CPA 008: Financial Management
Categories: Certified Public Accountants (CPA)
About Course
If You’re Struggling With Your KASNEB EXAMS or You Want to Improve Your Grades, Here is an Opportunity for you to make a HUGE difference by Increasing your Chances of acing your Upcoming Examinations so ENROLL NOW!
GENERAL OBJECTIVE
This paper is intended to equip the candidate with knowledge, skills, and attitudes that will enable him/her to effectively manage, control, and optimize on institutional finances.
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STUDENTS ALSO BOUGHT
- CPA 009: Financial Reporting and Analysis
- CPA 010: Auditing and Assurance
- CPA 011: Management Accounting
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What Will You Learn?
- Nature and scope of financial management
- Functions of financial institutions and markets
- Sources of finance
- Capital structure decisions for a firm
- Liquidity and dividend decisions for a firm
- Current developments in the field of finance and their impact on financial decisions
Course Content
OVERVIEW OF FINANCIAL MANAGEMENT
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Theoretical framework of financial management – The role and responsibilities of a finance manager towards shareholders, employees, society, government and other stakeholders
41:28 -
Goals of a firm and corporate strategy; financial and non-financial objectives, overlaps and conflicts among the objectives
26:11 -
Agency theory, stakeholder’s theory and corporate governance
44:56 -
Measuring managerial performance, compensation and incentives
26:31 -
Ethical issues in financial management
07:28
THE FINANCING DECISION
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Nature and objectives of the financing decision
20:22 -
Factors to consider when making financing decisions
15:05 -
Sources of Finance for Enterprises.
01:24:47 -
Evaluation of financing options
21:42 -
Method of issuing Ordinary shares.
53:41
FINANCIAL INSTITUTIONS AND MARKETS
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Overview of a financial system – Financial markets, financial institutions and financial instruments
38:21 -
Nature and role of financial markets – primary and secondary securities market, money and the capital markets, over-the counter and organised market, derivatives market, mortgage market, forex market
52:52 -
Nairobi security exchange(NSE or equivalent entity in other jurisdictions)-The role and functions of the security exchange, security exchange terminologies, security exchange listing and cross border listing, share indices, timing of investment at the security exchange, central depository system and automated trading system, de-mutualization.
35:53 -
Stock market indices
20:23 -
Central depository system and automated trading system
23:34 -
Timing of investment at the securities exchange – Dow theory and Hatch system of timing
20:54 -
The financial institutions and intermediaries: commercial banks, savings and loans associations and co-operative societies, foreign exchange bureaus, unit trusts and mutual funds, insurance companies and pension firms, insurance agencies and brokerage firms, investment companies, investment banks and stock brokerage firms, micro-finance institutions and small and medium enterprises (SMEs)
18:52 -
Regulation of financial markets; Central bank of Kenya (CBK, or equivalent entity in other jurisdictions) – The role of the Central bank and the Monetary policy of the central bank; Capital market authority and the Insurance regulatory authority
36:22 -
Factors responsible for the rapid development of financial institutions and markets
13:58 -
Risks facing financial institutions
29:28
TIME VALUE OF MONEY
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Concept of time value of money
27:01 -
Relevance of the concept of time value of money in financial management
12:18 -
Time value of money versus time preference of money
11:24 -
Time line
11:05 -
Real versus nominal cash flows
16:05 -
Compounding techniques – Compound interest, Future value (FV) of a single cash flow and series of cash flows; Compounding of annuity cash flows
14:36 -
Discounting techniques – Present value (PV) of a future cash flow and series of future cash flows and discounting of annuity cash flows
18:35 -
Loan amortisation and sinking funds
10:29
BUSINESS/FINANCIAL ASSET VALUATION MODELS
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Concept of value; book value, going concern value, substitution value, replacement value, conversion value, liquidation value, intrinsic value and market value
55:13 -
Reasons for valuing financial assets/business
17:37 -
Theories on valuation of financial assets; fundamental theory, technical theory, random walk theory and the efficient market hypothesis
34:25 -
Valuation of redeemable, irredeemable and convertible debentures/ corporate bonds
49:41 -
Valuation of redeemable, irredeemable and convertible preference shares
20:47 -
Valuation of ordinary shares; net asset basis, price-earnings ratio basis, capitalisation of earnings basis, Gordon’s model, finite earnings growth model, Super-profit model, Walter’s model, discounted free cash flow, residual income model, Use of relative measures such as Economic Value added (EVA) and Market Value Added (MVA)
01:12:13 -
Valuation of private companies: income and market-based approaches
27:31 -
Valuation of rights issues
34:20 -
Valuation of unit trusts and mutual funds
18:01
INTRODUCTION TO CAPITAL STRUCTURE DECISIONS
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The meaning of capital structure and the factors to be taken into account when making capital structure decision
22:37 -
Cost of capital; Meaning of cost of capital, practical applications of cost of capital, component costs of capital
17:12 -
The firm’s overall cost of capital; Weighted average cost of capital (WACC), Weighted marginal cost of capital (WMCC) and factors influencing the firm’s Cost of capital
46:12 -
Leverage and Risk; Operating leverage and Operating risk, financial leverage and financial risk and total leverage and total risk
34:46 -
Analysis of Operating profit (EBIT), Earning per share (EPS) at the point of indifference in the firm’s earnings; Determination of the range of firm’s operating profit (EBIT) within which each financing option will be recommended
42:15
INTRODUCTION TO CAPITAL BUDGETING DECISIONS
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The nature and importance of capital investment decisions
00:00 -
Capital budgeting process
13:10 -
Capital investment’s cash flows – initial cash outlay, terminal cash flows and annual net operating cash flows, incremental approach to cash flow estimation
00:00 -
Capital investment appraisal techniques
00:00 -
Non-discounted cash flow methods – payback period and accounting rate of return
00:00 -
Discounted cash flow methods – net-present value, internal rate of return, profitability index, discounted payback period and modified internal rate of return (MIRR)
00:00 -
Strengths and weaknesses of the investment appraisal techniques
14:58 -
Expected relations among an investment’s NPV, company value and share price
22:14 -
Capital investment options – timing option, strategic investment option, replacement option and abandonment option
01:03:42 -
Problems/difficulties encountered when making capital investment decisions in reality
22:07
FINANCIAL STATEMENTS ANALYSIS AND FORECASTING
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Scope of financial statement analysis, major financial statements and other information sources, financial statement analysis frame work and users of financial statements and their information needs
52:41 -
Financial Statement analysis verses Business analysis
09:46 -
Techniques of financial Statement analysis; Cross-Sectional analysis, Time series analysis and a combination of both techniques.
01:02:43 -
Types of financial statement analysis
09:06 -
Ratio analysis; nature of financial ratios, classification and calculation of financial ratios and limitation of financial ratios
46:25 -
Common size statements – Vertical and horizontal analysis
32:03 -
Financial forecasting; cash budgeting and percentage of sales method of forecasting
01:13:17
WORKING CAPITAL MANAGEMENT
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Introduction and concepts of working capital
11:15 -
Working capital versus working capital management
14:04 -
Factors influencing working capital requirements of a firm
00:00 -
Types of working capital
00:00 -
Importance and objectives of working capital management
12:35 -
Working capital operating cycle; the importance and computation of the working capital operating cycle
00:00 -
Working capital financing policies: Aggressive, conservative and matching financing policy
00:00 -
Determining the finance mix: basic approaches for determining an appropriate Working Capital finance mix; Hedging or matching approach, conservative approach, aggressive approach.
00:00 -
Management of inventory: kinds of inventory, objectives of Inventory Management, Techniques of Inventory Management; stock levels, Economic Order Quantity (EOQ) and Just-In-Time(JIT)
00:00 -
Cash Management; Motives of holding cash, techniques of managing cash, cash management models-Baumol model, Miller-Orr model and Orgler’s model
00:00 -
Management of accounts receivable and accounts payable; assessing creditworthiness, collecting amounts owing, trade credit
DIVIDEND DECISION
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Meaning and significance of dividend policy
19:20 -
Factors influencing dividend policy
19:45 -
Forms of dividend: script dividend, cash dividend, stock dividend, bond dividend, property dividend
07:06 -
Dividend theories; Bird in hand theory, Clientele effect theory, Information signalling theory, Walter’s model, Gordon Model, Tax differential theory, Modigliani and Miller dividend irrelevance theory
31:48 -
Types of dividend policy: regular dividend policy, stable dividend policy, irregular dividend policy, zero dividend policy
14:55 -
The impact of dividend payout on share price
20:13
INTRODUCTION TO PORTFOLIO ANALYSIS
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Introduction – Risk-return trade off/relationship, Distinction between risk free and risky assets
24:03 -
Expected return, Standard deviation of returns and the Relative risk of an individual asset
24:28 -
Expected return of a 2 asset-portfolio
08:39 -
The Covariance and correlation coefficient of returns of assets
30:18 -
The actual portfolio risk of a 2-asset portfolio using the analytical and mathematical model and its interpretation
25:03
ISLAMIC FINANCE
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Justification for Islamic Finance; history of Islamic finance; capitalism; halal; haram; riba; gharar; usury
19:42 -
Benefits and deficiencies of Islamic Finance
11:41 -
Principles underlying Islamic finance: principle of not paying or charging interest, principle of not investing in forbidden items; ethical investing; moral purchases
10:52 -
The concept of interest (riba) and how returns are made by Islamic financial securities
14:56 -
Sources of finance in Islamic financing
09:19 -
Types of Islamic financial products:- sharia-compliant products: Islamic investment funds; takaful the Islamic version of insurance Islamic mortgage, murabahah, Leasing – ijara; safekeeping – Wadiah; sukuk – islamic bonds and securitisation; sovereign – sukuk; Islamic investment funds; Joint venture – Musharaka, Islamic banking, Islamic contracts, Islamic treasury products and hedging products, Islamic equity funds; Islamic derivatives
12:15 -
International standardisation/regulations of Islamic Finance: case for standardisation using religious and prudential guidance, National regulators, Islamic Financial Services Board
17:37
PERSONAL FINANCIAL MANAGEMENT
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Financial Problems encountered in managing individual financial affairs
09:03 -
Savings and investment considerations
24:45 -
Personal risk management
26:24 -
Cost of credit
24:07 -
Financial Alterations – Retirements; Estate and Tax planning and family budgeting
22:04
CONTEMPORARY ISSUES AND EMERGING TRENDS
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Globalisation and growth of derivative markets and securitisation
13:35 -
Cryptocurrency
11:51 -
Block chain technology
06:41 -
Cloud funding
05:38 -
Digitisation of financial transactions
10:51 -
Behavioural finance
08:58 -
Big data project finance
13:48
REVISION QUESTIONS WITH ANSWERS
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CPA FINANCIAL MANAGEMENT AUGUST 2023 Q1
35:08 -
CPA FINANCIAL MANAGEMENT AUGUST 2023 Q2
32:27 -
CPA FINANCIAL MANAGEMENT AUGUST 2023 Q3
24:39 -
CPA FINANCIAL MANAGEMENT AUGUST 2023 Q4
23:37 -
CPA FINANCIAL MANAGEMENT AUGUST 2023 Q5
20:53
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