SUBJECT CODE – FIN600/FIN6017
SUBJECT NAME – FINANCIAL MANAGEMENT
UNIVERSITY NAME – TORRENS UNIVERSITY, AUSTRALIA
Financial Management FIN600 and FIN6017 are core subjects offered at Torrens University, Australia for the students who are commencing their Master of Business Administration degree.
The subjects focus on how to use financial and accounting information for decision-making purposes. It is intended for the leader or manager who will use rather than produce accounting and financial data.
The courses also cover the numerous types of financial decisions that leaders must make, as well as the tactics required to foresee the options, weigh the benefits and drawbacks of each, and recognize the tradeoffs that each option entails. The goal of these subjects Financial Management FIN600 and FIN6017 are for students to learn how to apply accounting and finance theory and concepts to the study of key business situations, as well as to improve their skills in applying numerical analysis and research to back up their arguments.
Financial Management
Financial Management refers to the planning, organizing, directing, and controlling of the financial activities like procurement and utilization of funds of a business organization.
Objectives of Financial Management
Financial management is concerned with the purchase, allocation, and control of a company's financial resources. The objectives are: To secure a consistent and adequate supply of cash to the organization. To provide adequate returns to shareholders, which will be determined by earning capability, the market price of the stock, and shareholder expectations. To ensure optimum utilization of funds. Once funds have been obtained, they should be put to the best possible use at the lowest possible cost. To ensure investment safety, assets should be invested in safety initiatives in order to get a sufficient rate of return. To plan a healthy capital structure–A sound and fair capital composition is required to maintain a balance between debt and equity capital.
Ratio Analysis
The quantitative interpretation of a company's financial performance is called ratio analysis. It gives useful information regarding the company's profitability, solvency, operational efficiency, and liquidity as represented by financial statements.
Financial Ratio Analysis is used in the following areas-
Liquidity
Solvency
Profitability
Efficiency
Liquidity Analysis
Liquidity analysis is a method of determining a company's ability to satisfy urgent debt obligations with existing current assets. Two types of ratios to analyze a company's liquidity are-
Current Ratio
Quick Ratio
Solvency Analysis
Solvency analysis is a method to determine a company's ability to pay all its debts with its income, assets, and divided by equity. Two types of ratios to analyze a company's solvency are-
Total Debt Ratio
Debt to Equity Ratio
Profitability Analysis
Profitability analysis is a method to determine a company's ability to make funds from its goods and divided by or services. Four types of ratios to analyze a company's profitability are-
Net Profit Margin
Return on Total Assets
Basic earning power
Return on Equity
Efficiency Analysis
Efficiency analysis is a method to determine how hard a company works on its assets on behalf of its shareholders or owners. Four types of ratios to analyze a company's efficiency are-
Inventory Turnover Ratio
Days Sales Outstanding Ratio
Fixed Assets Turnover Ratio
Total Assets Turnover Ratio
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Assessment Details – Case Study Report
Learning Outcomes of the subjects Financial Management FIN600 and FIN6017 Assessments-
Learn and utilize the key theories and principles of Financial Management.
Evaluate the role and content of each of the four main financial statements as sources of quantitative data and also state their impact on business decision-making.
Research and evaluate the range of issues involved in different types of financial funding.
Understand and evaluate different types of budgets and their impact on long-term and short-term business decisions.
Analyze Financial Statements using effective strategies and apply accountancy information for informed managerial decision-making.
The purpose of the assignment is to provide you with the opportunity to apply the knowledge and skills acquired in Financial Management FIN600 and FIN6017, to a practical task, involving the use of 'real-world' accounting information. This is intended to consolidate your accounting knowledge and skills.
The basic requirement is to undertake a general financial analysis, comparing financial position and performance over the two most recent financial years, of an ASX listed company. Your Learning Facilitator will provide the details of the ASX listed company. The annual report for the chosen company should be available on the company website and/or will be provided by your Learning Facilitator.
The analysis should consider each of the following financial ratios:
profitability and market performance
efficiency,
liquidity,
capital structure
The assignment is divided into two parts.
Schedule(s) of relevant ratios and other useful calculations
The detailed calculation of relevant ratios and other useful calculations should be included, as one appendix, prepared using Excel
You will be advised by your facilitator as to which ratios to calculate
.- You are advised to show the formulae used in determining particular ratios and other figures.
A report is the main element of this assignment.
The written report should:
Explain what is revealed by the ratios and other calculations, in the context of the company's profitability, asset efficiency, liquidity, capital structure, and market performance.
In particular, any important changes over the two financial years should be
identified, discussed and, where possible, explained.
Provide an overall assessment of whether the company, over the recent financial a year has been better than the previous financial year, in the perspective of existing equity investors (shareholders).
In preparing this report, you should:
analyze the financial statements of the business;
identify key ratios and apply ratio analysis;
argue the case of why the organization may or may not succeed in the future and what the business should be doing to help it succeed;
consider the impact of the political and competitive environment on the business;
include external factors that need to be taken into consideration and the likelihood of a merger or acquisition;
provide a recommendation, that is, would you invest in this company after your own analysis or under what circumstances would you buy/save the business?
Note- Make sure that the length of the report should not exceed more than 3000 words.
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