This module aims to provide students with a comprehensive knowledge of the theoretical foundation and
framework for Financial Management. It aims to provide students with transferable analytical skills that can
be applied in various business scenarios.
The nature and scope of Financial Management:
The nature and purpose of financial management.The relationship with strategic management the financial objectives of a firm.Stakeholders.Shareholder wealth maximization. Financial strategy and organisational objectives for commercial and not-for-profitorganisations. Financial strategy and the role of the financial manager.Corporate Governance.. Corporate social responsibilitytowards shareholders and society. The Financial Management Framework. Current developments in areas of business andfinance relevant to this module.
Interpretation of accounts:
The financial statements and their role as providers of information for investors. Operating performance. The importance of cashflows. Users of financial statements. Solvency-liquidity ratios. Debt management ratios- gearing/leverage ratios. Assetmanagement ratios or efficiency ratios. Profitability ratios including Stock Market ratios. Trend analysis. Horizontal analysis andCommon Size Statements. International accounting practice. Limitations of ratio analysis. Other factors affecting financialperformance and position and share values. Annual Reports of listed companies.
The nature and importance of working capital management. The cash flow cycle. Working capital investment and sales.Calculation of working capital requirements. Shortening the cash cycle. Methods employed to manage stock/inventory,debtors/receivables and cash. Main elements of trade credit policy and assessment methods for creditworthiness of a creditcustomer. The stages in the debt collection process. Analysis of aged debtors/receivables. Remedies for bad debts . Themanagement of trade creditors/payables and bank overdrafts. Optimum inventory levels- safety stocks, EOQ, JIT, MRP,outsourcing. Financial implications of different working capital policies. Working capital problems of the small business.Overtrading – reasons, causes, effects and remedies.
Sources of finance:
Key features of the main sources of finance .Short , medium and long term sources of finance. Share capital - including forms ofshare issue, redemption and repurchase of shares. Loan capital - including mezzanine finance, junk bonds, eurobonds, warrants,convertibles, debentures and mortgages. Leasing (including sale and leaseback) and hire purchase. Invoice discounting and debtfactoring. Bills of exchange and acceptance credits. Other sources of bank finance and internal sources of finance. Factorsinfluencing choice of financing methods. The effect of financing decisions on risk, income and control. Finance and the smallbusiness. Financial planning. The Business Plan. Government sources: grants, regional and national aid schemes and taxincentives. Nature and role of Venture Capital. Cash flow projections for establishing financing requirements.Using excel forfinancial projections.
How firms identify potential investment opportunities, Investment appraisal techniques, net present value, internal rate of return,payback, accounting rate of return, impact of inflation, risk and uncertainty
Economics is introduced in year 1 and developed further in semester 3 of year 2. Finance is introduced in semester 4 in year 2 with the module Personal Finance. This progresses on to Financial Management in year 3 culminates in year 4 with International Corporate Finance, Banking & Financial Services and Sustainable Finance. The teaching strategy for the Economics and Finance modules is one which emphasises the need for the student to be actively engaged in the learning process, both in class and when they are studying in their own time. In order to achieve this, students are encouraged to ask and answer questions during class, to participate in class discussions, to do examples in class as well as following worked solutions prepared by the lecturer. Students are required to engage with the financial press to support the development of their understanding. Cumulative knowledge in the Economics and Finance modules is important and the linkage to other modules including Financial Accounting, Economics, Management Accounting, Business Ethics, and Taxation is relevant. The lecturers use a teaching strategy, which helps to build on students’ prior knowledge of Economics and Finance and related areas thereby encouraging a constructivist learning approach among students. Lecturers use a concept-based approach to teaching Finance. Practical examples taken from real business events are used to emphasise both practical and theoretical financial concepts.
|Module Content & Assessment