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Unit 02 Finance for Strategic Management Specification444444444444

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6 views3 pages

Unit 02 Finance for Strategic Management Specification444444444444

Uploaded by

yusufhajahmad2023
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Unit 2 Finance for Strategic Managers

Unit aims The learners will develop knowledge, understanding and skills that will
enable them to analyse internal and publicly available financial
information. This will help to inform strategic decision-making.

Unit level 7
Unit code Y/650/5361
GLH 60
Credit value 15
Unit grading structure Pass-Merit-Distinction
Assessment guidance To achieve this unit learners must produce work which demonstrates
achievement of the learning outcomes at the standards provided by the
assessment criteria.

Learners must relate their work to the ATHE assignment scenario and
use real life examples to illustrate their points. Learners will need to
demonstrate their full understanding of the use of financial information in
business decision-making. Learners can use their own experience or
provide examples of businesses from their research to exemplify the
points which are made. Learners will need to access and interpret
published business accounts. Additional assessment guidance is
provided in the ATHE assignment.

Learner work should demonstrate substantial coverage of the unit


indicative content.

Learning outcomes Assessment criteria


The learner will The learner can:
demonstrate that
they:
Pass Merit Distinction
1. Understand the 1.1 Evaluate the
importance of sources of financial
financial data in data which can be
formulating and used to inform
delivering business business strategy
strategy 1.2 Assess the
importance of
financial data and
information in
relation to business
strategy
1.3 Analyse the risks
related to financially
based business
decisions

2. Can use financial 2.1 Interpret financial 2M1 Make 2D1 Recommend
analysis as a tool for statements to recommendations to methods and tools
strategic decision- assess the viability an organisation based that allow businesses
making of an organisation on the analysis and to analyse financial

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2.2 Conduct a interpretation of the data for strategic
comparative financial information decision-making
analysis of financial 2M2 Assess the
data using ratio limitations of ratio
analysis analysis as a tool for
strategic decision-
making

3. Can evaluate 3.1 Review techniques 3M1 Assess the 3D1 Assess the
proposals for for appraising importance of cash impact of a capital
strategic capital strategic capital flow management expenditure proposal
expenditure in an expenditure projects when evaluating on the strategic
organisation 3.2 Evaluate business proposals for capital direction of an
proposals for capital expenditure organisation
expenditure in an
organisation

Indicative Content

LO1 Understand the importance of financial data in formulating and delivering business strategy

• Sources of financial information: internal (internal accounting systems, payroll etc.), external
(suppliers, Companies House, the Budget etc.)
• Financial information: profitability, cash flow, business value, financial stability, cost projections
• Need for financial information: assessing finance requirements, obtaining finance, reporting to
owners, shareholders, and stakeholders, setting, and meeting targets, appraising new projects,
managing risk, internal needs v external needs
• Business risks: strategic, market, compliance, operational, risk modelling

LO2 Use financial analysis as a tool for strategic decision-making

• Published accounts: purpose, provide information to shareholders/stakeholders, users – for


example, shareholders, potential shareholders, managers, employees, lenders, creditors,
suppliers, customers, community, competitors, annual reports, including main financial
statements (statements of financial position, income statements, sources and statements of
cash flows), director’s report, audit report, notes to accounts etc., internal management accounts
versus published financial accounts, structure of financial statements – content and
requirements, limitations of published accounts.
• Comparative analysis: comparison between years, comparison between businesses, Industry
comparisons, benchmarking.
• Ratio analysis: reasons for using ratios, advantages and limitations, ratio categories, including
profitability, liquidity, efficiency, capital, and investor

LO3 Evaluate proposals for strategic capital expenditure in an organisation

• Types of expenditure, difference between capital and revenue expenditure (definitions, decision
making, treatment in financial statements)
• Investment appraisal techniques: payback, accounting rate of return, net present value, internal
rate of return, discounted cash flow, cost benefit analysis, value for money.
• Long term and short-term finance: definitions of long term and short term, importance of
matching finance to project

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• Sources of finance: range of sources, external and internal sources, role of markets, Role of
government, long term and short term, advantages and disadvantages of each source,
implications of each source, for example gearing
• Cash flow management: cash flow forecasts v cash flow statements, managing inventory, trade
payables, trade receivables, etc., budgetary control processes – budgets and variances

Suggested Resources

Atrill, P., 2017, Financial Management for Decision-Makers, Harlow: Pearson

Annand, D. and Dauderis, H., 2019, Introduction to Financial Accounting: International Financial
Reporting Standards (Lyryx), Lyryx

Cox, D., 2017, Business Accounts (Fifth Edition), Osborne Books

Elliot, B. and Elliot, J., 2019, Financial Accounting and Reporting, Harlow: Pearson

Karadag, H., 2015, Strategic Financial Management for Small and Medium Sized Companies, Emerald
Group Publishing

Kumar, R., 2017, Strategic Financial Management Casebook, Academic Press

Lunt, H., 2022, Fundamentals of Financial Accounting, Elsevier Ltd

Mowen, M. M., Hansen, D. R. and Heitger, D. L., 2022, Managerial Accounting: The Cornerstone of
Business Decision-Making, Cengage learning

Thomas, A., and Ward, A., 2019, Introduction to Financial Accounting, 9th Edition. McGraw Hill

Websites

https://www.accaglobal.com/gb/en.html - ACCA Learner Accountant site with some relevant articles

https://www.fasb.org/ - Financial Accounting Standards Board

www.iasplus.com - International accounting standards

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