TABLE OF CONTENTS

COVERLEAF

PREFACE

COURSE OVERVIEW

MODULE 1 AN INTRODUCTION TO FINANCIAL MANAGEMENT

Financial Management, Accounting and Control, defined

The Firm and its Environment
The Potential Conflict between the Owner and Management Goals
Goals of the Firm
Financial Policy, Planning and Control Functions
Finance Functions by Organization and Decision Type
Activity 1

MODULE 2 AXIOMS OF FINANCIAL MANAGEMENT

Axiom 1 - The Risk-Return Tradeoff

Axiom 2 - The Time Value of Money
Axiom 3 Cash
Axiom 4 - Incremental Cash Flows
Axiom 5 - The Curse of Competitive Markets
Axiom 6 - Efficient Capital Markets
Axiom 7 The Agency Problem Cash
Axiom 8 Taxes
Axiom 9 - All Risk Are Not Equal
Axiom 10 Ethical Behavior
Activity 2
MODULE 3 - FORMS OF BUSINESS ORGANIZATIONS

Legal Structure of the Different Forms of Business Organization

Continuity of Existence
Transferability of Ownership Interest
Capital and Credit Requirements
Tax Considerations
Advantages and Disadvantages of Each Form of Business Organization
Activity 3

MODULE 4 FINANCIAL STATEMENTS

The Basic Financial Statements

Trial Balance
Balance Sheet
Income Statement
Cashflow Statement
Activity 4

MODULE 5 FINANCIAL RATIO ANALYSIS

Liquidity ratios
Asset turnover ratios
Financial leverage ratios
Probability ratios
Divided policy ratios
Activity 5

MODULE 6 - FINANCIAL FORECASTING, PLANNING AND BUDGETTING

Financial forecasting
Strategic planning
The sales forecast
Activity 6
MODULE 7 CAPITAL BUDGETING
Capital budgeting decision criteria
Net Present Value
Internal Rate of Return
Payback Period
Benefit Cost Ratio
Hypothetical Example
Activity 7

MODULE 8 MATHEMATICS AND FINANCE

What is tine value?
Present Value
Present Value of a Future Payment
Continuously Compound Rate of Interest/Perpetuities
Semiannual Rates of Return
Quarterly, Monthly and Daily Rates of Return
Scaling Over Multiple Periods
Activity 8
 FOREWORD

Today, a good idea is not good enough. Leaders must demonstrate that their idea
will deliver measurable results to the bottom line. To drive innovation and organizational
success, leaders need to make effective business decisions that provide the most
economic value to their organizations. To ensure success, they must also effectively
communicate and discuss project and investment alternatives with an organization's
financial managers. In many organizations, however, miscommunication and limited
access to financial management tools and methods hinder decision-making.

Financial Management provides managers with a financial mindset that addresses

these problems and allows them to make better business decisions. Each chapter is
designed to demystify financial terminology, assumptions, and concepts for non-financial
managers by using easily understood, relevant case examples and engaging, interactive
explanations of each concept. The series includes a combination of finance and
accounting topics and will enable participants to interpret financial information, assess
the costs and benefits of business decisions, and communicate operational and financial
strategies.

This lecture manual is a maiden issue, hence, it is possible that there are some
mistakes in terms of grammar, formulae and analysis, to mention a few. The author
welcomes any comments and suggestions to further improve this instructional material.

ROCELYN M. BARROGA, DBA

Faculty Member, Department of Agri-Management
College of Agriculture
 COURSE OVERVIEW

Catalogue Number: AgBus 215

Course Title: Financial Management

Course Description: Short and long-range financial planning and control of

agribusiness organizations

Class: 3 hours lecture/discussion per week

Credit: 3.0 units

Pre-requisite: AgBus 105 (Managerial Accounting)

Course Requirements:

A. First Term Examination 25%

B. Second Term Examination 25%
C. Final Examination 25%
D. Case Analysis Reports and other Projects 15%
E. Quizzes and Assignments 10%
TOTAL 100%

Instructional Goal:

The course aims to develop would-be-financial managers by enhancing their

analytical, managerial and decision-making skills.
 COURSE OVERVIEW

Catalogue Number: AgBus 715

Course Title: Financial Management, Accounting and Control

Course Description: Application, analysis and control of financial systems and

accounting procedures

Class: 3 hours lecture/discussion per week

Credit: 3.0 units

Pre-requisite: AgBus 245 (Financial Management or Consent of

Professor)

Course Requirements:

A. First Term Examination 25%

B. Second Term Examination 25%
C. Final Examination 25%
D. Case Analysis Reports and other Projects 15%
E. Quizzes and Assignments 10%
TOTAL 100%

Instructional Goal:

The course aims to develop would-be-financial managers by enhancing their

analytical, managerial and decision-making skills.