This module will further develop knowledge of financial management by taking a pragmatic approach to the application of concepts and theory to business finance issues. Participant’s knowledge of practical business finance issues and how to address these will be built through an integrated and applied approach including case based learning. The aim of the course is to help students to understand the interface between a company and the financial markets and the influence of the latter on management’s decisions about investment, financing and dividends.
Context of Financial Management
Introduction to organisations and their management. The nature, scope and form of financial and non-financial objectives. Corporate governance and agency theory including ethical issues.
Financial Performance
The relationship between financial management, management accounting and financial accounting. Financial Statement and Investor Analysis.
Management of Working Capital
Traditional and modern approaches to financing working capital. Cash conversion cycle The role and the operation of the treasury function and working capital ratios. The management and control of cash: cash forecasts; cash management models.
Investment Appraisal
Payback, Discounted Payback, Net Present Value, Internal Rate of Return and accounting rate of return.
Project appraisal under risk: probabilities; sensitivity analysis; simulation. Capital rationing. Effects of inflation and taxation.
Financial Markets
The nature and function of the money and the capital markets and the role of bank finance. T
he Efficient Markets Hypothesis and its relevance to decision-making and to financial management practice.
Sources of Short-Term Finance
The principles of investing short-term and types of investment.
The distinction between the coupon on debt and the yield to maturity.
Types of borrowing and the effect of short-term debt on gearing.
Sources of Long-Term Finance
Debt finance and Equity finance.
The concept of gearing: gearing ratios; the links between financial gearing and operating gearing.
The concept of financial risk and return. Interest rate arithmetic and the yield curve.
Weighted average cost of capital.
Portfolio Theory
Relationship between risk, uncertainty and reward. Risk Measurement. Concepts of diversifiable risk and systematic risk. CAPM.
Mergers and Takeovers, Key stakeholders, the market for corporate control. Link with Equity Valuation.
Personal Finance
Financial management process including regulatory guidelines. Personal investment within a risk return framework. Financial products and services. Fund Management and links with Portfolio Theory.
Introduction to the academic financial literature.
Lectures based approach using written material, textbooks, research articles and various media sources including using web-based data sources. This will be supported by tutorials and lab work using up to date software.
Formative project based work will contribute to the development of technical and communication skills and will focus on the key concepts and principles of business finance.
| Module Content & Assessment | |
|---|---|
| Assessment Breakdown | % |
| Formal Examination | 70 |
| Other Assessment(s) | 30 |