ICM252-Strategic Planning and Budgeting

Module Provider: ICMA Centre
Number of credits: 10 [5 ECTS credits]
Level:7
Terms in which taught: Spring term module
Pre-requisites:
Non-modular pre-requisites:
Co-requisites:
Modules excluded:
Module version for: 2016/7

Email: r.thornton@icmacentre.ac.uk

Summary module description:

Aims:
In order to raise capital from financiers or secure funding via government grants it is always necessary to produce a robust financial plan. This plan will then be used as a yardstick by all parties to monitor the performance of the business. Typically a detailed twelve month plan is required in addition to a summary level five year plan. Typically these plans will include comprehensive sections on revenue forecasts, profit and loss, cash flows, balance sheet, capex, financing and a commentary with further detail to help explain the figures. The aim of the module is to introduce students to the practicalities of developing and utilising financial models with a view to achieving the overall strategic objectives of an organisation. Students will also gain a thorough understanding of the interaction between the separate statements within a financial model.

Assessable learning outcomes:
By the end of the module it is expected that students will be able to: • Understand the needs and use of detailed Strategic Planning and Budgeting • Assess the elements that are required for a plan to adequately support business aims • Identify the key sources of information available to develop a suitable model • Prepare a detailed business model with a view to securing funding • Use and develop that model to support business objectives in a dynamic environment

Additional outcomes:
Students will gain experience of team working and recognize how departments exist in a symbiotic relationship within an organization.

Outline content:
• The components of organisational strategy, the need for Strategic Planning and Budgeting and the role it serves for different parties. • The statements contained within a financial model and the interaction between those statements. • Banking covenants and aiding compliance • Planning as an aid to identify potential cash shortfalls and mitigate future uncertainties • Links between long term and short term borrowings • Initial detail required to commence the preparation of a financial plan • Revenue and expenditure planning • Working capital modelling and integration • Capital expenditure cycle and integration • Management support and incentivisation • Plan development for twelve month and five year time frames • Sources of information • Plan monitoring. Rolling forecasts and amendments to the model • Whole business monitoring versus project modelling

Brief description of teaching and learning methods:
The core theory and concepts will be presented during lectures. Small class groups will discuss mini-cases based on specific companies or issues.

Other information on summative assessment:
Coursework
1 hour multiple choice test 20%
The preparation of an example financial appraisal profile report 20%
2 hours closed book written examination (answer three questions from a choice of five) 60%

Formative assessment methods:

Penalties for late submission:
Penalties for late submission on this module are in accordance with the University policy. Please refer to page 5 of the Postgraduate Guide to Assessment for further information: http://www.reading.ac.uk/internal/exams/student/exa-guidePG.aspx

Length of examination:
2 hours.

Requirements for a pass:
50% weighted average mark

Reassessment arrangements:
By written examination only, as part of the overall examination arrangements for the MSc programme.

Additional Costs (specified where applicable):
1) Required text books: 1. Financial Management by Geoffrey Knott ISBN 1-4039-0382-4 - £39.99 paperback
2. Mastering Financial management by John Whitley - ISBN 978-1-4039-1336-4 - £19.99 paperback
3. The Financial Appraisal Profile model by Frank Lesley &Bob Ryan - ISBN 1-4039-4752- X - £78 hard back
4. Financial Planning Models - Construction and Use - by G. Roland Kaye - 1994, ISBN 0-12-403770-4, £30."

Last updated: 21 December 2016