This module is designed to provide the student with a reliable foundation in the area of financial management and to develop the knowledge and skills expected of a finance manager. The aim of the module is to develop knowledge and understanding of the role and objectives of financial management within an organisation, to ensure that students can apply judgement and appropriate techniques in financial management decisions including analysing capital investment opportunities and working capital management, portfolio theory, sources of finance and personal financial management.
Financial Management Objectives and Context
Nature, purpose and scope of financial management. Financial management environment. Ethical issues and the finance manager.
Investment Appraisal
Forecasting project cash flows. Appraising projects using NPV, IRR, MIRR, Payback Period and ARR. Accounting for uncertainty. Capital rationing. Asset replacement.
Long-Term Financing
Types of equity and debt. Valuing equity and debt.
Cost of Capital
Models and methods for calculating cost of equity and cost of debt. Weighted average cost of capital.
Capital Structure
MM Irrelevancy Theory. Theories of capital structure.
Dividend Policy
MM Irrelevancy Theory. Theories of dividend policy. Other distribution methods.
Working Capital Management
The nature of working capital and working capital cycle. Managing inventory, trade receivables, trade payables and cash.
Short- and Medium-term Sources of Financing
Bank financing. Inventory financing. Money markets. Lines of credit. Leasing and hire purchase.
Capital Markets and Market Efficiency
Stock exchange. Financial intermediaries. Efficient Market Hypothesis. Behavioural finance.
Risk Management
Role of treasury. Introduction to derivatives. Managing exchange rate risk.
Portfolio Theory and CAPM
Concepts of Portfolio Theory. Return and risk of two asset portfolio. Development of CAPM.
Personal Financial Management
Investments. Pensions. Insurance. Lending.
Formal lectures to gain an informed understanding of the underlying theory. Worked examples to ensure a high level of competency in the practical application of appropriate techniques. Class discussions to develop skills in critically evaluating theories and practice.
| Module Content & Assessment | |
|---|---|
| Assessment Breakdown | % |
| Formal Examination | 85 |
| Other Assessment(s) | 15 |