Financial Management Overview Quiz
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Questions and Answers

What is the primary focus of the financial management module's initial weeks?

  • Cost of capital estimation
  • Investment appraisals
  • International finance
  • Understanding the business environment (correct)

Which of the following best describes the two key decisions explored in financial management?

  • Budgeting and variance analysis
  • External funding and debt management
  • Cost allocation and asset depreciation
  • Investment decisions and financing decisions (correct)

During which week is the focus on working capital management introduced?

  • Week 9
  • Week 3 (correct)
  • Week 1
  • Week 6

Which outcome relates to understanding the impact of the economic environment on financial management?

<p>Discuss the impact of the economic environment (B)</p> Signup and view all the answers

What is emphasized about the nature of financing decisions in financial management?

<p>They are about how to fund acquisitions. (C)</p> Signup and view all the answers

Which area is likely covered in Week 4 of the module?

<p>Investment appraisals (A)</p> Signup and view all the answers

What is addressed in the topic of 'cost of capital' within the module?

<p>Estimating the Weighted Average Cost of Capital (WACC) (D)</p> Signup and view all the answers

In terms of business valuation, what aspect is highlighted in the module?

<p>Nature and purpose of valuation of business (B)</p> Signup and view all the answers

What topic is likely discussed concerning finance for small-and-medium sized entities?

<p>Sources of and raising business finance (A)</p> Signup and view all the answers

What fundamental aspect does financial management evaluate?

<p>The role and purpose of financial management (B)</p> Signup and view all the answers

What is the stated start time for the lesson?

<p>3:00 PM (A)</p> Signup and view all the answers

Which of the following is NOT a requirement for participation in the class?

<p>Food allowed during class (B)</p> Signup and view all the answers

What consequence is mentioned for students who do not attend classes?

<p>They tend to fail the module (C)</p> Signup and view all the answers

What should students do with their private conversations during class?

<p>Avoid them entirely (B)</p> Signup and view all the answers

What is the lecturer's approach towards engaging students?

<p>Encourage participation and questions (B)</p> Signup and view all the answers

What type of electronic devices can students bring for note-making?

<p>Laptops and iPads (A)</p> Signup and view all the answers

Which of these statements reflects the lecturer's expectation of students?

<p>Engagement is crucial for a positive learning experience (A)</p> Signup and view all the answers

What behavior is explicitly prohibited during teaching sessions?

<p>Using social media (B)</p> Signup and view all the answers

Which phrase encapsulates the lecturer's view on attendance?

<p>Everyone should attend to avoid failing (A)</p> Signup and view all the answers

What is the lecturer’s stance on asking questions?

<p>There are no silly questions (C)</p> Signup and view all the answers

What is the primary focus of investment appraisal in a business context?

<p>Evaluating the potential profitability of investments (B)</p> Signup and view all the answers

Which of the following practices is NOT recommended during exam preparation?

<p>Trusting that you can perform well without revision (D)</p> Signup and view all the answers

Which of the following techniques is essential for managing risk in business?

<p>Identifying, assessing, and controlling risks (C)</p> Signup and view all the answers

What is a common misconception about exam writing in finance courses?

<p>Writing fewer lines increases clarity (C)</p> Signup and view all the answers

Why is it vital for Finance and Accounting students to keep up with current news?

<p>To enhance both their academic performance and career prospects (A)</p> Signup and view all the answers

Which approach should NOT be taken when revising for finance exams?

<p>Believing you already know all necessary information (C)</p> Signup and view all the answers

What is the impact of leaving an exam before the allotted time is complete?

<p>It may lead to unnecessary resits if scores are low (D)</p> Signup and view all the answers

What is the purpose of conducting individual examinations in finance courses?

<p>To assess individual understanding and application of concepts (D)</p> Signup and view all the answers

What does effective asset valuation depend on?

<p>Market trends and quantitative analysis (A)</p> Signup and view all the answers

What is a key aspect of blended learning for finance students?

<p>Combining traditional lectures with online resources (B)</p> Signup and view all the answers

Flashcards

Lesson Start Time

The time at which a lecture officially begins.

Be Present

A student's responsibility to be present and attentive during lectures.

Be Respectful

A student's responsibility to be respectful towards the lecturer and classmates.

No Food in Teaching Rooms

A rule prohibiting food consumption in the classroom.

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Register Yourself

The action of registering oneself for a course or module.

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Bring Laptops/Ipads

The use of electronic devices like laptops and tablets for note-taking and studying.

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Calculators Allowed, Phones Not

The use of calculators is allowed but personal devices like smartphones for social media are not.

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No Such Thing As a Silly Question

A student's right to ask questions in class without fear of judgment.

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Happy Students = Happy Life

A positive outcome stemming from students' commitment to the course.

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What is financial management?

Financial management is the practice of planning, organizing, directing, and controlling the financial activities of a business to achieve its objectives. It involves making decisions about how to acquire, use, and manage financial resources.

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How does the economic environment impact financial management?

The economic environment influences financial management by impacting factors such as interest rates, inflation, and economic growth. This can affect investment decisions, financing choices, and overall financial planning.

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What is working capital management?

Working capital management focuses on managing a company's short-term assets and liabilities. It involves decisions related to cash, inventory, and accounts receivable to ensure sufficient liquidity and efficient operations.

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What are investment appraisals?

Investment appraisals involve assessing the profitability and viability of potential investment projects. This helps companies make informed decisions about where to allocate their resources.

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What is the cost of capital?

The cost of capital represents the return a company expects to earn on its investments to compensate investors for their risk. It helps determine the minimum acceptable rate of return for projects.

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What is capital structure?

Capital structure refers to the mix of debt and equity financing used by a company. It involves decisions on how much debt and equity to use to fund operations.

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What are sources of finance?

Sources of finance include various ways companies raise capital, such as bank loans, bonds, equity issuance, and retained earnings. Each source carries different costs and benefits.

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What is business valuation?

Business valuation involves determining the current market value of a business or its assets. This is important for mergers and acquisitions, estate planning, and other financial transactions.

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What is portfolio theory?

Portfolio theory suggests that investing in a diversified portfolio of assets can reduce risk compared to investing in a single asset. It helps investors balance risk and return.

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What is the secondary capital market?

The secondary capital market is where previously issued securities are traded among investors. It provides liquidity for investors and helps determine market prices for companies.

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Investment Appraisal

The process of evaluating potential investments to determine their feasibility and profitability.

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Risk Management Techniques

Techniques used to identify, assess, and manage potential risks that could impact a business.

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Asset Valuation

The process of determining the current market value of an asset, taking into account its future earnings potential and risk.

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Business Valuation

The process of determining the overall worth of a business, considering its assets, liabilities, and future prospects.

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Discounted Cash Flow (DCF)

A method of investment appraisal that considers the time value of money by discounting future cash flows to their present value.

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Diversification

A risk management technique that involves diversifying investments across different asset classes to reduce overall portfolio risk.

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Risk Transfer

A risk management technique that involves transferring risk to another party, typically through insurance or hedging.

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Risk Mitigation

A risk management technique that involves taking steps to reduce the likelihood or impact of a risk.

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Risk Monitoring and Review

Ongoing monitoring and review of risk management strategies to ensure their effectiveness and adapt to changing circumstances.

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Contingency Planning

A risk management technique that involves setting aside funds to cover potential financial losses.

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Study Notes

Module Introduction

  • Module title: Financial Management
  • Module duration: 12 weeks
  • Learning style: Blended learning (lectures, seminars, worksheets, news articles, quizzes, calculations, mock paper, guest speakers)
  • Lecturer: Nikki Sanford, N.SANDFORD@UC, B.AC.UK, MS122
  • Assessment: 3-hour individual examination
  • Academic Calendar 2024-2025 semester 1 is included, showing key dates like enrolment/induction dates, holidays, exam dates etc

Module Overview

  • Covers key principles of financial management
  • Explores environment in which financial decisions are made (focus on nature, role, and purpose of financial management)
  • Broadly covers financing decisions and various finance sources, cost of capital, and capital structure
  • Content covers topics in 10 weeks including introduction to modules, financial management function and business environment, working capital management, investment appraisals

Weekly Breakdown

  • Week 1: Introduction to the module
  • Week 2: Financial management function and the business environment
  • Week 3: Working capital management
  • Week 4: Investment appraisals
  • Week 5-Week 4: International aspects of business finance and finance for small and medium-sized enterprises (SMEs)
  • Week 6: Business finance: Sources of and raising business finance
  • Week 7: Estimating the cost of capital (WACC)
  • Week 8: Business valuations: Nature and purpose of valuation of business and financial assets
  • Week 9: Portfolio theory and its relevance, sources of long-term finance
  • Week 10: Secondary capital market, its efficiency / gearing
  • Week 11: Mock paper
  • Week 12: Mock paper results, exam revision

Learning Outcomes

  • Evaluate the role and purpose of financial management.
  • Discuss the impact of the economic environment on financial management.
  • Analyze and apply working capital management techniques.
  • Demonstrate and apply an approach to effective investment appraisal.
  • Discuss and apply risk management techniques in business and explain the principles of asset and business valuations.

Important Information

  • Class start time: 3.00 pm, not 3.15 pm or 3.30 pm
  • Use of phones: calculators only, social media is not permitted in class
  • Be present, respect others, and actively participate in class.
  • No food in teaching rooms, bring laptops/iPads
  • Ensure you can use the allocated time for your exam successfully
  • Lecturer support is available and students are expected to participate in the module.
  • Canvas and a specific YouTube video are mentioned, likely for additional resources.

Important Things Not to Do

  • Don't try to "wing it" in the exam
  • Avoid relying on others (it's individual work)
  • Don't miss classes
  • Don't expect the exam to be easy or for the exam paper to do the work for you
  • Write only a few sentences in the exam paper; you will likely fail
  • Leave the exam early; use the whole time.

News Reports

  • Finance and accounting students should stay updated with business news, local news, national news, and global news.
  • Keeping up with current events is beneficial for academic and career pathways.

Additional Notes:

  • The use of technical terms, financial principles, and management are emphasized within the module

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Description

Test your knowledge on the principles of financial management with this quiz, covering the critical components included in the first 10 weeks of the course. Prepare for your individual examination by exploring topics such as financing decisions, cost of capital, and working capital management.

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