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FINANCE DFI404 Financial management private sector

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    Always Do the Reading

    Background Knowledge Expected

    Great Intro to the Subject

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    • Profile picture
    Jul 28, 2016
    | Would highly recommend.

    Not too easy. Not too difficult.

    Course Overview:

    This course is highly beneficial as the knowledge is applicable to a wide range of fields as well as in management of personal funds.

    Course highlights:

    Cash Management: A goal of the cash management function is to make certain the business enterprise always has the resources it needs to meet its financial obligations on time. A cash deficit compared to what the owner forecast can cause serious harm to the company’s image and operations. For example, the company may not be able to fill an important order because it cannot pay for the raw materials needed to make the products. Managing accounts receivable and accounts payable is part of effective cash management. The business owner wants to make certain he is collecting all the funds due the company -- the accounts receivable -- as quickly as he can. Conversely, he seeks to stretch out the time he takes to pay bills from outside vendors. In doing so, he doesn’t want the company to get a reputation for paying so slowly that his suppliers insist on strict terms such as payment upon delivery. Planning and Forecasting: The financial management aspect of planning involves accurately forecasting the company’s revenues, expenses and resulting net profit. The business owner uses the forecast -- sometimes called a budget -- as a tool to manage the company. Significant negative variances to forecast indicate that the business environment and his company’s performance in the marketplace were not what he assumed they would be when he created his annual plan. Analyzing these variances focuses his attention on changes he needs to make to his strategies or operations to get the company back on course to reaching its goals. Financial Reporting: A business owner and his management team require timely and accurate reports in order to make decisions and run the company effectively. The staff members responsible for financial management must determine the key pieces of information the owner and his team need for decision making. They then design reports to provide this information in a format that is most useful to the management team. The most significant metrics vary by the type of company. A hotel owner, for example, keeps a close eye on occupancy -- the percentage of rooms used. A decline in occupancy compared to the same month in the previous year would prompt investigation by the financial staff into whether this was due to unusual circumstances such as bad weather or indicative of competitors taking business away from the hotel. Capital Structure: Startup companies often need to obtain outside capital from wealthy individuals or venture capital firms in order to fund the company until it reaches the breakeven point. As the company grows, it may need additional infusions of capital to fund expansion. The financial management function determines the best form of capital for the venture -- debt, equity or a combination -- how much is required and when it is needed. Larger companies with stable cash flow can borrow funds from financial institutions rather than having to give up an equity share to investors in order to get the capital the company requires.

    Hours per week:

    9-11 hours

    Advice for students:

    Students who consider to take this course should first have an interest and positive attitude towards finance. Again the student should be good in mathematics since this course in involves various computations that require accuracy and aptitude.

    • Summer 2010
    • Dr Kiprotich Titus
    • Yes
    • Background Knowledge Expected Great Intro to the Subject Always Do the Reading

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