PRINCIPLES OF BUSINESS FINANCE

Tutor: Mr P.Mwangala


STATEMENT ABOUT ACADEMIC HONESTY AND INTEGRITY

 

All students, upon signing this course outline, commit themselves to abide by the policies and rules of the institution. The core activity of ABN is learning and in this respect academic honesty and integrity is very important to ensure that learning is valid, reliable and credible.

 

ABN therefore does not condone any form of academic dishonesty, including plagiarism and cheating on exams and assessments, amongst other such practices. ABN requires students to always do their own assignments and to produce their own academic work, unless given a group assignment.

 

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MODULE                                 :     PRINCIPLES OF BUSINESS FINANCE [PBF 2000]

 

QUALIFICATION                           :      DIPLOMA IN BANKING, FINANCE AND CREDIT NQF [Level 6]

Year 2, Semeste3

                                                               

Tutor                                         :        P M Mwangala

                                                               

 

 Module Objectives

 

This module is designed with the following key objectives in mind.

 

1)     To acquaint students with basic concepts in business finance and the importance of finance for all forms of business organizations

2)      To develop among students the understanding of the critical financing options and decisions available to businesses

3)     To acquaint students with the various approaches to  business finance from the perspective of credit providers (banks in particular)and the internal financial management of businesses

4)     To acquaint students with the role and importance of financial statements in arriving at the business finance and financing

5)     Where appropriate the module will draw from the practical experiences in business finance from local and external practices

6)     Students will have a clear understanding on how to source funding for business that is economical, cost efficient and effective utilization of financial resources of a business enterprise.

 

Module Requirements

 A prescribed resource titled: Principles of Business Finance – Academy of Banking Namibia ‘s Study Guide Publication; is a requirement. The guide is available to students upon registration.

Other Reading Materials

·         Bonaccorsi   Di Patti E and G dell’ Ariccia 92004) Bank cCompetion and Firm Creation , Journal of Money, Credit and Banking; 225-251

·         Jerry Cover (1999) Profitability Analysis; A Necessary Tool for Success in 21st Century, ABA Banking Journal ,91,(2,) 78

·         Prasana Chandra, 2005 : “Financial Management- Theory and Practice”  6TH Ed, Bangalore,     McGRAW- Hill

·         T Olds, T Schneider (2006) “Fundamental Managerial Accounting Concepts”  3 Ed , New York ,Mc Grow- Hill Irwin

 

Continuous Assessment will be based on two (2) assignments submitted and marked during each semester.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outline

1.                 Role of profits

·         Introduction

·         Needs of business to survive

·         Objectives of financial management

·         Profit motive and wealth creation

·         Importance of cash flow

·         Profit vs cash flow

·         Accounting and finance related terms.    

 

2.                      Process of profit making

·         Introduction

·         Process of making profit

·         Role of shareholder

·         Why borrow

·         Assets and their use

·         Sales and importance

·         Accounting and financial related terms

 

3.                 Measurement of financial success

·         Introductions

·         Shareholder success measurement

·         Management success indices

·         Accounting and finance related terms

 

4.                    Key figures in Business

·         Introduction

·         Meaning of profitability

·         Meaning and importance of gearing

·         Meaning and importance of efficiency/activity indicators

·         Accounting and financial terms

 

  1.          Production of financial statements

 

·         Introduction 

·         Role of financial statements

·         Key financial statements

·         Financial statements and business management

·         Accounting and financial terms

  1.            Role of balance sheet

·         Introduction

·         Balance sheet- individuals

·         Balance sheet – company

·         Decomposing the balance sheet

·         Accounting and financial related terms

                  

  1.  Role of income statement

·         Introduction

·         Role of income statement

·         Decomposing income statement

·         Sales and costs

·         Profits and costs

·         Dividends and retained earnings

·         Accounting and financial related terms

·         Levels of profit

  1. Cash flow statement

·         Introduction

·         Cash flow statement items

·         Measurement of cash flow

·         Sound cash flow management

·         Accounting and financial related terms

  1. Financial ratios

·         Introduction

·         Profitability indicators

·         Efficiency indicators

·         Liquidity indicators

·         Gearing indicators

               

References:

As indicated in the study guide.