• FNCE2003
  • Business Finance 2

  • Credits (ECTS): 10
  • Accounting and Finance
  • Available on Programme(s): DT366

Modules are delivered
as part of a programme.
To apply for the
programme,
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Module Description

To provide a foundation in financial management for general business management by taking a pragmatic approach to the application of concepts and theory to general 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 operational matters.

Module Aims

The aim of this module 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 operational matters. Also, to provide the student with a reliable foundation in the area of financial management.

Indicative Syllabus

Financial Management: Framework -The nature and function of the money and the capital markets emphasising the role of bank finance. -The significance of corporate securities to commercial organisations and the markets in which they operate. -The Efficient Markets Hypothesis and its relevance to decision-making and to financial management practice.
Financial Management: Objectives -The nature, purpose and scope of financial management -The relationship between financial management, management accounting and financial accounting. -The key decisions of financial management: investment; financing and dividend policy. -The nature, scope and form of financial objectives of different types of organisation. -The relationship of financial objectives to organisational strategy and ethos and to other organisational objectives.
Investment Appraisal -Identifying potential investment opportunities -Methods: -Payback and accounting rate of return. -Advantages and disadvantages of each method. -DCF: NPV and IRR. -Conflicts in using DCF for capital budgeting and accrual accounting for performance appraisal. -Replacement Theory: LCM, finite time horizon and EAC -Project appraisal under risk: probabilities; sensitivity analysis; simulation. -Capital rationing including multi-period. -Leasing decisions. -Effects of inflation and taxation.
Management -Introduction to organisations and their management. -The roles, responsibilities and relationships of key personnel involved in and with organisations (shareholders, lenders, managers, employees, customers, suppliers and government). -Corporate governance and agency theory including ethical issues.
Management of Working Capital -Traditional and modern approaches to financing working capital. -The role and the operation of the treasury function and working capital ratios. -The link between corporate survival and effective working capital management. -The management and control of cash: cash forecasts; cash management models. -The management and control of debtors and creditors. -The financing and control of stocks.
Personal Finance -Financial management process including regulatory guidelines. -Personal investment within a risk return framework. -Financial products and services.
Sources of Long-Term Finance -Equity finance including venture capital. -Long-term debt finance. -The concept of gearing: gearing ratios; the links between financial gearing and operating gearing. -The concept of financial risks. -Financial Statement and Investor Analysis. -Calculation of cost of equity using CAPM and the dividend growth model. -Cost of redeemable and irredeemable debt. -Weighted average cost of capital. -Relationship between risk, uncertainty and reward. -Concepts of diversifiable risk and systematic risk.
Sources of Short-Term Finance -Interest rate arithmetic and the yield curve. -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. -Trade creditors as a source of finance. -The lender's assessment of creditworthiness.

ISCED:345: DO NOT USE - ARCHIVE HEA 2014
Total Contact Teaching Hours:78
Class Size:60

Please note that the catalogue is provided as a guide to modules in DIT. Not all modules listed will necessarily be offered every year and new modules may also be added. Information subject to change. For detail on specific programmes/modules please contact the relevant School directly.