Corporate finance- finance management

This syllabus is designed to help with planning study and to provide detailed information on what could be assessed in any examination session.

AIM

To develop the knowledge and skills expected of a finance manager, in relation to investment, financing, and dividend policy decisions.

DETAILED SYLLABUS

A Financial management function

1. The nature and purpose of financial management

2. Financial objectives and relationship with corporate strategy

3. Stakeholders and impact on corporate objectives

4. Financial and other objectives in not-for-profit organisations

B Financial management environment

1. The economic environment for business

2. The nature and role of financial markets and institutions

3. The nature and role of money market

C Working capital management

1. The nature, elements and importance of working capital

2. Management of inventories, accounts receivable, accounts payable and cash

3. Determining working capital needs and funding strategies

D Investment appraisal

1. Investment appraisal techniques

2. Allowing for inflation and taxation in investment appraisal

3. Adjusting for risk and uncertainty in investment appraisal

4. Specific investment decisions (lease or buy; asset replacement, capital rationing)

E Business finance

1. Sources of, and raising business finance

2. Estimating the cost of capital

3. Sources of finance and their relative costs

4. Capital structure theories and practical considerations

5. Finance for small- and medium-sized entities

F Business valuations

1. Nature and purpose of the valuation of business and financial assets

2. Models for the valuation of shares

3. The valuation of debt and other financial assets

4. Efficient market hypothesis (EMH) and practical considerations in the valuation of

shares

G Risk management

1. The nature and types of risk and approaches to risk management

2. Causes of exchange rate differences and interest rate fluctuations

3. Hedging techniques for foreign currency risk

4. Hedging techniques for interest rate risk

I Financial statements analysis in unstable times

1.Financial statements structure – problems with their utilization in conditions of instability

2. Financial ratios – problems with their utilization in conditions of instability

1/ M. Bojańczyk, Corporate finance in the unstable word, Vistula, Warszawa 2015

2/ M. Bojańczyk, Managers and the owners on capital market, crisis in company management, SGH, Warszawa 2010.

3/ Others books and articles regarding Corporate Finance and Financial Management

MAIN CAPABILITIES

On successful completion of this paper candidates should be able to:

A Discuss the role and purpose of the financial management function

B Assess and discuss the impact of the economic environment on financial

management

C Discuss and apply working capital management techniques

D Carry out effective investment appraisal

E Identify and evaluate alternative sources of business finance

F Discuss and apply principles of business and asset valuations

G Explain and apply risk management techniques in business

I Discus and explain the structure and role of financial statements and financial ratios in the financial management of the company in unstable times

APPROACH TO EXAMINING THE SYLLABUS

The syllabus is assessed by a three-hour paper-based examination.

All questions are compulsory. It will contain both computational and discursive elements.

Some questions will adopt a scenario/case study approach.

Section A of the exam comprises 20 multiple choice questions of 2 marks each.

Section B of the exam comprises four 15 mark questions. 8