25846 Managerial Finance

Subject level: Postgraduate

Handbook description

This subject provides students with an understanding of the tools and techniques used in financial decision making and up-to-date knowledge in financial management. It provides an understanding of the financial forces that influence corporate strategy, offering the opportunity for participants to acquire a range of skills and expertise expected of corporate managers. The outcomes are achieved using learning strategies that foster the application of leading-edge practices to meet the business challenges arising from international forces and technical and knowledge innovation. The subject material draws on an understanding of managerial accounting and economics, provides a basis for subsequent integrative subjects and examines the key areas of financial decision making such as risk and diversification, capital budgeting, and cost of capital.

Subject objectives/outcomes

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

1. Develop and extend financial decision-making skills.
2. Understand the role of accounting and financial information in financial decisions.
3. Explain some of the theoretical and practical difficulties of the analytical techniques used in the financial decision-making process.
4. Use various analytical techniques essential to making informed financial management decisions.
5. Gain a capacity to analyse a business and apply techniques of financial analysis when making business decisions.

Contribution to graduate profile

This subject forms part of the EMBA business disciplinary knowledge set. It aims to provide participants with the opportunity to develop an understanding of financial principles and a capacity to enhance their skills in high-level problem solving and critical thinking. It provides models for business decision making and for forecasting the outcomes of managerial decisions. It builds on economics and accounting knowledge and provides a basis for subsequent integrative management subjects.

Teaching and learning strategies

The subject uses lectures, workshop discussion, exercises and case studies to allow participants to build their understanding of the finance of the firm and their analytical capabilities in modelling managerial decisions. These methods will be supplemented with both printed and electronic learning materials and resources. The UTS web-based communication tool UTSOnline will be used to share information and encourage interaction between staff and students.

Content

• Tools of financial decision making including time value of money
• Introductory agency theory as applied in finance
• Risk measurement and diversification
• Capital budgeting; expenditure decision making; sequential decision making and abandonment options
• Financial decisions - lease versus debt and/or buy decisions
• Cost of capital issues

Assessment

Recommended text(s)

Ross, S.A., Westerfield, R.W. and Jordan, B.D. (2007) Corporate Finance Essentials, 5th edition, McGraw Hill Irwin

Indicative references

Bodie, Z. and Merton, R.C. (2000) Finance, Prentice Hall

Brealey, R.A., Myers, S.C. and Allen, F. (2006) Principles of Corporate Finance, 8th edition, McGraw Hill Irwin

Gitman, L.G. (2006) Principles of Managerial Finance, 11th edition Addison Wesley Longman

Gitman, L.G. and Madura, J. (2001) Introduction to Finance, Addison Wesley

Peirson, G., Brown, R., Easton, S., Howard, P. and Pinder, S. (2006) Business Finance, 9th edition, McGraw Hill Irwin