This module aims to develop the skills of students in order to enable them to apply their theoretical and practical knowledge of finance to solving Advertising and Marketing problems, and contribute to advertising decision making. It aims to provide students with transferable analytical skills that can be applied in various marketing and business scenarios.
Financial Management Framework and the Role of the Capital Markets
The nature and scope of finance in the advertising business. The nature and scope of financial objectives for commercial organisations, with particular emphasis on the marketing communications industry; The role of capital and money markets including the importance of agency theory and costs..
Financial Statement Interpretation and Analysis
Evaluation of Annual Reports: Financial report overview, concepts and terminology; analysis and interpretation of Income Statements, Balance Sheets and other information provided in the Annual Report. The uses and limitations of ratio analysis for the assessment of organisational performance and position.
Budgeting, Cash Management and CVP
Measurement and accountability: Budgeting (the purpose of budgets, mark-ups and margins); Advertising and Marketing Communications as an investment – cost per action/acquisition (CPA); key performance indicators (KPI); Budget creation with focus on cash budget. Cost volume profit analysis.
Capital Investment Appraisal and Pricing Decisions
Investment appraisal: Evaluation of advertising as a long-term investment opportunity through the use of: Net present value; Internal rate of return; Accounting rate of return; Payback period; The basic principles of pricing including: cost-plus; value pricing; price sensitivity; and price customization/discrimination. Pricing techniques for marketing /advertising campaigns and projects including: retainer or value pricing or hourly rate cards. Policies of applying these techniques to the client and third parties.
Sources of Finance
The sources of short, medium and long term finance: Share Capital - equity and preference; Loan capital; Leasing (including sale and leaseback) and hire purchase; Invoice discounting and debt factoring; Other sources of external and internal finance. Factors influencing choice of financing methods; The effect of the financing decisions on risk, income and control. Finance and the SME sector.
| Module Content & Assessment | |
|---|---|
| Assessment Breakdown | % |
| Other Assessment(s) | 30 |
| Formal Examination | 70 |