OLE, it is your responsibility to check that the assignment has been successfully submitted. Extension applications due to any problem with uploading will not be accepted. The University cannot accept any responsibility for assignments that are not received by your tutor due to any problem with submission via the OLE. As a precaution, you are advised to keep a copy of each assignment you submit.

According to the University's policy, no extension of the due date will be allowed for the final assignment. This policy will be strictly enforced. Any late submission of the final
assignment will result in the score of the assignment being adjusted to zero.

Examination

The summative assessment for this course will be conducted through an examination that aims to evaluate your comprehensive understanding of the significant implications of various financial decisions faced by corporate financial managers when discharging their duties for increasing the value of a firm.

The examination, which accounts for 60% of the overall course marks, is a three-hour, closed-book, comprehensive examination in multiple-choice question, short-essay, and long- problem format. It covers the main topics in Units 1, 2, 3, 4 and 5.

Please note that the questions and problems in the examination are of a comprehensive nature, meaning that each question/problem covers related subject issues discussed in two or more units. In other words, all questions and problems are not of a straight-forward nature and are not confined to topics covered in one particular unit. The comprehensive examination requires you to apply your numeracy, application of techniques, analysis and interpretation, problem solving, and decision-making skills.

The HKMU support system, including tutorial and online support, causes distance learning to become more effective and rewarding. It will increase your chance of completing this course successfully if you make use of the support properly.

Here are a few hints that will help you work through the course materials:

• Remember financial management is not a course about numbers and computations. It is about projection, analysis, and reasoning.
• Numbers and computations are only used for generating information for your reference when making a financial decision.
• Always remember you are now doing a finance course. A finance decision is made today based on projections about foreseeable future events, whereas an accounting decision is made based on information about past events.
• The cash-flow and value concepts are the backbone of many finance theories and principles. You must learn to assess and interpret the significance and implications of these concepts when making financial decisions.
• You must learn why and how to pick the right equation or formula for yielding the value from which you can draw inferences.
• Work on your study units in an orderly manner every day in order to keep your interest up.
• Find a quiet place where you will not be interrupted from your study.
• Do not let yourself slip behind schedule or otherwise you will have to face the risk of losing all interest in the course towards the end of the semester.
• Call your tutor for assistance if you encounter difficulties in your studies.
• Discuss the course materials and subject issues with your classmates.
• Attend all live online tutorials and surgeries, and participate actively in class.

FIN B280 Introduction to Financial Management intends to cover the many foundation aspects of corporate financial management. It aims to introduce you to the three major categories of financial decisions (i.e. capital investment, long-term financing and working capital management) that a financial manager has to make when managing a firm's financial resources for achieving its financial objective. Although North American companies are used as examples for illustration and explanation, you will often find the concepts, knowledge, tools, and techniques that you have learned in this course are also of relevance to the Hong Kong business setting. Upon completion of this course, you should be able to apply your knowledge and skills to your work in most of the situations.

Please note that the philosophy of assessment for this course is 'you earn the grade; the tutor/Course Coordinator does not give the grade.' You may have a better chance to achieve higher performance if you are prepared to do more work in your studies.

Now, learn the final words of wisdom from the greatest teacher in the history of China.

Learning without thought is labour lost; thought without learning is perilous.

— Confucius (Analects)

If you wish to defer your studies of this course until a later date, you should apply for deferment of studies. For the regulations governing deferment of studies, please refer to your Student Handbook. If you have applied for deferment of studies you should continue with your studies of this course and submit the required assignments until formal approval is given by the University.

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