E TITLE: ADVANCED FINANCIAL MANAGEMENT
Course code: MBA 522
Credit hours: 2
Course instructor:
Course Descriptions
The course provides an introduction to corporate financial management. It is designed to
introduce students to the concepts and techniques necessary to analyze and implement
optimal investment and financing decisions by firms. The emphasis of this course will be on
the major methods that users need to employ to analyze financial information such as ratio
analysis, prospective analysis i.e., forecasting and valuation, on the quality of financial
information and business strategy analysis, applications, i.e., credit analysis and bankruptcy
prediction, security analysis, management communication, economic value added, role of
financial information in dividend policy and mergers and acquisitions, corporate governance,
the effects of time and uncertainty on decision-making, and international financial analysis
and contemporary issues in financial analysis.
Course Objectives
After completing this course, the students will be able to:
Identify and describe the internal and external financial structures of the firm
Assess where and how to finance projects which the firm is considering
Determine whether or not to undertake a particular investment project
Analyze the relationship between risk and return when evaluating different
investments
Discuss the pros and cons of various investment drives
Course Content
Chapter One: An Overview of Financial Management
1.1. Basic Assumptions and Principles of financial management
1.2. Scope of financial management
1.3. Function of financial management
1.4. Goal of firms
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1.5. Agency problem
Chapter Two: Financial Statement Analyses and Planning
2.1 Financial Statements Analysis
2.2 Financial Planning
Chapter Three: Time Value of Money
7.1 The Concept of Time Value of Money and Interest Rate
7.1 The Concept of Compounding and Discounting;
7.1 Present and Future Values of a Single Sum,
7.1 Present and Future Values of Annuity,
Chapter four: Financing and Capital markets
4.1 The role of capital markets and investment banking
4.1 Markets and their features
4.1 Financial Assets and their characteristics
4.1 Theory of Market Efficiency
Chapter Five: Risk and Return
5.1. The concept of risk
5.2. Types and measures of risk
5.3. Diversification and portfolio concept
Chapter Six: Valuation and Cost of Capital
6.1. Valuations of Bonds and Stocks
6.2. Cost of capital markets
Chapter Seven: Financing Decisions
7.1. Sources and features of financing
7.2. Capital structure
7.3. leverage
7.4. Ethiopian Financing opportunities
Chapter Eight: Investment Decision
8.1. Cash flows determination with certainty
8.2. Capital budgeting under uncertainty
8.3. Investment selection criteria
Mode of Delivery
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Lecture, evaluation of different financial reports, case studies, problem solving, term paper
preparation and presentation, class works, independent students work on analyzing business
financial practices
Evaluation Scheme
Term Paper and Presentation 30%
Case Analysis and Presentations 20%
Final Exam 50%
Total 100%
References
1 Brigham, Eugene and Ehrhardt, (2002), Financial Management, Theory and Practice,
10th edition, Australia: South Western Thomson Learning.
2 Brennan, Michael J., “A new look at the Weighted Average Cost of Capital” journal of
Business Finance. 5 (spring 1973), pp.24-30
3 Donaldson, Gordon, “Financial Goals: Management vs Stockholders.” Harvard
Business Review, 41 (May-June 1963) pp.116-129.
4 Ezra Solomon and J. Pringle; “An Introduction to Financial Management,” Santa
Monica Calif Good year 1980.
5 J. Fred Weston and Thomas E. Copeland; “Managerial Finance,” 9th ed. The Dryden
Press. New York
6 Weston, J. Fred, “Investment decisions using the Capital Asset Pricing Model,”
Financial Management. 2(spring 1073), pp25-33.