Financial Management

Banking and Finance · Level 6  ·  8 Chapters

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What Financial Management covers

In this unit, you will be able to confidently navigate the world of finance by identifying and evaluating various sources of finance and financial markets according to regulatory standards. You will gain the skills to analyze financial institutions and Islamic finance principles, applying your knowledge to make informed decisions that support organizational goals. By mastering concepts like the time value of money, you’ll be equipped to contribute effectively to financial management in real-world trade settings.

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Careers after Financial Management

Understanding financial management opens doors to a wide range of opportunities across Kenya’s dynamic economy. Whether you dream of working in a bustling Nairobi bank, managing finances for a tea factory in Kericho, or running your own business in the vibrant jua kali sector, mastering these skills will empower you to make smart financial decisions that fuel growth and sustainability.

  • In Kenya’s banking sector, including institutions regulated by the Capital Markets Authority (CMA), your ability to identify and evaluate sources of finance is crucial for roles in loan management, investment advising, and risk assessment.
  • County governments rely on skilled financial managers to allocate budgets effectively, ensuring development projects like road construction, water supply, and health services are well-funded and transparent.
  • In the agribusiness sector, companies like KTDA (Kenya Tea Development Agency) require experts who understand financial markets and institutions to secure funding for farmers and optimize returns.
  • The matatu industry and jua kali artisans benefit from entrepreneurs who can navigate financial markets to access microfinance loans or savings schemes, helping them expand and improve their businesses.
  • KenGen and other energy firms need financial analysts who can evaluate investment options and manage capital to support Kenya’s growing demand for electricity.
  • Hospitality businesses in tourist hotspots like Mombasa and Maasai Mara thrive when financial managers optimize cash flow, manage credit, and plan for expansion.
  • Self-employment opportunities abound as you can start your own consultancy offering financial management services, helping SMEs comply with CMA regulations and secure funding.

By mastering financial management within the regulatory framework of Kenya’s capital markets, you position yourself as a valuable asset in any sector. This skill not only boosts your employability but also equips you to build and sustain your own ventures, shaping a prosperous and financially secure future. Keep learning, because your financial expertise will be the foundation of your success.

Chapters

What Financial Management covers: 50 main topics in 8 chapters

1. Identify finance sources

  1. 1.1 Sources of finance Interviews sources
  2. 1.2 Classification of sources of finance
  3. 1.3 Criteria for evaluating financial sources
  4. 1.4 Evaluating financial sources

2. Evaluate financial markets and institutions

  1. 2.1 Financial markets Interviews
  2. 2.2 Categories of financial markets
  3. 2.3 Financial markets evaluation
  4. 2.4 Financial institutions
  5. 2.5 Financial institutions analysis
  6. 2.6 Financial institutions evaluation
  7. 2.7 Islamic financial principles and trends
  8. 2.8 Islamic financial returns analysis

3. Evaluate time value of money

  1. 3.1 Time value of money Interviews
  2. 3.2 Importance of time value of money
  3. 3.3 Methods of analyzing time value of money
  4. 3.4 Discounting factor (PVIF)
  5. 3.5 Compounding factor (FVIF)
  6. 3.6 Annuities and perpetuities
  7. 3.7 Loan amortization
  8. 3.8 Evaluation of time value of money

4. Analyze risk and return

  1. 4.1 Risk and returns
  2. 4.2 Components of risk and return
  3. 4.3 Risk and return for a single asset
  4. 4.4 Measures of risks
  5. 4.5 Risk and returns analysis

5. Evaluate cost of capital

  1. 5.1 Meaning of capital
  2. 5.2 Cost of Capital
  3. 5.3 Components of cost of capital
  4. 5.4 Weighting costs of capital components
  5. 5.5 Costs of capital analysis
  6. 5.6 Weighted average cost of capital
  7. 5.7 Marginal cost of capital
  8. 5.8 Optimal capital structure

6. Analyze capital budgeting decisions

  1. 6.1 Capital budgeting
  2. 6.2 Methods of capital budgeting
  3. 6.3 Analysis of capital budgeting
  4. 6.4 Selection of investment techniques
  5. 6.5 Investment projects appraisal

7. Evaluate working capital

  1. 7.1 Working capital
  2. 7.2 Components of working capital
  3. 7.3 Sources of working capital
  4. 7.4 Operating cash cycle
  5. 7.5 Cash optimal levels
  6. 7.6 Analysis of receivables
  7. 7.7 Inventory analysis
  8. 7.8 Inventory levels

8. Formulate dividend decisions

  1. 8.1 Dividends
  2. 8.2 Evaluation of dividend policies
  3. 8.3 Forms of dividend payment
  4. 8.4 Optimal dividend payout

Revise this unit

3 more for this unit

Beyond the syllabus

Other units in Module III