ASSI MANAGING FINANCIAL RESOURCES AND DECISIONS MODULE SPECIFICATION Contents Aims of the Unit 3 Unit abstract 3 Learning outcomes 3 Unit Content 3 1. Understand the sources of finance available to a business 3 2. Understand the implications of finance as a resource within a business 4 3. Be able to make financial decisions based on financial information 4 4. Be able to evaluate the financial performance of a business 4 Learning Outcomes and Assessment Criteria 5 Teaching, Learning and Assessment Plan 5 Formative and Summative Assessment - Rationale 6 Links 6 Essential Reading 6 Recommended Reading 6 Books 6 Electronic Sources 6 Employer engagement and vocational contexts 6 Unit Name: Managing Financial Resources and Decisions Pearson Unit Code: H/601/0548 Module Leader: Asif Sadiq Credit Value: 15 Credits Pearson Unit Number: Unit 2 Module Description QCF Level: 4 BTEC Programme Specification: Compulsory Module LSBM Programme Specification: Compulsory Module LSBM Delivery Year and Semester: HNC (Year One), Semester Two Aims of the Unit The unit aim is to provide learners with an understanding of where and how to access sources of finance for a business, and the skills to use financial information for decision making. Unit abstract This unit is designed to give learners a broad understanding of the sources and availability of finance for a business organisation. Learners will learn how to evaluate these different sources and compare how they are used. They will learn how financial information is recorded and how to use this information to make decisions for example in planning and budgeting. Decisions relating to pricing and investment appraisal are also considered within the unit. Finally, learners will learn and apply techniques used to evaluate financial performance. Learning outcomes 1. On successful completion of this unit a learner will: 2. Understand the sources of finance available to a business 3. Understand the implications of finance as a resource within a business 4. Be able to make financial decisions based on financial information 5. Be able to evaluate the financial performance of a business Unit Content 1. Understand the sources of finance available to a business Range of sources: sources for different businesses; long term such as share capital; retained earnings; loans; third-party investment; short/medium term such as hire purchase and leasing; working capital stock control; cash management; debtor factoring Implications of choices: legal, financial and dilution of control implications; bankruptcy Choosing a source: advantages and disadvantages of different sources; suitability for purpose e.g. matching of term of finance to term of project 2. Understand the implications of finance as a resource within a business Finance costs: tangible costs e.g. interest, dividends; opportunity costs e.g. loss of alternative projects when using retained earnings; tax effects Financial planning: the need to identify shortages and surpluses e.g. cash budgeting; implications of failure to finance adequately; overtrading Decision making: information needs of different decision makers Accounting for finance: how different types of finance and their costs appear in the financial statements of a business; the interaction of assets and liabilities on the balance sheet and on international equivalents under the International Accounting Standards (IAS) 3. Be able to make financial decisions based on financial information Budgeting decisions: analysis and monitoring of cash and other budgets Costing and pricing decisions: calculation of unit costs, use within pricing decisions; sensitivity analysis Investment appraisal: payback period; accounting rate of return; discounted cash flow techniques i.e. net present value; internal rate of return Nature of long-term decisions: nature of investment importance of true value of money; cash flow; assumptions in capital investment decisions; advantages and disadvantages of each method 4. Be able to evaluate the financial performance of a business Terminology: introduction to debit, credit, books of prime entry, accounts and ledgers, trial balance, final accounts and international equivalents under the International Accounting Standards (IAS) Financial statements: basic form, structure and purpose of main financial statements i.e. balance sheet, profit and loss account, cash flow statement, notes, preparation not required; changes to reporting requirements under the International Accounting Standards (IAS) e.g. statement of comprehensive income, statement of financial position; distinctions between different types of business i.e. limited company, partnership, sole trader Interpretation: use of key accounting ratios for profitability, liquidity, efficiency and investment; comparison both external i.e. other companies, industry standards and internal i.e. previous periods, budgets Learning Outcomes and Assessment Criteria Learning outcomes On successful completion of this unit a learner will: Assessment criteria for pass The learner can: LO1 Understand the sources of finance available to a business AC1.1 identify the sources of finance available to a business 1.2 assess the implications of the different sources AC1.3 evaluate appropriate sources of finance for a business project LO2 Understand the implications of finance as a resource within a business AC2.1 analyse the costs of different sources of finance AC2.2 explain the importance of financial planning AC2.3 assess the information needs of different decision makers AC2.4 explain the impact of finance on the financial statements LO3 Be able to make financial decisions based on financial information AC3.1 analyse budgets and make appropriate decisions AC3.2 explain the calculation of unit costs and make pricing decisions using relevant information AC3.3 assess the viability of a project using investment appraisal techniques LO4 Be able to evaluate the financial performance of a business AC4.1 discuss the main financial statements AC4.2 compare appropriate formats of financial statements for different types of business AC4.3 interpret financial statements using appropriate ratios and comparisons, both internal and external. Teaching, Learning and Assessment Plan Teaching and Learning Plan Teaching Hours per Semester – In Class Lessons 12 Hours Tutorial Hours per Semester – In Class Sessions 24 Hours Self-Study Hours 60 Hours Assessment Hours – Formative & Summative 54 Hours Total 150 Hours Assessment Plan Formative Assessment – Tutorial Activities Ongoing – In class during tutorials Summative Assessment - End of Semester Assessment – Rationale: Assessment is as essential as the provision of a learning experience and the assignment is one of the significant assessment tools for several reasons as outlined below. • It provides the scope for the evaluation of the extent to which all the learning outcomes and assessment criteria have been achieved. • Through constructive and supportive feedback students are given adequate opportunities to improve their work so as to achieve the standard required. • The grade descriptors enable students to achieve the desired grading. Assignment provides students the opportunities to develop their research skills which are essential to today's managers. • Students are able to review the works of several scholars and to assess their merits and limitations. It provides opportunities for the students to improve their level of scholarship in writing academic essays. • Contrary to time constrained examinations which require students to regurgitate information, the written assignment provides opportunities to students to apply the learning to real work situations. • Moreover, it enables students to demonstrate their analytical and critical thinking abilities which are critical to today's managers. • Assignment is a very effective instrument because it enables teacher to make objective assessment of students works based on evidence of achievement. • Lastly, it provides opportunities to take responsibility of their learning to become independent learners so that they can continue to learn and develop throughout their professional lives. Links This unit links with the following units within the HND Business Management Programme at LSBM: Unit 6: Business Decision Making Unit 11: Financial Systems and Auditing Other linking documents include; the scheme of work and the coursework descriptor. Essential Reading E-text book link on Moodle Recommended Reading Wood, Frank (2012) Business Accounting: Vol no 2: Pitman Online Journals and newsletters: Accounting and Business journals Business and finance journals Certified accountants students' News letter Employer engagement and vocational contexts Centres should develop links with local businesses. Many businesses and chambers of commerce want to promote local business and are often willing to provide work placements, visit opportunities, information about businesses and the local business context and guest speakers. www.businessbritainuk.co.uk Provides information about business in Britain and has extensive links to other business and business news sites. www.fsb.org.uk The Federation of Small Businesses provides information, support and guidance about small businesses in the UK.