Financial Management (FMF)

Course outline

• The nature and purpose of financial management, and how the objectives relate to an entity's corporate strategy, both financially and non-financially, in different types of organisations. For each type of business, outline the economic environment faced by the business and consider the role of financial markets and institutions. 
• The importance of working capital management and describe the different management approaches relating to inventory, accounts receivable, accounts payable, and cash appropriate to the business entity, for working capital needs and funding strategies. 
• Identify the purpose of investment appraisal, and apply the non-discounted and discounted cash flow techniques, adjusting for the effects of risk and uncertainty. Effects of inflation and taxation are also considered under the discounted cash flow techiques, as appropriate. 
• Describe the different sources of short and long term finance that are appropriate and available to different business entities, in different industries and size, including small and medium sized entities. Consider the implications of an existing or proposed finance structure on gearing, cost of capital (debt and equity), and the capital structure. Consider the impact of the cost of capital in investment appraisal.  
• Identify the different types of risk that may be contained within a defined business environment and apply appropriate monitoring and mitigation strategies. 
• Describe and apply the different business valuation models available to value an organisation with debt and/or equity. Outline the efficient market hypothesis and state how this affects the valuation of shares.