Financial Management
A comprehensive Level 9 module exploring the strategic role of finance in business
decision-making, from financial statement analysis to mergers and acquisitions.
LEARNING OUTCOMES
What You'll Master
Analytical Skills Strategic Integration Statement Analysis
Apply qualitative and quantitative Appraise how finance interacts with other Analyse key information in company
techniques to analyse complex financial key business functions across the financial statements with precision and
management issues organisation insight
Project Evaluation Process Mastery Critical Assessment
Evaluate projects using multiple methods Critique financial management processes Consider key factors influencing financial
to determine shareholder value and demonstrate active participation decisions and critically assess supporting
contribution capability models
FOUNDATION
Introduction to Financial Management
Core Concepts Role of Finance
Understanding the role of finance and accounting begins with identifying key users of Strategic function in business
financial information and establishing the fundamental goals of financial
management.
Key Users
This foundation covers essential accounting concepts, the requirements and uses of
Stakeholders and decision-makers
accounting information, and critically examines its limitations in business decision-
making.
Information Quality
Requirements and limitations
Financial Statement Analysis
Master the art of interpreting core financial statements including the Statement of
Financial Position, Statement of Profit or Loss, and Cash Flow Statement.
Understanding their interrelationships is crucial for assessing company performance.
Annual Reports
Comprehensive analysis of report contents and structure,
understanding the relationship between accounting information, share
price, and company performance
Ratio Analysis
ROE, efficiency, liquidity, gearing, and profitability ratios for analysing
financial statements and making informed decisions
Regulations
Accounting standards governing legal, taxation, stock exchange, and
professional requirements
QUANTITATIVE METHODS
Project Evaluation Techniques
Time Value of Money 01
Understanding present value of future cashflows forms the foundation Payback Period
of investment appraisal. Quantitative methods guide critical
Time to recover initial investment
investment decisions through rigorous analysis.
02
Net Present Value
Value creation measurement
03
Internal Rate of Return
Project profitability indicator
04
Accounting Rate of Return
Average profit assessment
05
Profitability Index
Benefit-cost ratio analysis
06
Capital Rationing
Resource allocation optimisation
Planning, Control & Performance
Financial Planning
Translating strategy into financial plans through long-term and short-
term budgeting processes
Budget Process
Understanding the role and interrelationship of budgets, addressing
problems and establishing responsibility centres
Performance Measurement
Management accounting control systems, profit relevance, and
alternative non-financial indicators
Critical dependent factors and industry-based influences shape a firm's performance
measurement and management approach. Understanding these dynamics is
essential for effective financial control.
CASH FLOW MANAGEMENT
Working Capital Management
The Profit vs. Cashflow Distinction
Understanding the critical difference between profit and cashflow is fundamental to
effective working capital management. Sources and uses of cash must be carefully
monitored.
Debtors Management Creditors Management
Optimising accounts receivable collection and credit terms to Balancing payment obligations with cash availability and supplier
maintain healthy cash flow relationships
Inventory Control Cash & Credit Management
Managing stock levels to minimise holding costs whilst meeting Strategic oversight of liquidity and credit policies to ensure financial
operational demands stability
Capital Structure & Financing
Leverage Effects 1
The balance between debt and equity, implications for returns,
and impact on firm value and cost of capital
2 M&M Theory
Modigliani and Miller's theory of irrelevance of capital structure
in perfect markets
Dividend Policy 3
Do dividends matter? Market indicators, taxation implications,
and factors affecting policy
4 Sources of Finance
Short, medium, and long-term options, both internal and
external funding sources
Raising Capital 5
Issuing long-term debt, selling securities to the public, venture
capital, and IPOs
STRATEGIC GROWTH
Mergers & Acquisitions
Value Creation Through M&A
Estimating gains from mergers and acquisitions requires identifying
value in the acquisition and determining appropriate funding
approaches.
Understanding the mechanics of a merger, competition law
implications, and defensive tactics is essential for successful deal
execution.
Estimating Gains Identifying Value
Quantifying synergies and value creation potential from the Due diligence and valuation techniques to assess acquisition
combination targets
Funding Approaches Legal & Defensive Tactics
Cash, stock, or hybrid structures to finance the transaction Competition law compliance and strategies to protect shareholder
interests
Assessment & Resources
60% 40%
Coursework End of Module
Case study analysis requiring financial information analysis and Final assessment testing comprehensive understanding of financial
shareholder value maximisation decisions management principles
Recommended Reading
Corporate Finance by David Hillier & Stephen A. Ross (4th Ed.,
McGraw-Hill) provides comprehensive coverage of core concepts.
Additional essential texts include Atrill's Financial Management for
Decision Makers and Walsh's Key Management Ratios.
Supplementary resources include Brealey, Myers & Allen's Principles of Corporate Finance, Tse's Corporate Finance: The Basics, and Arnold &
Lewis's Corporate Financial Management.