FINANCE 1 (FINC 311)

Introduction, Working Capital

1.  Define working Capital
2. Explain why working capital management. (CK1)
3. Explain the relationship between cash flow and working capital cycle. (CK1, CC2)

Introduction, Working Capital (continued)

4. Demonstrate the calculation of the working capital cycle. (CK2)

5. Outline the possible relationships between inventory levels and sales. (CK2)

6. Define and explain over-trading and over-capitalisation. (CK2)

Inventory Management and Control

1. Discuss the key considerations. (CK1)

2. Define and explain work-in-progress. (CK1)

3. Define economic order quantity. (CK1)

Inventory Management and Control (continued)

4. Apply the EOQ model (CK1)

Management of Accounts Payable, Cash and Cash Flows

1. Explain the role of accounts payable and receivable in the working capital cycle. (CK1)
2. Explain the need to monitor accounts payables (CK1)
3.  Explain accounts payables control operations and the importance of accounts payables management (CK1)

Management of Accounts Payable, Cash and Cash Flows (continued)

4. Describe the various type and form of accounts payables (CK1)

5. Describe the various accounts payable payment method and procedures (CK1)

6. Evaluate and demonstrate the issues involved with early payment and settlement discounts (CK1)

7. Identify the risks of taking increased credit and buying under extended credit terms (CK1)

Cash Budgeting and Forecasting

1. Define cash, cash flow and funds (CK2, CC2)

2. Explain the importance of cash flow management and its impact on liquidity and company surviva (CK2, CC2)

3. Outline the various sources and application of finance (CK2)

4. Distinguish between the cash flow patterns of different types of organisations(CK2, CC2)

Cash Budgeting and Forecasting (continued)

5. Explain the importance of cash flow for sustainable growth of such organisations (CK2, CC2)

6. Define cash accounting` and `accrual accounting` (CK2)

7. Reconcile cash flow to profit (CK2, CC2)

Cash Forecasting Techniques

1. Explain and illustrate statistical techniques used in forecasting cash flows(CK2, CC2)
2. Carry out simple sensitivity analysis on a cash budget or forecast.(CK2)

Cash Forecasting Techniques (continued)

3. Explain cleared funds forecasts (CK2)

Treasury Function and Managing Surplus Cash

1. Outline the main treasury functions (CK2)

2. Discuss the advantages and disadvantages of a centralised treasury function (CK2)

Treasury Function and Managing Surplus Cash (continued)

3. Describe cash handling procedure (CK2)

4. Describe the issues to be considered when attempting to hold optimal cash balances. (CK2)

5. Outline the statutory and the other regulations  relating to the management of cash. (CK2)

Treasury Function and Managing Surplus Cash (continued)

6. Outline how the Baumol cash management model works (CK2)

7. Discuss the limitations of Baumol cash management model. (CK2)

8. Suggest the appropriate liquidity levels for a range of different organisations (CK2)

Overview of Financial Markets (1)

1. Explain the role and functions of various types of banks (CK3)
2. Identity the major financial intermediaries(CK3)
3. Outline the general roles and key benefits of financial intermediaries.(CK3)

Overview of Financial Markets (1) (continued)

4. Outline the relationships between financialinstitutions.(CK3)

5. Explain the basic nature of a money market.(CK3) 

6. Describe the way in which a stock market.(CK3)

7. Discuss ways in which a company may obtain a stock market listing and the advantages and disadvantages of having a stock market listing. (CK3)

Overview of Financial Markets (2)

1. Explain the purpose and main features of Bank deposits, Certificate of deposit, Government stocks, Local authority bonds, Bills of exchange.(CK3)

Overview of Financial Markets (2) (continued)

2. Explain the purpose and main features of Equity, Preference shares, Secured loan note, Unsecured loan stock, Convertible and redeemable debt, Warrants.(CK3)

Money in the Economy

1. Define what is meant by “money supply” in an economic context.(CK3)
2. Outline how money supply may be controlled in an economy.(CK3)
3. Outline the basic relationship between the demand for money and interest rates.(CK3)

Money in the Economy (continued)

1. Explain briefly and illustrate the interaction between the inflation and interest rates.(CK3)
2. Discuss the possible consequences of inflation in an economy and its effect on organisations in general.(CK3)
3. Describe how the application of different monetary policies can affect the economy.(CK3)

Short-term Finance, Long-term Finance, Finance of SMEs 

1. Discuss situations where it maybe appropriate to raise short-term finance(CK3)
2. Describe the different forms of bank loans and overdrafts, their terms and conditions.(CK3)
3. Explain the legal relationship between bank and customer(CK3)
4. Explain the nature of trade credit and its use as a short-term source of finance.(CK3)

Short-term Finance, Long-term Finance, Finance of SMEs (continued)

5. Evaluate the risks associated with increasing the amount of short-term finance in organisation. (CK3)

6. Discuss the relative merits and limitations of short-term finance.(CK3)

7. Discuss situations where it may be appropriate to  raise medium-term finance (CK3)

8. Describe the main features of of hire purchase, and lease (CK3)

Short-term Finance, Long-term Finance, Finance of SMEs (continued)

9. Describe the key factors that should be considered in deciding the mix short/medium/long term finance in an organisation.(CK3)

10. Calculate relative gearing and earning per share under different financial structure(CK3)

11. Outline the requirements for finance of SMEs.(CK3)

12. Describe and discuss the response of government agencies and financial institutions to the SME financing problem.(CK3)

Relevant Costs, Capital Expenditure Budgeting, Investment Appraisal

1. Explain the differences between simple and compound interest.(CK3)

2. Calculate future values (CK3)

3. Discuss the concept of the time value of money and concept of discounting. (CK3)

4. Calculate present values, making use of present value tables to establish discount factors. (CK3)

Relevant Costs, Capital Expenditure Budgeting, Investment Appraisal (continued)

5. Discuss the concept of relevant cash flows for decision-making. (CK4)

6. Identity and evaluate relevant cash flows for individual investment decisions (CK4)

7. Discuss the importance of capital investment planning and control.(CK4)

8. Outline the issues to consider and the steps involved in the preparation of capital expenditure budget (CK4)

Relevant Costs, Capital Expenditure Budgeting, Investment Appraisal (continued)

9. Define and distinguish between capital and revenue expenditure. (CK4)

10. Compare and contrast investment in non-current assets and investment in working capital. (CK4)

11. Describe capital investment procedures.(CK4)

Relevant Costs, Capital Expenditure Budgeting, Investment Appraisal (continued)

12. Calculate the payback and discounted payback of a project and assess its usefulness as a method of investment appraisal. (CK4)

13. Calculate the accounting rate of return of a project and assess its usefulness as a method of investment appraisal (CK4)

14. Explain the concept of net present value and how it can be used for project appraisal.(CK4)

15. Calculate net present value and interpret the results. (CK4)

Relevant Costs, Capital Expenditure Budgeting, Investment Appraisal (continued)

16. Outline the concept of internal rate of return and how it can be used for project appraisal.(CK4)

17. Calculate internal rate of return and interpret the results.(CK4)

18. Discuss the relative merits of NPV and IRR, including mutually exclusive projects and multiple yields.(CK4)

19. Explain the superiority of DCF methods over payback and accounting rate of return.(CK4)

Managing Receivables, Assessing and Granting Credit

1. Explain the role of accounts receivable in the working capital cycle.(CK4)
2. Explain the key elements of a basic contract.(CK4)
3. Briefly outline specific terms and conditions that may be included in the contracts with credit customers.(CK4)
4. Explain the importance of credit management, including the level of trade credit, the role of the credit control function and the activities of the credit control function.(CK4)

Managing Receivables, Assessing and Granting Credit (continued)

5. Explain the need to establish a credit policy and outline the steps involved, including setting maximum credit amounts and period and total credit levels.(CK4)

6. Describe ways in which credit customers could be encouraged ,to pay promptly including effects of offering discounts.(CK4)

7. Identity the main data protection issues that should be considered when dealing with accounts receivable records.Credit scoring. (CK4)

Managing Receivables, Assessing and Granting Credit (continued)

1. Outline the various internal / external sources of information that may be used in assessing the creditworthiness of a customer. (CK4)
2. Identity possible reasons for rejecting an application for credit or extending credit. (CK4)

Assessing and Granting Credit, Monitoring and Collecting Debts

1. Describe how the financial statements of a customer can be used to assess the creditworthiness of a customer.(CK4)
2. Identity and apply the common benefit-cost ratios that may be used to analyse change of credit policy (CK4)

Assessing and Granting Credit, Monitoring and Collecting Debts (continued)

1. Describe the main external sources that may be used to monitor accounts receivables (CK4)
2. Explain the importance of credit management, including the level of trade credit, the role of the credit control (CK4)