CA3.6 – Advanced Financial Management
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Course Features
Course Details
CA3.6-Advanced Financial Management
On completion of this module, candidates will reach a competency sufficient to be able to:- Formulate financial strategies
- Evaluate investment opportunities
- Recommend appropriate financial risk strategies
- Evaluate global financial markets and the role of multinational businesses
Syllabus topics | Weighting (%) | LO |
Financial strategies | 20 | 1 and 2 |
Investments | 35 | 3 |
Financial risk strategies | 35 | 4 and 5 |
Global financial markets and the role of multinational businesses | 10 | 6 |
Learning outcomes
- LO1: Evaluate the issues involved in the formulation of an organisation’s financial strategies
- LO2: Evaluate the various financing options available to an organisation and recommend the most appropriate strategy based on the organisation’s objectives
- LO3: Evaluate the various types of investment opportunities that may be available to an organisation, using appropriate techniques and considering the major issues that may arise
- LO4: Assess the role of the treasury management function within an organisation
- LO5: Evaluate the extent to which an organisation is exposed to foreign exchange and interest rate risks and recommend appropriate strategies to manage these risks
- LO6: Evaluate the impact of, and how to manage, global issues, including the management of international trade and the development of strategic financial plans
- Financial strategies: LO1, 2
- Determine and explain financial strategy objectives, including the role of Islamic finance, taking account of the constraints on various elements of financial strategy
- Evaluate the available financing options, including:
- Short, medium and long term alternatives
- Issues of new capital
- Gearing and capital structure
- Dividend policy
- Working capital management
- Explain stakeholder interests and their effect on financial strategy formulation and propose resolutions to stakeholder conflicts
- Identify ethical problems in financial strategy and propose appropriate resolutions
- Evaluate financial strategies in terms of the financial and strategic objectives of the organisation
- Forecast financing requirements for both short and long term financing requirements
- Evaluate alternative methods of financing, incorporating the impact of the tax, and select an appropriate financial plan
- Prepare a financial plan and evaluate the impact of uncertainty on the plan
- Investments: LO3
- Evaluate investment proposals in terms of value added for shareholders of a project using discounted cash flow techniques, taking account of taxation and inflation
- Evaluate the role and impact of risk in investment appraisal
- Evaluate cost of capital techniques including the cost of equity, debt, preference shares, bank finance, the weighted average cost of capital, convertibles and public sector discount rates
- Calculate bond prices and cost of debt using net present values
- Recommend an investment decision taking account of non-financial factors such as corporate social responsibility, sustainability, and ethical practice
- Prepare business valuations for mergers, acquisitions, management buyouts and business divestments and recommend an appropriate decision, paying particular attention to the following valuation techniques:
- Dividend yield based valuation techniques
- Price earnings ratio based valuation techniques
- Discounted cash flow based valuation techniques
- Asset based and net asset based measures of value
- Value based management
- Shareholder value analysis
- Short and long term growth rates and terminal values
- Economic profit methods
- Cash flow return on investment
- Total shareholder return
- Market value added
- Explain the limitations of investment appraisal analysis for a given business scenario
- Financial risk strategies: LO4, 5
- Explain the role of treasury function
- Explain the role of money markets
- Explain the financial risks of a business based on a given scenario, data and information
- Explain how financial instruments such as hedging and derivative products may be used to manage risks and explain the nature of such products
- Evaluate the alternative approaches to managing interest rate exposure based on a given scenario, data and information, calculating the costs of different hedging arrangements
- Evaluate the alternative approaches to managing currency rate exposure based on a given scenario, data and information calculating the costs of different hedging arrangements
- Global issues and the multinational company: LO6
- Describe the emerging issues in the global financial markets
- Describe developments in international trade and finance
- Explain the key elements of the management of international trade and finance
- Evaluate the impact of different circumstances underpinning the development of strategic financial plans for multinationals.
This course does not have any sections.