Course description

Programme Outline

Upon completion of this course, participants will be able to:

1. Business Valuation

·       Describe what determines the value of an organization's shares and how management can influence these values.

·       Apply various methods to value a business.

·       Describe the efficient market hypothesis.

·       State how the efficient market hypothesis affects the valuation of an organization's share holdings

2. Working Capital Management

·       Analyse financial ratios in relation to working capital to draw conclusions about an organisation's financial health.

·       Produce cash flow forecasts for an organisation and explain the implications they have for funding.

·       Construct cash management policies using the Baumol model of cash management.

3. Cost of Capital

·       Calculate the cost of each component of the Cost of Capital including Cost of Debt, Cost of Preference Shares and Cost of Equity.

·       Explain how Capital Asset Pricing Model and Dividend Growth Model are used to calculate Cost of Equity.

·       Calculate the Weighted Average Cost of Capital which will be used for appraising projects and valuing companies.

4. Investment Appraisal ( Part 1 )

·       Describe the nature of investment decisions and the appraisal process.

·       Calculate relevant cashflows for inclusion in investment appraisal calculations.

·       Perform and interpret investment appraisal calculations using:

o   Net present value or NPV (including taxation and inflation)

o   Accounting rate of return (ARR)

o   Payback Period

5. Investment Appraisal ( Part 2)

·       Calculate an optimal investment plan when faced with capital constraints at a point in time, for both divisible (using the profitability index) and indivisible projects.

·       Calculate the optimal replacement cycle for an asset using net present value and equivalent annual cost.

·       Perform and interpret investment appraisal calculations using:

o   Internal rate of return

6. Risk Management

·       Describe the nature of risk and uncertainty.

·       Justify the necessity of risk taking as part of managing an organisation.

·       Explain the dynamic nature of risk assessment.

·       Explain risk appetite and how this affects risk policy.

·       Describe management's responsibilities in relation to risk management.

·       Recommend a process for formal risk management.

·       Explain different types of Foreign currency risk.

·       Apply external hedging techniques used for foreign currency risk.

Target Audience

This course is suitable for individuals seeking foundational knowledge in Financial Management