Year
2020
Units
4.5
Contact
1 x 1-hour lecture weekly
1 x 2-hour tutorial weekly
Prerequisites
^ = may be enrolled concurrently
1 BUSN1001 - Accounting Principles
1a BUSN1011 - Accounting For Managers
2 ^ BUSN1009 - Quantitative Methods
3 BUSN1015 - Foundations of Finance
Must Satisfy: ((1 or 1a) and 2 and 3)
Enrolment not permitted
BUSN2007 has been successfully completed
Assumed knowledge
Students are assumed to have an elementary knowledge of economics, financial accounting statements and quantitative methods. One of BUSN1013 Economics for Business or BUSN1007 Introductory Microeconomics would be useful.
Course context
Bachelor of Business; Bachelor of Commerce
Topic description
This topic introduces students to the major concepts and analytical tools used in the theory and practice of financial management. The topic will cover the role and objectives of financial management, business financial planning and ratio analysis, working capital management, risk and return, capital budgeting, the capital market, sources of finance, the cost of capital, operating and financial leverage and the financial structure decision.
Educational aims
This topic aims to:
  • identify the major concepts and analytical tools used in the theory and practice of financial management
  • explore the role and objectives of financial management and business financial planning
  • explain and define ratio analysis, working capital management, risk and return, capital budgeting, the capital market, sources of finance, the cost of capital, operating and financial leverage and the financial structure decision.
Expected learning outcomes
Upon successful completion of this topic students will be able to:
  1. Distinguish the financial objectives governing an organisation's decisions
  2. Perform financial statements analysis
  3. Forecast future cash flow needs and prepare budgets and pro forma financial statements
  4. Explain the factors influencing the appropriate level of working capital and how to manage cash and marketable securities, accounts receivable and payables
  5. Describe the relationship between risk and return, diversifiable and non-diversifiable risk, and their impact on asset pricing
  6. Explain the importance, role and techniques of capital budgeting
  7. Value long-term debt, preference shares and ordinary shares, and determine the cost of capital
  8. Define and calculate operating, financial and total leverage, and explain the implications for the target capital structure.