Basic Business Finance
Class: 11
Subject Code: 417
Credit Hours: 5
Teaching Hours: 160 (120+40)
1. Introduction
Business finance is an important area of study which incorporates the fundamental aspects of economy.
Finance at its origin, concerned with financial instruments and institutions only, has now been expanded to the areas like mathematics, statistics, working capital management, investment decision, financial analysis, risk, insurance, and international finance.
Moreover, increased globalization and technology are dramatically transforming financial services and markets.
Nowadays, there are growing concerns on financial issues such as growth and development of economy, rise and fall of stock markets, dividends, project budgets, imports, exports, ethical issues and so on.
This curriculum aims at presenting the basic financial literacy and fundamental principles of finance that facilitates in financial decisions in a simpler and lucid manner.
This course contains basic contents of business finance and brings together some theoretical and practical perspectives.
Hence, it is important to those who wish to enter the job market or continue their studies at university level.
Basic finance has been offered as one of the optional subjects in both Grades 11 and 12 according to the national curriculum framework.
Along with level-wise competencies, grade-wise leaning outcomes and scope and sequence of contents, suggested practical/project activities, learning facilitation process and assessment strategies have been incorporated in the curriculum.
2. Level-wise Competencies
On completion of Grade 11 and 12, the students will build up the following competencies.
(1) Describe meaning and functions of business finance
(2) Explain different financial instruments used to mobilize financial resources
(3) Identify and describe the role of financial institutions and financial markets
(4) Develop basic understanding and skills on investing in primary market, trading in secondary market and using banking transactions
(5) Explain the functions of micro finance and cooperatives and their transactions process
(6) Describe the principles, types and procedures of insurance
(7) Explain the functions of mutual fund
(8) Calculate the interest rate, present value, future value of cash flows and the value of bond and common stock
(9) Analyze financial statements
(10) Identify the sources of fund with their features, advantages and disadvantages
(11) Compute payback period and net present value
(12) Describe working capital and its importance
(13) Demonstrate the understanding of exchange rate quotation and compute the cross rate.
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COURSE CONTENTS
Unit 1: Introduction to Business Finance [WH 10]
1.1 Meaning of business finance
1.2 Finance functions
1.3 Goals of the firm
1.4 Organization of finance functions
Unit 2: Business Entity and Financial Environment [WH 10]
2.1 Forms of business organization:
2.1.1 Sole proprietorship
2.1.2 Partnership
2.1.3 Company
2.2 Business and taxes
2.3 Financial environment
2.4 Financial assets
2.5 Financial market
2.6 Financial intermediaries: Introduction, types and role of financial institution
2.7 Other institutions
Unit 3: Financial Assets [WH 10]
3.1 Meaning and characteristics of financial assets
3.2 Real vs. financial assets
3.3 Instruments of financial assets
3.4 Long–term vs. short-term
3.5 Ownership vs. creditorship
3.6 Fixed return vs. variable return instruments
3.7 Derivatives
3.8 Long-term instruments: Common stock, preferred stock and bonds/Debentures
3.9 Short-term instruments: Treasury bill, bankers’ acceptance, commercial paper, promissory notes, bill of exchange, letter of credit, certificate of deposits
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Click on link for YouTube videos of Class 11: |
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Accounting Equation |
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Basic Journal Entries in Nepali |
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Basic Journal Entries |
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Journal Entry and Ledger |
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Ledger |
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Subsidiary Book |
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Cash Book |
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Trial Balance & Adjusted Trial Balance |
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Bank Reconciliation Statement (BRS) |
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Depreciation |
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Final Account: Class 11 |
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Adjustment In Final Account |
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Capital and Revenue |
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Single Entry System |
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Non-Profit Organization (Non-Trading Concern) |
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Government Accounting |
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Goswara Voucher (Journal Voucher) |
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Unit 4: Financial Market [WH 14]
4.1 Concept and types of financial markets
4.2 Primary and secondary markets
4.3 Money and capital markets
4.4 The secondary market: organized exchanges and over-the-counter market
4.5 Role of financial markets
4.6 Participation in primary markets: Initial public offering (IPO), further public offering (FPO), rights offering
4.7 Demat account, CRN (Central-ASBA registration number) number
4.8 Participation in secondary markets: Stock broker, dealer, market maker, know your client (KYC) form, buy and sell order, stock quotations
4.9 Nepal Stock Exchange: Introduction and functions
4.10 Securities Board of Nepal: Introduction and functions
Unit 5: Commercial Banks [WH 14]
5.1 Meaning and types of banks
5.2 Functions of bank
5.3 Services offered by commercial banks
5.4 Types of accounts (deposits)
5.5 Categories of loans (credit)
5.6 Innovations in banking technology:
5.6.1 Online banking
5.6.2 Mobile banking
5.6.3 Internet banking
5.6.4 Swifts
5.7 Regulator of banks: Nepal Rastra Bank (NRB)
5.8 Functions of NRB
5.9 NRB classification of financial institutions:
5.9.1 Commercial bank
5.9.2 Development bank
5.9.3 Finance company
5.9.4 Micro finance
Unit 6: Micro Finance and Cooperatives [WH 10]
6.1 Concept and importance of micro finance
6.2 Functions of micro finance
6.3 Difference between banks and microfinance
6.4 Meaning and types of cooperatives
6.5 Organization of cooperatives
6.6 Difference between micro finance and saving and credit cooperatives
Unit 7: Risk and Insurance [WH 12]
7.1 Risk: Concept and types
7.2 Concept and evolution of insurance
7.3 Benefits of insurance
7.4 Nature of insurable risks
7.5 Principles of insurance
7.6 Types of insurance
7.7 Features of insurance contract
7.8 Meaning, objectives and methods of reinsurance
7.9 Regulator of insurance companies: Nepal Insurance Board
Unit 8: Life and non-life Insurance [WH 10]
8.1 Concept and importance of life insurance
8.2 Elements of life insurance contract
8.3 Procedures of affecting life insurance policy
8.4 Role of agents
8.5 Computation of life insurance premium
8.6 Types of life insurance
8.7 Concept and importance of non-life insurance
8.8 Types of non-life insurance and procedures
8.9 Concept and importance of micro insurance
Unit 9: Mutual Fund, Pension Fund and other Financial Service Companies [WH 10]
9.1 Mutual funds: Concept and advantages
9.2 Net asset value (NAV) of mutual funds
9.3 Open-end and close-end mutual fund
9.4 Difference between open-end and closed-end mutual fund
9.5 Growth of mutual funds in Nepal
9.6 Concept of pension fund companies
9.7 Role of pension fund companies
9.8 Meaning and role of merchant bankers
9.9 Functions of merchant bankers
9.10 Credit rating agency, Deposit and Credit Guarantee Fund, Credit Information Bureau
Unit 10: Time value of money [WH 20]
10.1 Concept of time value of money
10.2 Meaning of compounding and discounting
10.3 Concept of cash flow
10.4 Types of cash flow
10.5 Cash flow time line
10.6 Future value and present value of single cash flow
10.7 Solving for interest rates and time period
10.8 Annuities: Meaning and types
10.9 Future value of ordinary annuity and annuity due
10.10 Present value of ordinary annuity and annuity due
10.11 Solving for annuity payments, interest rates and number of periods
10.12 Present value of perpetuities
10.13 Future and present value of uneven cash flows
10.14 Semi-annual and other compounding periods
10.15 Loan installment and loan repayment schedule
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Click on link for YouTube videos |
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Share (Accounting for Share) |
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Share in Nepali |
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Debentures |
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Final Account: Class 12 |
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Final Account in Nepali |
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Work Sheet |
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Ratio Analysis (Accounting Ratio) |
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Fund Flow Statement |
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Cash Flow Statement |
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Theory Accounting Xii |
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Theory: Cost Accounting |
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Cost Accounting |
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LIFO−FIFO |
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Cost Sheet, Unit Costing |
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Cost Reconciliation Statement |
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Suggested Practical/project Activities
Some examples of practical/project work activities to be performed by students of Grade 11
Unit |
Project Works |
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1 |
Introduction to Business Finance |
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Visit any two business firms of your locality and the web page of any one organization and note their goals. |
3 |
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2 |
Business Entity and Financial Environment |
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Visit any five business firms of your locality. List out their characteristics and classify them into the categories of sole proprietorship, partnership, company. |
2 |
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3 |
Financial Assets |
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Select an organization of your choice and fill in the following table with reference to the selected organization. |
5 |
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Examples of real asset |
Examples of financial assets |
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4 |
Financial Markets |
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4.1 Suppose you want to purchase shares through primary market, list out the requirements and steps to be followed while investing in primary market. |
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4.2 Visit a brokerage firm and collect KYC form to trade in secondary market. List out the documents required for KYC, fill in the form properly and attach required documents. |
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4.3 List out requirements and steps to be followed while purchasing shares in secondary market. |
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5 |
Commercial Banks |
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5.1 Visit a branch of a commercial bank/development bank/finance company in your local area and list out the functions it performs on the basis of an interview with one of the officers of the organization. |
5 |
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5.2 Visit the website of a commercial bank/development bank/finance company and list out the services offered by the institution. |
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5.3 Visit a financial institution and collect the application form for opening a saving account. List out the documents required to open a saving account, fill in the form properly and attach the required documents. |
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5.4 Visit websites of Nepal Rastra Bank (NRB) and list out: |
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– Number of commercial banks / Class A financial institutions – Number of Development banks/ Class B financial institutions – Number of finance companies/ Class C financial institutions |
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6 |
Micro Finance and Cooperatives |
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Is there any branch of micro finance and or cooperative in your locality? If yes, list out the services offered by them; then compare and contrast the functions of micro finance and saving and credit cooperative. |
5 |
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7 |
Risk and Insurance |
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Prepare a list of various types of risks and their examples. |
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8 |
Life and Nonlife Insurance |
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8.1 Form a team of five to seven students in your class. Visit any branch (or website) of life insurance company and collect information from the company branch (or website). Conduct an interview with the manager of the company to get information about various life insurance policies offered by the company. Present a report covering the type of each policy and their features in your class in the presence of your subject teacher. |
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8.2 Visit any branch of non-life insurance company in your local area (or website of non-life insurance company if branch is not accessible). Gather the information relating to various non-life insurance policies offered by them. Discuss and prepare short report on the type of risks coverage under those policies. |
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9 |
Mutual Fund, Pension Fund and other Financial Service Companies |
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Visit a merchant banker (or website of a merchant banker); then list out the functions and services offered by the institution. |
5 |
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10 |
Time Value of Money |
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List out the short-term and long-term interest rates charged by any two financial institutions on the money they lend and make a comparison showing how and why they are different. |
3 |
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Total |
40 |
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