IB903-10 Accounting and Financial Management
Introductory description
This module introduces the key management area of accounting and finance. The intention of this module is not to try to turn students into accounting or finance professionals, but to enable them to enter into intelligent discussion with the professionals and to be able to get the big picture rather than get lost in the detail. It is inevitable that there will be some calculations but there is also a heavy emphasis on intuition around the numbers and the context in which they are set. The assessment will strike a balance between calculation, interpretation and discussion.
Module aims
The objectives for this module are to enable students to:
(1) Understand the meaning of the key financial statements: profit and loss account, balance sheet and cash flow statement.
(2) Interpret the key financial statements in order to assist decision making.
(3) Appreciate the importance of cash flow management.
(4) Appreciate the sources of finance available for a company and the role and importance of shareholders.
(5) Understand the basic trade-off between risk and return.
(6) Understand the estimation of cost of capital.
(7) Understand the discounted cash flow analysis for valuation of companies and projects.
An underlying objective behind all of the above is that students should be able to have better conversations with the financial personnel in their organisations – to ask better questions and to understand the answers (and perhaps have an inkling of when they should not be satisfied with the answer).
Outline syllabus
This is an indicative module outline only to give an indication of the sort of topics that may be covered. Actual sessions held may differ.
Measuring performance – a background to accounting
Reporting performance
Cash: the accounting number that matters!
Capital investment decisions
Choices, judgements and creativity: facts, fiction or faction?
Analysing financial statements (1)
Analysing financial statements (2)
Shareholders and value
Time value of money and discounting
Risk and return, diversification and beta
Cost of capital
Learning outcomes
By the end of the module, students should be able to:
- Describe the role of accounting in providing economic information (financial and non-financial) to users.
- Understand the use of accounting information in the context of management decision making and for the purpose of external publication.
- Develop and demonstrate analytical, and problem solving skills
Indicative reading list
Core text:
Rice, A., 2015, Accounts Demystified: The Astonishing Simple Guide to Accounting (7th edn), Pearson
Brealey R.A., Myers S.C. & Marcus A.J. (2019) Fundamentals of Corporate Finance (10th edn), McGraw-Hill
Atrill, McLaney (2019) Accounting and Finance for Non Specialists (11th edn)
Supplementary texts:
K. Palepu, P. Healy, V. Bernard and E. Peek, Business Analysis and Valuation: Using Financial Statements, CENGAGE (Fourth IFRS edition, 2016).
Sample additional reading:
Bryer, R. (2006) The Regulation of Financial Accounting: An Introduction, Working paper, Warwick Business School
Dugdale, D. (1991) Is There a ‘Correct’ Method of Investment Appraisal?, Management Accounting, May, pp. 46–9
Moon, P. and Bates, K. (1993) Core Analysis in Strategic Performance Appraisal, Management Accounting Research, 4, 2, pp. 139–52
Subject specific skills
Assess the nature of accounting information and be able to describe the relationships between different types of financial statements and behavioural consequences of accounting decisions.
Apply the CAPM model to estimate the cost of capital
Prepare and present professional reports to recommend courses of action.
Transferable skills
Develop and demonstrate written communication skills.
Study time
| Type | Required |
|---|---|
| Lectures | 10 sessions of 3 hours (52%) |
| Private study | 28 hours (48%) |
| Total | 58 hours |
Private study description
Private Study and preparation for lectures
Costs
No further costs have been identified for this module.
You do not need to pass all assessment components to pass the module.
Assessment group A1
| Weighting | Study time | Eligible for self-certification | |
|---|---|---|---|
Assessment component |
|||
| Individual Assignment (10 CATS) | 100% | 46 hours | Yes (extension) |
Reassessment component is the same |
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Feedback on assessment
Assessments are graded using standard University Postgraduate Marking Criteria and written feedback is provided. Feedback for individual essays includes comments on a marksheet.
Post-requisite modules
If you pass this module, you can take:
- IB810-10 Corporate Finance
- IB9QF-10 The Psychology of Investing and Financial Decision Making
- IB9QG-10 Corporate Finance
Courses
This module is Core for:
- Year 1 of TIBS-N1P2 Postgraduate Taught Business Administration