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IB125 - Foundations of Financial Management

  • Module code: IB125
  • Module name: Foundations of Financial Management
  • Department: Warwick Business School
  • Credit: 12

Content and teaching | Assessment | Availability

Module content and teaching

Principal aims

The aims of the module are: to introduce you to the key concepts of Financial Management in a way that builds sound intuition from the outset, without sacrificing rigour; to prepare the foundations for more advanced study of Finance by encouraging you to develop a critical understanding of the main theories and models (and the assumptions that underpin them) of Financial Management; to provide you with structured opportunities to practise using the key tools and techniques of Financial Management; to encourage you to read the financial press and to make links with what you are learning in the classroom.

Principal learning outcomes

By the end of the module you should be able to: critically appraise the value added by a capital project by calculating the present value of expected future cash flows, and estimating the cost of capital; describe how inflation and tax impact project appraisal; list the different forms of market efficiency, and interpret the results of key empirical tests of the Efficient Markets Hypothesis; compare and contrast the main sources of financing for a company; explain what is meant by capital structure and dividend policy, and discuss the relevance of each to corporate financial management; explain the importance of financial planning over both the short term and long term; distinguish between spot and forward exchange rates; state and apply the Interest-Rate Parity and Purchasing Power Parity theorems in the context of foreign exchange; define key shareholder ratios (e.g. earnings per share, dividend yield and price-earnings ratio) and use discounted cash-flow techniques to estimate share prices; use discounted cash-flow techniques to value financial securities and/or estimate the value added by capital projects; construct spreadsheets to calculate Net Present Values and Internal Rates of Return; list and challenge the assumptions underpinning each of the key models studied; reflect critically on the limitations of each of the models studied.

Timetabled teaching activities

2 x 1 hour lectures per week, 1 x 1 hour seminar per week

Departmental link

Module assessment

Assessment group Assessment name Percentage
12 CATS (Module code: IB125-12)
D (Assessed/examined work) Assessed Course Work 20%
Examination - Main Summer Exam Period (weeks 4-9) 80%

Module availability

This module is available on the following courses:

  • Undergraduate International Business (N140) - Year 1
  • Undergraduate International Business with Spanish (N1R4) - Year 1
  • BSc in Management (N201) - Year 1
  • BSc in International Management (N203) - Year 1
  • Undergraduate Management (with Foundation Year) (N20A) - Year 2
  • BSc in Management (with Intercalated Year/UPP) (N210) - Year 1
Optional Core
  • Undergraduate Law and Business Studies (MN31) - Year 1
  • Undergraduate Law and Business Studies (MN32) - Year 1
  • Law and Business Four Year (Qualifying Degree) (MN34) - Year 1
  • Undergraduate Law and Business Studies with Intercalated Year (3+1) (MN35) - Year 1
  • Undergraduate Law and Business Studies with Intercalated Year (4+1) (MN36) - Year 1
  • Undergraduate Law and Business Studies (Qualifying Degree) with Intercalated Year (MN37) - Year 1