module specification

The module will enable students to develop skills in the interpretation and financial statement analysis to enhance decision making process.

The course provides an understanding of how the value of businesses is captured in financial statements. It focuses on fundamental accounting concepts, principles and techniques in relation to financial statements analysis.

The module will also explore management accounting techniques and examines their use in management decision making. 

Finally, the module will link financial statement analysis to corporate financial strategy using different cases to illuminate understanding.

The module aims to enable students:

1. To identify and evaluate the techniques used in both internal and external financial reporting:
2. To interpret accounting statements and reports, and use the information for decision making in both the short and long terms;
3. To provide an understanding of economic tools and their applications to inform financial data.
4. To develop knowledge and critical understanding of the theoretical models, analytical methods and practical aspects of corporate financial decision making in a competitive business environment
5. To examine ethics and ethical principles / codes that impinge on the norm in professional life and how ethical codes could assist both professional and corporations to act in an ethical manner.
6. To identify a company’s financial strategy and the implications on the exposition of the organisation.

Introduction to Financial Statements

Microeconomic and macroeconomic Analysis (including how businesses and economies work).

Financial Performance, interpretation and weaknesses of ratios

Sources of Finance and Company Valuation

Cost of Capital, Introduction to DCF Analysis

Revision

Learning and Teaching Strategy

The module will be delivered through a combination of lectures and student-led seminars. It is envisaged that each 3-hour weekly session will be split into a 2-hour lecture and a 1-hour seminar.

Students are required to undertake the assigned readings from the recommended textbook before lectures and read additional material after lectures to consolidate their understanding of the lectures and seminar topics.

Furthermore, students are required to spend some time searching online sources for data relevant to assessments, solving numerical problems and preparing for seminar presentations in groups.

The learning,  teaching and assessment strategy for this module will enable students to develop their capabilities in digital literacy and information handling appropriate to professional/master’s level study as outlined in the Open University Digital and Information Literacy Framework (DILF: available to view at http://www.open.ac.uk/libraryservices/pages/dilframework  )

On successful completion of this module students should be able to:

1. Demonstrate a critical awareness of how Management provide the basis for determining  appropriate financial strategies and policies  for a company;
2. Use quantitative models and their independent judgement to analyse financial decisions and recommend feasible options that managers can implement;
3. Carry out a systematic and detailed analysis of a company’s performance using information from annual report and accounts, databases and the internet.
4. Demonstrate an understanding and use the appropriate analytical techniques to be applied to decisions involving the raising of finance, the use of funds for investment projects, and the distribution of funds to investors;

The performance of students may be assessed by the combination of assessment methods as appropriate to the level and learning outcome of the assessment protocol.

The assessment regime consists of two components. The first is a group assignment within a fixed time limit of problem-based nature.

The second component is individual written report which is designed to test student’s knowledge and understanding of primary theories, concepts and their application

The 2nd assessment will include a short reflective statement of personal learning and the contribution made by the module to the student’s professional development

Reading list / Reference

Arnold, G. (2013). Corporate Financial Management, 5th edn. Harlow: Financial Times/Pitman Publishing, 
Atrill, P. and McLaney, E. (2013). Accounting and Finance for Non-Specialists. Harlow: Pearson (also available on E-Book) (Full text from the library)
Baker, H. K. and Martin, G. S. (2011). Capital Structure and Corporate Financing Decisions: Theory, Evidence, and Practices. New Jersey: John Wiley and Sons Inc
Black, G (2005). Introduction to Accounting & Finance. Harlow: Pearson
Benninga, S. (2014). Financial Modelling, 4th Edition. Cambridge, Mass: MIT Press.
Berk, J. and DeMarzo, P. (2013). Corporate Finance, 3rd Edition. Boston, Mass: Pearson/Addison Wesley.

Brealey, R. A., Myers, S. C. and Allen, F. (2013). Principles of Corporate Finance, 10th Edition. London: McGraw Hill.

Copeland, T, Koller, T. and Murin, J. (2014). Valuation: Measuring and managing the value of companies. New Jersey: John Wiley and Sons.

Copeland, T. E. Weston, J. F. and Shastri, K. (2013) Financial Theory and Corporate Policy, 4th Edition.  Harlow: Pearson New International Edition.

Damodaran, A. (2014). Applied Corporate Finance, 4th Edition. New Jersey: John Wiley and Sons, Inc.

Davies, T., Boczko, T. and Chen, J. (2008). Strategic Corporate Finance. Maidenhead: McGraw-Hill. 

DeMello, J (2006).  Cases in Finance,  2nd Edition.  Maidenhead: McGraw-Hill
Drury, C. (2015). Management and Cost Accounting.  Andover: Cengage Learning
Grossman, T. and Livingstone, J. L. (2009). The Portable MBA in Finance and Accounting, 4th Edition. New Jersey:  Wiley and Sons.
Kim, S. H., Kim S. H. &  Kim. K. A.  (2006). Global Corporate Finance, 6th Edition. Oxford: Blackwell Business.

Palepu, K G, Healey, P. M and Bernard, V. L. (2012).  Business Analysis and Valuation using financial statements.  Cincinnati: South Western College Publishing/Thompson Learning

Pike, R. and Neale, B. Linsley, P. (2013). Corporate Finance and Investment, 8th  Edition. London:  Prentice Hall.

Watson, D. & Head, A. (2013). Corporate Finance: Principle and Practice, 6th                                                                                                                   Edition. London: Prentice Hall & Financial Times.
Wood, F & Sangster, A (2012) Business Accounting 1, 12th Edition, Harlow: Pearson (students are supplied with an ebook)

Academic Journals & Websites
1) 1) African Journal of Business Management
2) Journal of Applied Corporate Finance
3) Corporate Finance
4) Accounting & Business Research
5) Accounting, Auditing and Accountability Journal
6) Accounting, Organisation and Society
7) British Accounting Review
8) The European Accounting Review
9) Financial Accountability & Management
10) Administrative Science Quarterly
11) Review of Financial Studies
12) European Financial Management
13) Harvard Management Review

Other essential sources of information:
1) The Financial Times
2) The Economist
3) Bank of England Quarterly Bulletin