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Accessibility statement
Qualification dates
StartEnd
03 Apr 2027Sept 2027
This module helps you understand effective financial decision-making within organisations, using realistic examples and scenarios. You'll learn how financial capital can be raised and allocated, how to evaluate investment projects, and 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 simply want to understand more about how to plan your personal finances and invest wisely, this module provides a solid foundation for the decision-making challenges you may face.
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 its 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 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 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.
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 that you are comfortable with:
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.
You’ll get help and support from an assigned tutor throughout your module.
They’ll help by:
Online tutorials run throughout the module. While they’re not compulsory, we strongly encourage you to participate. Where possible, we’ll make recordings available.
Course work includes:
All materials and tuition are available via the module website, which includes:
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.
Financial analysis and decision making starts once a year – in April.
This page describes the module that will start in April 2027.
We expect it to start for the last time in April 2028.
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