The aim of the syllabus is to develop the knowledge and skills expected of a finance manager, in relation to investment, financing, and dividend policy decisions.
The syllabus for Financial Management is designed to equip candidates with the skills that would be expected from a finance manager responsible for the finance function of a business. It prepares candidates for more advanced and specialist study in Advanced Financial Management.
The syllabus, therefore, starts by introducing the role and purpose of the financial management function within a business. Before looking at the three key financial management decisions of investing, financing, and dividend policy, the syllabus explores the economic environment in which such decisions are made.
The next section of the syllabus is the introduction of investing decisions. This is done in two stages – investment in (and the management of) working capital and the appraisal of long-term investments.
The next area introduced is financing decisions. This section of the syllabus starts by examining the various sources of business finance, including dividend policy and how much finance can be raised from within the business. It also looks at the cost of capital and other factors that influence the choice of the type of capital a business will raise. The principles underlying the valuation of business and financial assets, including the impact of cost of capital on the value of business, is covered next.
The syllabus finishes with an introduction to, and examination of, risk and the main techniques employed in managing such risk