The Financial Management module (Paper 2.4) is part of the Skills Level (Level 2) in the ICAG professional qualification syllabus. It builds on foundational concepts from the Knowledge Level, focusing on applying financial management techniques to support organizational decision-making, investment appraisal, financing, and risk management. Below is the syllabus coverage in tabular form, including main topics and their approximate weightings (guiding study time and exam mark allocations).
| Syllabus Topic | Description | Weighting (%) |
|---|---|---|
| A. Role and purpose of financial management | Explains the role of financial management in achieving organizational objectives, including financial planning, shareholder value creation, agency theory, and the impact of ethical and sustainability considerations. | 5 |
| B. Financial analysis and performance evaluation | Applies financial analysis techniques, including ratio analysis (profitability, liquidity, gearing, efficiency), trend analysis, and benchmarking to evaluate organizational performance and financial health. | 15 |
| C. Investment appraisal techniques | Uses investment appraisal methods, including net present value (NPV), internal rate of return (IRR), payback period, and accounting rate of return (ARR), to evaluate capital projects, incorporating risk and uncertainty (e.g., sensitivity analysis). | 20 |
| D. Sources of finance and capital structure | Evaluates sources of finance (e.g., equity, debt, retained earnings, venture capital), their costs, benefits, and impact on capital structure, including optimal capital structure and gearing ratios. | 15 |
| E. Cost of capital and valuation | Calculates and applies the cost of capital (e.g., WACC, cost of equity, cost of debt), and uses valuation techniques for businesses, shares, and bonds (e.g., dividend valuation model, net asset valuation). | 15 |
| F. Working capital management | Applies techniques for managing working capital, including cash flow forecasting, inventory management (EOQ, JIT), receivables and payables management, and short-term financing options. | 15 |
| G. Risk management | Identifies and manages financial risks, including foreign exchange risk (hedging, forwards, futures), interest rate risk, and credit risk, using appropriate tools and strategies. | 10 |
| H. Dividend policy and treasury management | Analyzes dividend policies (e.g., residual, stable, zero dividend), their impact on shareholder value, and treasury management functions, including cash management and liquidity planning. | 5 |
