Aim
To
develop knowledge and understanding of financial
management methods for analysing the benefits
of various sources of finance and capital investment
opportunities and of the application of management
accounting techniques for business planning
and control.
Objectives
On
completion of this paper candidates should be
able to:
-
explain the role and purpose of financial
management
-
evaluate the overall management of working
capital
-
evaluate appropriate sources of finance
for particular situations
-
appraise capital investment through the
use of appropriate methods
-
identify and implement appropriate costing
methods
-
prepare budgets and use them to control
and evaluate organisational performance
and
-
demonstrate the skills expected in Part
2.
Content
Financial Management (60%)
Financial
management objectives nature and purpose
of financial management; nature, scope and form
of financial objectives, relationship with organisational
strategy; roles, responsibilities and relationships
of key personnel.
Management
of working capital nature, scope and importance,
managing cash balances, management of debtors,
creditors and stock.
Sources
of finance capital markets, significance
of corporate markets, efficient market hypothesis,
dividend policy, bank finance, trade credit,
government sources, introduction to overseas
capital, determining finance requirements, determining
appropriate sources of finance.
Capital
expenditure and investment identifying investment
opportunities, appraising capital investments
- ROCE, payback, discounting based methods,
capital rationing, lease or buy, effects of
taxation and inflation.
Management
Accounting (40%)
Costing
systems Costing concepts, methods and techniques
including activity based costing, marginal and
absorption costing, target costing, life-cycle
costing, implications of use.
Standard
costing and variance analysis calculation
of variances, uses and limitations, determination
of standards, variance investigation, planning
and operational variances, behavioural implications.
Budgeting
and budgetary control objectives, budgetary
systems - fixed and flexible, zero-based, incremental,
periodic, continuous, activity based, budget
development processes, co-ordination of sub-budgets,
principal budget, budget review, use of computer
based models, capacity variations, flexible
budgets, calculating and analysing variances,
budgets and employee motivation.
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