POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

COLLEGE OF ACCOUNTANCY AND FINANCE

DEPARTMENT OF ACCOUNTANCY

COURSE TITLE FINANCIAL MANAGEMENT

COURSE CODE ACCO 20123
CREDIT UNITS 3 UNITS
COURSE PREREQUISITE ACCO 20043: Financial Accounting and Reporting 2
COURSE DESCRIPTION This course is intended to help students understand relationship of accounting and finance in order to formulate appropriate financial strategies that maximize shareholders’ wealth. The course will
help students understand relationship between various items in the financial statements and incorporate these in actionable strategies that are beneficial for the organization. Students will understand
the concepts of risk and return and how this relates to capital management of the business. Students will learn various techniques and methodologies that financial managers need to provide sustainable
decision-making support to the organization such as financial statement analysis, financial planning, working capital management, cost of capital, leverage, and capital budgeting.
Institutional Learning Outcomes Program Outcomes Course Outcomes
1. Creative and Critical Thinking BSA and BSMA graduates must demonstrate the ability to review, interpret, evaluate Upon completion of the course, the students will be able to:
Graduates use their imaginative as well as a rational thinking ability to life financial data and systems in compliance with established policies, procedures, 1. Describe financial management and its importance to business
situations in order push boundaries, realize possibilities, and deepen their guidelines, agreements and/or legislation. They must be able to link data, knowledge and organization.
insight together with different sources and disciplines to make informed decisions.
interdisciplinary and general understanding of the world.
2. Understand financial statements and its components and derive
2. Effective Communication BSA and BSMA graduates should possess active listening skills and the ability to
Graduates are proficient in the four macro skills in communication (reading, effectively communicate one’s point of view, both orally and in writing, at all
insights from these for decision making.
writing, listening, and speaking) and are able to use these skills in solving organizational levels; be able to explain verbally and/or writing financial, statistical, 3. Determine methodologies to assess the risks involved in
problems, making decisions, and articulating thoughts when engaging with administrative matters/policies/procedures/regulatory matters/audit results at a level financial management and develop strategies to mitigate these
people in various circumstances. appropriate to the audience and must be able to negotiate effectively. 4. Describe the concept of maximization of shareholders’ wealth
3. Strong Service Orientation and how can financial managers contribute to the corporate
BSA and BSMA graduates should develop an ability to work in groups, possess skills to
Graduates exemplify the potentialities of an efficient, well-rounded, and growth
participate as member of a team or/and contribute to group effort; be able to teach others
responsible professional deeply committed to service excellence. new skills; be able to work to the satisfaction of the clients; negotiate and work with 5. Apply and relate the skills and knowledge obtained in financial
4. Community Engagement diversity or work well with men and women from diverse backgrounds.
management, accounting, and financial reporting to arrive at a
Graduates take an active role in the promotion and fulfillment of various
advocacies (educational, social and environmental) for the advancement of BSA and BSMA graduates must work with the highest standards of professionalism, to
holistic approach in solving problems.
community welfare. attain higher level of performance and generally to meet the public interest, he must
conform to the ethical standards of the profession that include: Integrity, objectivity and
5. Adeptness in the Responsible Use of Technology
independence, professional competence and due care, confidentiality, professional
Graduates demonstrate optimized use of digital learning abilities, including
behavior, and moral values.
technical and numerical skills.
6. Passion to Lifelong Learning BSA and BSMA graduates should possess general knowledge in gaining and
Graduates are enabled to perform and function in the society by taking understanding of the different cultures in the world and developing an international
responsibility in their quest to know more about the world through lifelong objective thus, he must possess competency in English language, adaptability to foreign
learning. business practices, level of trainability and good capabilities in dealing with foreign
partners.
7. High Level of Leadership and Organizational Skills
Graduates are developed to become the best professionals in their respective
BSA and BSMA graduates should not only be conversant with IT concepts for business
disciplines by manifesting the appropriate skills and leaderships qualities. systems but sound knowledge on internal control in computer-based systems,
8. Sense of Personal and Professional Ethics development standards and practices for business systems, management of the adoption,
Graduates show desirable attitudes and behavior either in their personal and implementation and use of IT, evaluation of computer business systems, and managing
professional circumstances. the security information.
9. Sense of National and Global Responsiveness
BSA and BSMA graduates should possess broad base of knowledge concerning macro-
Graduates’ deep sense of national compliments the need to live in a global
environmental, economic and industry issues, business process structures, functions, and
village where one’s culture and other people culture are respected.
practices. It includes knowledge in areas such as economics, quantitative models and
business statistics, organizational behavior, international business, ethics, and corporate
governance.
Course Plan
Week Topic Learning Outcomes Methodology Resources Assessment
1 Class Management The learner will: Lecture and discussion Copy of the syllabus Summary of student reflection
Introduction to the course • Have an appreciation of the coverage of the course Manage expectation by Student handbook and expectation
Discussion of the syllabus • Establish order in the class sharing insights of the Elect class officers prepare seat
Classroom policies instructor and the students plan.

1 Introduction to Financial Management After the session, the student is expected to: • Lecture Financial Management by • Recitation
• Definition and objectives of • Describe the concept of financial management and • Case study Payongayong, Roque and • Presentation
financial management its importance in achieving corporate objectives Ayuyao, 2nd Ed. Quiz
• Role of financial management in • Identify the roles of finance managers and how they
business influence other business functions
• Relationship of finance with other
relevant disciplines
• Legal forms of business
organization
• Finance organization and career
opportunities in finance
• Interface between finance and other
functions

2–4 Financial Statements Analysis After the session, the learner must: • Lecture Financial Management by • Recitation
• Components of Financial • Describe key components of financial statements • Case Study Payongayong, Roque and • Presentation
Statements and understand common terminologies found in Ayuyao, 2nd Ed. • Quiz
a. Statement of Profit or Loss financial statements
b. Statement of Financial • Be able to identify relevant information from
Position financial statements that can be used for different
c. Statement of Changes in Cash analyses
Flows • Calculate and interpret financial ratios
d. Statement of Changes in • Identify and describe the activities that affect cash
Owner’s Equity flows of the business and relate them to business
e. Notes to Financial Statements environment.
• Objectives of financial statements • Interpret and analyze statement of cash flows
analysis • Calculate free cash flows and described its
• Horizontal Analysis relationship to business valuation
• Vertical Analysis • Describe the effect of non-cash transactions in
• Ratio Analysis making economic decision.
1. Liquidity ratios
2. Activity ratios
3. Profitability ratios
4. Debt ratios
5. Market ratios
• Analyzing cash flows
 o Components (Operating,
Investing & Financing
activities)
o Free cash flows

5–6 Short-Term Financial Decisions After the session, the student is expected to: • Lecture Financial Management by • Recitation
• Net working capital • Identify components of working capital and why it • Case Study Payongayong, Roque and • Quizzes or Long Exams
• Cash conversion cycle is necessary to manage working capital Ayuyao, 2nd Ed.
• Cash management • Calculate, analyze, and interpret working capital
o Funding strategies financial indicators
o Managing receipts and • Identify what are the appropriate strategies that
disbursements optimize net working capital
• Receivables management
o Credit management (policy,
selection, terms, monitoring)
• Inventory management
o Inventory management
techniques (ABC, EOQ, JIT)
o Computerized systems
• Current liabilities management
o Spontaneous liabilities
o Accounts payable & accruals
management
• Unsecured source of short-term
loans

7–8 Financial Planning After the session, the learner is expected to: • Lecture Financial Management by • Recitation
• Definition of financial planning and • Describe the financial planning process of an • Case Study Payongayong, Roque and Quizzes or Long Exams
its role in the business organization and recognize its importance in Ayuyao, 2nd Ed.
• Benefits of financial planning achieving business objectives
• Distinction between strategic and • Identify steps in the budgeting process and be able
operating plans to prepare budget based on business requirement
• Financial planning process in an
organization
• Type of budgetary systems
o Master budget, Static budget,
Flexible budget
o Zero-based budgeting
o Continuous budgeting
• Profit planning
• Cash planning
• Pro forma financial statements
• Uncertainty in budgeting
 9 MIDTERM DEPARTMENTAL EXAMINATION
10 Time Value of Money After the sessions, the student is expected to: • Lecture Financial Management by • Recitation
• Role and importance of time value • Identify role of time value of money in financial • Case Study Payongayong, Roque and • Quizzes or Long Exams
of money in finance management Ayuyao, 2nd Ed.
• Future value and present value • Calculate appropriate present value based on what
o Single amount is needed by the organization
o Annuities
o Mixed stream
• Compounding of interest
o Annual
o Semi-annual
o Quarterly
o Monthly
• Other applications of time value of
money

11-12 Risk and return After the sessions, the student is expected to: • Lecture Financial Management by • Recitation
• Definition and relationship • Describe relationship between risk and return and • Case Study Payongayong, Roque and • Quizzes or Long Exams
between risk and return and its illustrate its importance in financial management Ayuyao, 2nd Ed.
importance to the business • Identify and explain strategies to mitigate risks to
• Different perspectives on risk maximize return
management (financial, enterprise, • Determine and interpret appropriate discount rate
etc.) which reflects uncertainty revolving the investment
• Nature and sources of risks
• Risk and return of assets
o Single asset
o Portfolio
• Risk preferences
• Diversification and correlation
• Capital Asset Pricing Model

13 Cost of capital After the sessions, the student is expected to: • Lecture Financial Management by • Recitation
• Basic concept and sources of • Describe cost of capital and its importance in • Case Study Payongayong, Roque and • Quizzes or Long Exams
capital financial management Ayuyao, 2nd Ed.
• Importance of cost of capital for • Identify relevant items affecting cost of capital and
the organization calculate cost based on business requirement
• Cost of long-term debt • Determine uses of weighted average cost of capital
• Cost of preferred stock in business decision making
• Cost of common stock
• Cost of retained earnings
• Weighted Average Cost of Capital
(WACC)
 14 Leverage After the sessions, the student is expected to: • Lecture Financial Management by • Recitation
• Definition and types of leverage in • Understand how capital structure and leverage • Case Study Payongayong, Roque and • Quizzes or Long Exams
business (operating and financial works and how this influences business strategies Ayuyao, 2nd Ed.
leverage) • Identify the optimal capital structure of a business
• Capital structure
• EBIT – EPS approach to capital
structure
• Approaches in determining the
optimal capital structure

15 – 17 Capital budgeting After the sessions, the student is expected to: • Lecture Financial Management by • Recitation
• Definition and objectives of capital • Describe the objectives and process of capital • Case Study Payongayong, Roque and • Quizzes or Long Exams
budgeting budgeting Ayuyao, 2nd Ed.
• Mutual vs Independent projects • Identify relevant cash flows that influence decision
• Unlimited Funds vs Capital making in capital budgeting
Rationing • Evaluate acceptability of a proposed investment
• Capital budgeting process based on the common techniques used
• Relevant cash flows in capital • Identify the factors affecting capital budgeting
budgeting decisions.
o Initial investment
o Operating cash flows
o Terminal cash flows
• Capital budgeting techniques
o Payback period
o Accounting rate of return
o Net present value
o Profitability index
o Internal rate of return
o Economic value added

18 FINAL DEPARTMENTAL EXAMINATION

Suggested Readings and References

• Payongayong L., Roque R. and Ayuyao O., Financial Management 2nd Edition
• CIRC HF 4026 B75 2013, Brigham, Eugene F., Fundamentals of Financial Management, 2013
• CIRC HF 4026 R826 2015, Ross, Stephen A., Financial Management: principles and applications, 2015
• CIRC HF 4910 S28 2015, Saunders, Anthony, Financial Markets, and institutions, 2015
• Gitman Lawrence J. and Zutter, Chad J., Principles of Managerial Finance, 13th edition. 2012
 Course Grading System
ONLINE MODE OF LEARNING
Class Standing 70%
Quizzes 50%
Assignments and other activities 20%
Departmental examination 30%
Total 100%

Final Grade = (1st Grading Period + 2nd Grading Period)

2
CORRESPONDENCE MODE OF LEARNING
Result from Online Final Departmental Examination 60%
Result from the activities in the modules 40%
Total 100%

Classroom Policy
The allowed number of absences for students enrolled in ACCO 20123 with once-a-week meeting is four (4). Request for excused absences or waiver of absences must be presented upon reporting back to class. Special
examinations will be allowed only in special cases, such as prolonged illness. It is the responsibility of the student to monitor his/her own tardy incidents and absences that might accumulate leading to a grade of
“FA,” (Failed due to Absences). It is also his/her responsibility to consult with the teacher, chair or dean should his/her case be of special nature.

All BSA and BSMA students are expected to be academically honest. Cheating, lying and other forms of immoral and unethical behavior will not be tolerated. Any student found guilty of cheating in examinations
will (at a minimum) receive a grade of 5.0 in the said test.

Consultation Time
Subject to the availability of the subject teacher, student may approach the subject teacher for queries about his/her grade as well as other academic requirements for the subject.

Prepared by: Enhanced by: Reviewed by:

(sgd.) (sgd.) (sgd.)
Ryan C. Roque, CPA, MBA Luzviminda S. Payongayong, CPA Lilian M. Litonjua, CPA, MBA
Faculty Member Faculty Member Chairperson

Recommending Approval:
(sgd.)
Dr. Julieta G. Fonte, CPA
Dean, College of Accountancy and Finance

Approved by:
(sgd.)
Dr. Emanuel C. De Guzman
Vice President for Academic Affairs

Revised March 2021