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-profit organisations.Financial strategy and the role of the financial manager.Corporate Governance..Corporate social responsibility towards shareholders and society.The Financial Management Framework.Current developments in areas of business and finance relevant to this module.
Interpretation of accounts:
The financial statements and their role as providers of information for investors.Operating performance.The importance of cash flows.Users of financial statements.Solvency-liquidity ratios.Debt management ratios- gearing/leverage ratios.Asset management ratios or efficiency ratios.Profitability ratios including Stock Market ratios.Trend analysis.Horizontal analysis and Common Size Statements.International accounting practice.Limitations of ratio analysis.Other factors affecting financial performance and position and share values. Annual Reports of listed companies.
Working capital:
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 credit customer.The stages in the debt collection process.Analysis of aged debtors/receivables.Remedies for bad debts .The management 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 of share 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 debt factoring.Bills of exchange and acceptance credits.Other sources of bank finance and internal sources of finance.Factors influencing choice of financing methods.The effect of financing decisions on risk, income and control.Finance and the small business. Financial planning. The Business Plan.Government sources: grants, regional and national aid schemes and tax incentives.Nature and role of Venture Capital. Cash flow projections for establishing financing requirements.Using excel for financial projections.
Dividend Policy
Relationship between dividend policy and the financing and investment decision. Dividend payment sequence.Dividend policy debate. dividend theories.Practical issues affecting dividend policy.Dividend policies of listed companies.
| Module Content & Assessment | |
|---|---|
| Assessment Breakdown | % |
| Other Assessment(s) | 30 |
| Formal Examination | 70 |