Accounting and Finance for Engineers – MA501

Course Details

Credits: 3

Pre-requisites: None

Compulsory / Optional: Compulsory for the Department of Mechanical Engineering / Optional for Other Departments Compulsory / Optional – Compulsory for Mechanical Engineering with Business Track of Mechanical Engineering / Optional for Others

Aim(s)

To provide basic concepts of financial accounting, financial management and management accounting to students, so that they can function effectively as professional engineers in future.

Intended Learning Outcomes
  1. Describe the role and goals of Accounting and Finance for a business.
  2. Apply suitable capital budgeting techniques to make long-term investment decisions.
  3. Examine suitable financing options for different requirements and stages of a business.
  4. Analyse financial performance of a business using financial statements and ratios.
  5. Apply costing and budgeting techniques appropriate to different activities and decisions.
Course Content
  1. Introduction: Branches of finance and accounting; why engineers need finance and accounting; goals of a firm.
  2. Important Financial Concepts: Time value of money; risk and return.
  3. Capital Budgeting Techniques and Working Capital Management: Process of capital budgeting; capital budgeting techniques – ARR, payback, NPV, IRR; effect of risk; inflation and tax on investment decisions; spreadsheet analysis on capital budgeting; working capital management – profitability vs. liquidity.
  4. Financing Decision: Financing requirements of a business; sources of finance and different classifications; life cycle financing; capital structure and cost of capital.
  5. Financial Statements and Analysis: Basic accounting concepts; accounting statements – balance sheet; income statement; cash-flow statement; statement of retained earnings; key financial ratios; ratio analysis.
  6. Costing and Budgeting Techniques for Decision Making: Types and nature of costs; activity based costing vs. traditional costing; cost-volume-profit (break-even) analysis and decision making; operating budgets and cash budgets.
  7. Reports and presentations:
Time Allocation Hours
Lectures 9
Tutorials Small Group Discussion 31
Assignments 10
Assessment Percentage Marks
Small Group Activities / Case Studies / Assignments / Presentation 60
End Semester Examination 40