Republic Polytechnic Continuing Education & Training Course Structure for : Finance Management Module Finance Management Description Finance Management is a module that serves to cover key financial aspects of a business as to provide the managers & staff the basis of making well informed decisions in their management and control functions. This module will introduce the learners to fundamental concepts of Financial Accounting, Cost Accounting and Finance. Participants will have an overview of key financial accounting concepts, understand the several financial concepts for better decision-making (eg capital budgeting, cost-volume-profit analysis, financial analysis using. Topics covered include Introduction to Financial Accounting and Financial Statements, underlying accounting concepts, time value of money, financial analysis, capital budgeting, cost-volume-profit analysis, and budgeting. Lesson Topics Competency-Based Learning Objectives Lesson Plan Assessment (%) 1 Introduction to Financial Accounting and Financial Statements Explain the objectives of accounting. Describe the financial statements (Statement of Financial Position, Statement of Comprehensive Income, Statement of Cash Flows and Statement of Changes in Equity). Describe the users of financial statements and their informational needs. Describe the limitations of financial statements.
Distinguish the qualitative aspects of financial statements that make it useful, such as relevance, comparable, understandable, reliability and consistency. 2 Underlying accounting Conventions Describe the four basic assumptions behind the preparation of the financial statements: Economic entity assumption Going concern assumption Periodicity assumption Monetary unit assumption Describe the four broad accounting principles that guide accounting practice: Historical cost principle Realization principle Matching principle Full-disclosure principle Prepare the Statement of Comprehensive Income and Statement of Financial Position according to the format required by FRS 1. 3 Statement of Cash flow Understand the primary purpose of the Statement of Cash Flows Illustrate the importance and usefulness of cash flow information. Differentiate between the operating, investing and financing activities. Preparing a simple Statement of Cash Flow.
4 Time Value of money Explain Time value of money (TVM). Explain and compute present / future value of cash flow. Explain discounting Application of TVM to financial decisionmaking and investment decisions. Assess how TVM affect the timing of the cash flows. 5 Capital Budgeting Explain capital budgeting. Evaluate how an entity assesses an investment project. Explain the various criteria of an investment appraisal. Evaluate the use of the various appraisal methods, i.e. NPV / IRR / Payback period / Profitability index. Describe the practical problems faced. 6 Financial analysis Liquidity & profitability ratio Introduction to Financial analysis using Introduction to the 4 main types of ratio comparisons. Explain and compute the first 2 groups of ratio (out of 4 major groups of financial ): i. Liquidity ratio current ratio, quick ratio ii. Profitability ratio gross profit margin, net profit margin, return on equity
To include interpretation of the financial 7 Financial analysis Leverage & Asset management ratio Explain and compute the other 2 groups of ratio (out of 4 major groups of financial ): i. Leverage ratio debt equity ratio, debt ratio, Equity Multiplier (= Total Assets / Total Equity); ii. Asset management ratio Total Assets Turnover, Receivable Turnover, Average Collection Period, Inventory Turnover, Days Sales in Inventory To include interpretation of the financial Explain the limitations to ratio analysis 8 Cost-volume-profit Analysis Introduction to types of costs (ie fixed, variable, overhead costs); To describe and illustrate the use of break-even charts in cost-volume Comprehend the assumptions behind cost-volume-profit analyses. Use the contribution margin ratio and the equation method to conduct costvolume-profit To comprehend and explain the importance of contribution margin. Identify the limitations of cost-volumeprofit
9 Basics of Budgeting Describe the purpose and importance of budgeting Describe the process involved in budgeting Comprehend the advantages and disadvantages of budgeting Identify the difference between a fixed budget and flexible budget Comprehend the limitations of budgets 10 Master Budget Explain the major structure of a master budget. List down the principal steps in preparing a master budget. Prepare a simple master budget. Additional Comment on Assessment: For this module, the final module grade will be made of the following components: 1. Examination (40%) There will be a test at the end of the module and this will take up 40% of the grades for that module. 2. Assignment (40%) There will be 2 assignments, each to be due at the end of week 5 and 10 respectively. These assignments will be done on individual basis and will form 40% of the grades for that module. 3. Tutorial / Quiz (20%) Each session there will be tutorial to be completed and submitted by the participants. These will form 20% of the grades for that module.