Short Title:Financial Management 2
Full Title:Financial Management 2
Module Code:FNCE H3004
 
NFQ Level:7
 
ECTS Credits:5
Reviewed By:MARTIN NOLAN
Description:This module aims to develop the student’s understanding of financial management principles and techniques relevant to the financing and investment decisions within an organisation. It aims to provide students with knowledge and skills that can be used to value companies and to conduct financial planning in a range of business sectors.
Learning Outcomes:
On successful completion of this module the learner will be able to
  1. Demonstrate an understanding of the concept of the time value of money and bond valuation and their effect on investment decisions
  2. Calculate a range of company valuations using appropriate models and techniques that will incorporate the critical success factors distinguishing high performance organisations from others
  3. Understand the importance of dividend policy and the cost of capital and their effect on the dividend and financing decision respectively
  4. Use suitable analytical tools for the purpose of research into the appraisal of capital investment projects in a variety of business and management contexts
  5. Apply the techniques of financial forecasting for company-wide planning purposes using both quantitative and qualitative sources of information
  6. Understand foreign exchange risk and techniques to manage such risk
 

Module Content & Assessment

Content (The percentage workload breakdown is inidcative and subject to change)
  • The time value of money: (5%)
    Simple interest Compound interest Discounting and present value Nominal and effective rate of interest Fixed versus variable rates of interest Continuous streams of payment
  • Bond valuations: (5%)
    Features of a bond Fixed coupon and fixed redemption date bond Bond yields Pricing a bond Deriving the gross and net redemption yield Calculating the gross and net income yield
  • Share and company valuations: (20%)
    Share value and cash flow Zero growth Constant growth stocks Non-constant or supernormal growth Price earnings method Valuation using the balance sheet Valuation using free cash flow
  • The cost of capital and capital structure: (20%)
    Cost of different sources of finance The Financing Decision Equity Debt Weighted average cost of capital The importance of choice in Capital structure Theories on gearing The traditional approach to capital structure Modigliani and Miller – The effect of Capital structure Pecking order theory Practical factors affecting capital structure
  • Dividend policy: (10%)
    Dividend payment sequence The dividend policy debate Resolutions to the dividend controversy Dividends as a residual of profit Dividend stability Factors affecting dividend policy
  • Investment appraisal: (20%)
    Evaluation of long-term investment opportunities through the use of Net present value Internal rate of return Accounting rate of return Payback period (including discounted payback) Profitability index and capital rationing Relevant and irrelevant costs Inflation and investment appraisal Taxation and investment appraisal Risk and uncertainty in project appraisal Sensitivity analysis Qualitative factors Mutually exclusive and unequal life projects Lease or buy decisions
  • Long term financial planning: (15%)
    Financial forecasting Forecast pro- forma financial statements Additional financial needs Lumpy assets Maximum internal growth rates Maximum sustainable growth rates Accounting based management Economic value added
  • Foreign Exchange Risk: (5%)
    Exchange rates Risk and foreign exchange Managing foreign exchange exposure Forward exchange contracts Hedging using the money markets
Assessment Breakdown%
Course Work30%
End of Semester Formal Examination70%
 Outcome addressed% of totalAssessment Date
Formal End-of-Semester ExaminationNone70%Semester End
Coursework Breakdown
TypeDescriptionOutcome addressed% of totalAssessment Date
Continuous AssessmentThe continuous assessment will take the form of a group/individual research project (incorporating qualitative and quantitative research, report writing skills, and referencing skills). This may include a presentation based on a group research project, where students will be given a group and individual mark.30n/a

IT Tallaght reserves the right to alter the nature and timings of assessment

 

Module Workload & Resources

This course has no full time workload.
Resources
Required Book Resources
  • Denzil Watson and Anthony Head, Corporate Finance Principles & Practice, Latest Ed., FT Prentice Hall
Recommended Book Resources
  • Power, T., Walsh S., O’ Meara P, Financial Management: an Irish Text, Latest Ed., Gill & McMillan ACCA
  • Diploma in Financial Management, Financial Strategy and Risk Management, BPP Professional Education Publications.
  • Samuels, J.M., Wilkes, F.M., Brayshaw, R.E, Management of Company Finance,, Latest Ed., Chapman & Hall.
  • Weston, J.F., Copeland, T.E, Managerial Finance, Latest Ed., Cassell
  • Brett, M, How to Read the Financial Pages, Latest Ed., Random House Business Books
  • Pinches, G.E, Essentials of Financial Management,, Latest Ed., Harper Collins
Required Article/Paper Resources
  • Journals, Magazines, Newspapers and Electronic Sources of information on issues relevant to Financial Management. n/a