CPA- Intermediate Financial Management

By Jacob Tuda Categories: CPA
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About Course

This paper is intended to equip the candidate with knowledge, skills and attitudes that will
enable him/her to effectively manage, control and optimize on institutional finances.
A candidate who passes this paper should be able to:
 Explain the nature and scope of financial management
 Describe the nature and functions of financial institutions and markets
 Analyse the sources of finance for an organisation and evaluate various financing
 Evaluate various investment decision scenarios available to an organisation
 Evaluate the performance of a firm using relevant financial tools
 Make appropriate capital structure decisions for a firm, Value financial assets and firms
 Make appropriate liquidity and dividend decisions for a firm
 Evaluate current developments in the field of finance and their impact on financial

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Course Content

1. Overview of Financial Management
1.1 Theoretical framework of financial management - The role and responsibilities of a finance manager towards shareholders, employees, society, government and other stakeholders. 1.2 Goals of a firm and corporate strategy; financial and non-financial objectives, overlaps and conflicts among the objectives 1.3 Agency theory, stakeholder’s theory and corporate governance 1.4 Measuring managerial performance, compensation and incentives 1.5 Ethical issues in financial management

  • Introduction to Financial Management

2. The financing decision
2.1 Nature and objectives of the financing decision 2.2 Factors to consider when making financing decisions 2.3 Sources of finances for enterprises; internally generated funds and the externally generated funds, long term sources (equity, debt, hybrids, lease finance, venture capital, business angel finance, private equity, asset securitisation and sale, Islamic finance and initial coin offerings), medium term sources such as medium term loans and hire purchase financing and short term sources of finance such as overdraft finance, trade credit, issue of commercial papers, accruals, deferred income; characteristics of each source of finance, pros and cons of the various sources of finance. 2.4 Evaluation of financing options 2.5 Methods of issuing ordinary shares - Public issue, private placement, bonus issue, employee stock option plans (ESOPS) and rights issues

3. Financial institutions and markets
3.1 Overview of a financial system - Financial markets, financial institutions and financial instruments 3.2 Nature and role of financial markets - primary and secondary securities market, money and the capital markets, over-the counter and organised market, derivatives market, mortgage market, forex market 3.3 Nairobi securities exchange (NSE, or equivalent entity in other jurisdictions) - The role and functions of the securities exchange, securities exchange terminologies, security exchange listing and cross border listing, share indices, timing of investment at the securities exchange, Central depository system and automated trading system, de-mutualisation 3.4 Stock market indices 3.5 Central depository system and automated trading system 3.6 Timing of investment at the securities exchange - Dow theory and Hatch system of timing 3.7 The financial institutions and intermediaries: commercial banks, savings and loans associations and co-operative societies, foreign exchange bureaus, unit trusts and mutual funds, insurance companies and pension firms, insurance agencies and brokerage firms, investment companies, investment banks and stock brokerage firms, micro-finance institutions and small and medium enterprises (SMEs) 3.8 Regulation of financial markets; Central bank of Kenya (CBK, or equivalent entity in other jurisdictions) - The role of the Central bank and the Monetary policy of the central bank; Capital market authority and the Insurance regulatory authority 3.9 Factors responsible for the rapid development of financial institutions and markets 3.10 Risks facing financial institutions

4. Time-value of money
4.1 Concept of time value of money 4.2 Relevance of the concept of time value of money in financial management 4.3 Time value of money versus time preference of money 4.4 Time line 4.5 Real versus nominal cash flows 4.6 Compounding techniques - Compound interest, Future value (FV) of a single cash flow and series of cash flows; Compounding of annuity cash flows 4.7 Discounting techniques - Present value (PV) of a future cash flow and series of future cash flows and discounting of annuity cash flows 4.8 Loan amortisation and sinking funds

Valuation of financial assets and Business

Topic 6 introduction to capital structure decision

7. Introduction to capital budgeting decisions

8. Financial statement analysis and foresting

9. Working capital management

10. Dividend decisions

11. introduction to portifolio analysis

12. Islamic finance

13. Personal financial management

14. Contemporary issues and emerging trends

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