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Financial analysis and decision making

Drawing upon realistic examples and scenarios, this module will help you to understand effective financial decision making within organisations. You'll learn how financial capital can be raised and allocated, how to evaluate investment projects, as well as how to value stocks, bonds and real estate. You'll also explore the advantages and disadvantages of the most commonly used derivative instruments. If you have, or plan to pursue, a managerial position either in a private or public organisation, or if you simply want to understand more about how to plan your personal finances and invest wisely, this module will provide a solid foundation for the decision-making challenges you may face.

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OU qualifications are modular in structure; the credits from this undergraduate module could count towards a certificate of higher education, diploma of higher education, foundation degree or honours degree.

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Module code




  • Credits measure the student workload required for the successful completion of a module or qualification.
  • One credit represents about 10 hours of study over the duration of the course.
  • You are awarded credits after you have successfully completed a module.
  • For example, if you study a 60-credit module and successfully pass it, you will be awarded 60 credits.

Study level

Across the UK, there are two parallel frameworks for higher education qualifications, the Framework for Higher Education Qualifications in England, Northern Ireland and Wales (FHEQ) and the Scottish Credit and Qualifications Framework (SCQF). These define a hierarchy of levels and describe the achievement expected at each level. The information provided shows how OU module levels correspond to these frameworks.
Level of Study
2 8 5

Study method

Module cost

Entry requirements

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What you will study

The module consists of the following six units, each of which lasts between two and three weeks:

Unit 1 – Organisational goals and financial decision making
In this introductory unit, you'll be provided with a broad overview of the various types of organisations that feature in today’s economy. You'll appreciate how they differ in terms of their overall purpose and, therefore, in some aspects of their operations. In exploring the financial management environment, you will learn about the role financial managers play in helping organisational strategies succeed. Finally, you'll consider the responsibilities of financial managers and the major decision areas that confront them. 

Unit 2 – Organisations and the financial system
In this unit, you'll be introduced to the main sources of finance available to organisations, such as bank finance, crowdfunding and venture capital. You'll also consider the related specific opportunities and constraints in an accessible and contextualized manner. The key features of the ‘financing mix’ available to the various types of organisations will be elucidated, along with the relationships that can be built with capital markets. Finally, you'll discover the different ways in which organisations can allocate the financial resources raised, such as capital expenditure, share repurchase and mergers and acquisitions (M&As).

Unit 3 – Time value of money and cost of capital
In this unit, you'll be introduced to the concepts of risk, time value of money and cost of capital. Although it is impossible to exactly calculate the effects of uncertainty on investment projects, tools for quantifying risk are available. You'll cover the quantitative techniques that are the building blocks of the financial literature on risk and discount rate estimations. The unit will also discuss the Weighted Average Cost of Capital (WACC), which gives the base discount rate that a company should use for investment appraisal. 

Unit 4 – Investment appraisal 
In this unit, you'll focus on making financial decisions for long term investments using investment appraisal techniques and will build on the concept of time value of money. In particular, you will be introduced to the four most commonly used investment appraisal techniques, namely: Payback, Accounting Rate of Return (ARR), Net Present Value (NPV) and Internal Rate of Return (IRR). The advantages and limitations of each of these methods will be discussed, as well as their relevance to analyse the economic viability of long-term projects. Upon completion of the unit, you will be able to answer questions such as: should the business launch a new project or invest in a new machine? You will also look at some practical examples, and touch on other issues in investment appraisal such as non-financial factors. 

Unit 5 – Asset valuation techniques
In this unit, you'll consider the most popular approaches to equity valuation such as net asset value, dividend- and cash flow-related techniques, as well as relative valuation approaches. Understanding the forces that drive the price of equity is of great practical importance, since it allows stock market investors to determine whether a particular company is a good buy. Furthermore, it informs managers on how to best follow strategies that maximise shareholder value. As will be illustrated, the valuation techniques covered here could also be successfully employed in the context of bonds and real estate. 

Unit 6 – Risk management
In this unit, you'll be introduced to the most commonly used derivative instruments, their contractual characteristics and payoff structure. When used correctly, these instruments can provide cheap insurance for companies and investors alike. The design of hedging methods, which are intended to mitigate or eliminate risk, will be elucidated. Even if derivatives are an invaluable tool in the domain of risk management, they can be dangerous when used for speculation purposes. This unit will illustrate these dangers and provide examples of massive losses that have been made by some imprudent market participants. 

Vocational relevance

This module will cover the key financial skills that are vital for driving success in organisations. Regardless of the role or function that you may perform, being able to understand the key features of financing and investing processes, as well as assess the value and the risks associated with organisational activities, is crucial to effective financial decision making.

Teaching and assessment

Support from your tutor

Throughout your module studies, you’ll get help and support from your assigned module tutor. They’ll help you by:

  • marking your assignments (TMAs) and providing detailed feedback for you to improve
  • guiding you to additional learning resources
  • providing individual guidance, whether that’s for general study skills or specific module content
  • facilitating online discussions between your fellow students, in the dedicated module and tutor group forums.

Module tutors also run online tutorials throughout the module. Where possible, recordings of online tutorials will be made available to students. While these tutorials won’t be compulsory for you to complete the module, you’re strongly encouraged to take part. If you want to participate, you’ll likely need a headset with a microphone.


The assessment details for this module can be found in the facts box above.

You are requested to use the online eTMA system to submit your tutor-marked assignments (TMAs). You will also be required to submit your end-of module assessment (EMA) online. Furthermore, the module incorporates six formative interactive computer-marked assignments (iCMAs).

Future availability

Financial analysis and decision making starts once a year – in April. This page describes the module that will start in April 2023. We expect it to start for the last time in April 2027.


As a student of The Open University, you should be aware of the content of the academic regulations which are available on our Student Policies and Regulations website.

    Course work includes:

    2 Tutor-marked assignments (TMAs)
    End-of-module assessment
    No residential school

    Entry requirements

    There are no formal entry requirements to study this module but, as it requires an aptitude for analytical and quantitative methods to engage with theories of finance and their applications, it’s very important you are comfortable with:

    • basic mathematical operations, such as addition, subtraction, multiplication and division;
    • powers of numbers including square roots;
    • using your scientific calculator effectively for the above;
    • simple mathematical equations;
    • negative numbers and fractions;
    • drawing and interpreting simple charts and graphs;
    • use of Excel to perform basic calculations.

    This self-assessment quiz can help you check your understanding of the numerical skills required to study this module. Your final score will indicate whether you would benefit from any further preparation before tackling the numerical parts of the module.

    If you have any doubt about the suitability of the module, please speak to an adviser.


    Start End England fee Register
    06 Apr 2024 Sep 2024 £1731.00

    Registration closes 07/03/24 (places subject to availability)

    This module is expected to start for the last time in April 2027.

    Additional Costs

    Study costs

    There may be extra costs on top of the tuition fee, such as set books, a computer and internet access.

    If your income is not more than £25,000 or you are in receipt of a qualifying benefit, you might be eligible for help with some of these costs after your module has started.

    Ways to pay for this module

    Open University Student Budget Account

    The Open University Student Budget Accounts Ltd (OUSBA) offers a convenient 'pay as you go' option to pay your OU fees, which is a secure, quick and easy way to pay. Please note that The Open University works exclusively with OUSBA and is not able to offer you credit facilities from any other provider. All credit is subject to status and proof that you can afford the repayments.

    You pay the OU through OUSBA in one of the following ways:

    • Register now, pay later – OUSBA pays your module fee direct to the OU. You then repay OUSBA interest-free and in full just before your module starts. 0% APR representative. This option could give you the extra time you may need to secure the funding to repay OUSBA.
    • Pay by instalments – OUSBA calculates your monthly fee and number of instalments based on the cost of the module you are studying. APR 5.1% representative.

    Joint loan applications

    If you feel you would be unable to obtain an OUSBA loan on your own due to credit history or affordability issues, OUSBA offers the option to apply for a joint loan application with a third party. For example, your husband, wife, partner, parent, sibling or friend. In such cases, OUSBA will be required to carry out additional affordability checks separately and/or collectively for both joint applicants who will be jointly and severally liable for loan repayments.

    As additional affordability checks are required when processing joint loan applications, unfortunately, an instant decision cannot be given. On average the processing time for a joint loan application is five working days from receipt of the required documentation.

    Read more about Open University Student Budget Accounts (OUSBA).  

    Employer sponsorship

    Studying with The Open University can boost your employability. OU courses are recognised and respected by employers for their excellence and the commitment they take to complete. They also value the skills that students learn and can apply in the workplace.

    More than one in ten OU students are sponsored by their employer, and over 30,000 employers have used the OU to develop staff so far. If the module you’ve chosen is geared towards your job or developing your career, you could approach your employer to see if they will sponsor you by paying some or all of the fees. 

    • Your employer just needs to complete a simple form to confirm how much they will be paying and we will invoice them.
    • You won’t need to get your employer to complete the form until after you’ve chosen your module.  

    Credit/debit card

    You can pay part or all of your tuition fees upfront with a debit or credit card when you register for each module. 

    We accept American Express, Mastercard, Visa and Visa Electron. 

    Mixed payments

    We know that sometimes you may want to combine payment options. For example, you may wish to pay part of your tuition fee with a debit card and pay the remainder in instalments through an Open University Student Budget Account (OUSBA).

    Please note: your permanent address/domicile will affect your fee status and therefore the fees you are charged and any financial support available to you. The fee information provided here is valid for modules starting before 31 July 2024. Fees normally increase annually. For further information about the University's fee policy, visit our Fee Rules

    This information was provided on 09/06/2023.

    Can you study an Access module for free?

    In order to qualify, you must:

    1. be resident in England
    2. have a personal income of less than £25,000 (or receive qualifying benefits)
    3. have not completed one year or more on any full-time undergraduate programme at FHEQ level 4 or above, or completed 30 credits or more of OU study

    How to apply to study an Access module for free

    Once you've started the registration process, either online or over the phone, we'll contact you about your payment options. This will include instructions on how you can apply to study for free if you are eligible.

    If you're unsure if you meet the criteria to study for free, you can check with one of our friendly advisers on +44 (0)300 303 0069 or you can request a call back.

    Not eligible to study for free?

    Don't worry! We offer a choice of flexible ways to help spread the cost of your Access module. The most popular options include:

    • monthly payments through OUSBA
    • part-time tuition fee loan (you'll need to be registered on a qualification for this option)

    To explore all the options available to you, visit Fees and Funding.

    What's included

    All materials and tuition are available via the module website.

    Computing requirements

    You’ll need broadband internet access and a desktop or laptop computer with an up-to-date version of Windows (10 or 11), or macOS (11 'Big Sur' or higher).

    Any additional software will be provided or is generally freely available.

    To join in spoken conversations in tutorials, we recommend a wired headset (headphones/earphones with a built-in microphone).

    Our module websites comply with web standards, and any modern browser is suitable for most activities.

    Our OU Study mobile app will operate on all current, supported versions of Android and iOS. It’s not available on Kindle.

    It’s also possible to access some module materials on a mobile phone, tablet device or Chromebook. However, as you may be asked to install additional software or use certain applications, you’ll also require a desktop or laptop as described above.

    If you have a disability

    The OU strives to make all aspects of study accessible to everyone and this Accessibility Statement outlines what studying B294 involves. You should use this information to inform your study preparations and any discussions with us about how we can meet your needs.

    To find out more about what kind of support and adjustments might be available, contact us or visit our Disability support website.