BAM6062 - Financial Management

Objectives:

On successful completion of the module, students will be able to:

(1) prepare budgets, analyse variances from budget and evaluate budgetary systems;
(2) assess alternative overhead recovery systems;
(3) solve short-term operational and long-term investment decisions using a range of techniques;
(4) provide a comparative evaluation of the various sources of long and short-term sources of corporate finance;
(5) explain risk theory and apply reduction techniques in the modern corporate environment;
(6) explain and apply the theories underlying the pricing of financial securities and their relevance to investment, financial and dividend decisions;
(7) analyse financial statements in order to predict the likelihood of company viability;
(8) use a computer spreadsheet to prepare relevant financial statements.

Content:

Budget preparation using zero based, incremental and activity based techniques. Budgetary control using cost variance analysis. Evaluation of absorption costing and activity based costing systems. Relevant costs for decision making, limiting factors, make or buy, special orders and shutdown decisions. Investment appraisal and capital rationing techniques, payback, ARR, NPV, IRR and PI. Issuing new equity, offer for sale, rights, tender, and bonus issues. Issuing new debt, bank loans, debentures, bonds and convertible loan stock. The concept of risk and risk reduction, CAPM and portfolio theory. Cost of capital, DVM, CAPM, debt, taxation and WACC. Ratio analysis, creative accounting, reasons for company failure and the use of predictive models.

Learning and Teaching Information:

The module will be delivered via a series of weekly one-hour whole-group interactive lectures supported by weekly one-hour small group tutorial / workshop sessions. Questions / exercises will be set at each lecture meeting for students to complete before the associated small group session. Students will be provided with, and /or directed to, relevant reading and additional questions / exercises to support their progress through the module material.
br> Lecture
Contact hours 18
Number of groups 1

Tutorial/Workshop
Contact hours 18
Number of groups 5

Assessment:

001 Unseen paper 1 x 1.5 hours End of semester 50%
002 Unseen paper 1 x 1.5 hours (end of sem 2) 50%


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