Unisa businesses accounting cost

MAC4861/102/0/2021
NMA4861/102/0/2021
ZMA4861/102/0/2021




Tutorial Letter 102/0/2020
ADVANCED MANAGEMENT
ACCOUNTING

MAC4861
NMA4861
ZMA4861
Year module

Department of Financial Intelligence
IMPORTANT INFORMATION

This tutorial letter contains important information
about your module.

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MAC/NMA/ZMA4861/102

ADVANCED MANAGEMENT ACCOUNTING

TUTORIAL LETTER

TABLE OF CONTENTS PAGE

MODULE PURPOSE 4

INTRODUCTION AND OVERVIEW 4

PART 1 – STRATEGY, RISK MANAGEMENT AND FINANCING 8

LEARNING UNIT 1 STRATEGY AND GOVERNANCE 9
LEARNING UNIT 1.1 STRATEGY 11
LEARNING UNIT 1.2 CORPORATE GOVERNANCE
AND INTEGRATED REPORTING 20

LEARNING UNIT 2 RISK MANAGEMENT 24
LEARNING UNIT 2.1 RISK THEORY AND APPROACHES TO RISK
MANAGEMENT 26
LEARNING UNIT 2.2 RISK IDENTIFICATION AND
DOCUMENTATION 30
LEARNING UNIT 2.3 RISK ASSESSMENT AND RESPONSES 34

LEARNING UNIT 3 COST OF CAPITAL AND CAPITAL
INVESTMENT APPRAISAL 40
LEARNING UNIT 3.1 WEIGHTED AVERAGE COST OF CAPITAL 43
LEARNING UNIT 3.2 CAPITAL INVESTMENT APPRAISAL –
ISSUES IN INVESTMENT APPRAISAL 49

LEARNING UNIT 4 SOURCES AND FORMS OF FINANCE 58
LEARNING UNIT 4.1 SOURCES AND FORMS OF FINANCE 59
LEARNING UNIT 4.2 THE FINANCING DECISION 62

LEARNING UNIT 5 DIVIDEND DECISION 64
LEARNING UNIT 5.1 DIVIDEND DECISION 66

LEARNING UNIT 6 MANAGEMENT OF WORKING CAPITAL 68
LEARNING UNIT 6.1 MANAGEMENT OF WORKING CAPITAL 70

LEARNING UNIT 7 TREASURY FUNCTION 74
LEARNING UNIT 7.1 TREASURY FUNCTION 75

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TABLE OF CONTENTS (continued) PAGE

PART 2 – FUNCTION OF FINANCIAL MANAGEMENT 79

LEARNING UNIT 8 ANALYSIS AND INTERPRETATION OF
FINANCIAL AND NON-FINANCIAL
INFORMATION 80
LEARNING UNIT 8.1 ANALYSIS AND INTERPRETATION OF
FINANCIAL AND NON-FINANCIAL
INFORMATION 81

LEARNING UNIT 9 BUSINESSES IN DIFFICULTY 83
LEARNING UNIT 9.1 BUSINESSES IN DIFFICULTY 84

LEARNING UNIT 10 VALUATIONS 87
LEARNING UNIT 10.1 VALUATIONS 89

PART 3 – MERGERS & ACQUISITIONS AND BUSINESS PLANS 92

LEARNING UNIT 11 MERGERS AND ACQUISITIONS 93
LEARNING UNIT 11.1 VALUATION FOR PURPOSES OF M&As:
SYNERGIES 95
LEARNING UNIT 11.2 OTHER CONSIDERATIONS 102

LEARNING UNIT 12 BUSINESS PLANS AND FINANCIAL
PROPOSALS 108
LEARNING UNIT 12.1 BUSINESS PLANS AND FINANCIAL
PROPOSALS 109

INTEGRATED SELF-ASSESSMENT 110

INTEGRATED QUESTION 1 110
INTEGRATED QUESTION 2 110

TEST 1 (2020) – MAC4861/NMA4861/ZMA4861 111
TEST 1 (2020) – SUGGESTED SOLUTION 114
TEST 2 (2020) – MAC4861/NMA4861/ZMA4861 117
TEST 2 (2020) – SUGGESTED SOLUTION 120

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MODULE PURPOSE


This module is intended for students who are studying towards a Postgraduate Diploma in Accounting
Sciences (CTA Level 1) and ultimately towards the Certificate in the Theory of Accounting (CTA), a
prerequisite for the professional qualification of Chartered Accountant (SA) (registered with SAICA).
This module is therefore designed to help you develop the prerequisite competencies relating to
Management Decision Making and Control; as well as Strategy, Risk Management, and Financial
Management.


INTRODUCTION AND OVERVIEW
The purpose of this tutorial letter is to provide students with tutorial matter relating to Strategy, Risk
Management and Financial Management. This tutorial letter will build upon your prior knowledge and
introduce a few new concepts relating to strategy, risk and financing. This module will provide authentic
learning opportunities, which will include case studies and relevant scenarios to enhance your
understanding of the principles taught.


PRE-REQUISITES

The learning units contained in this tutorial letter build, to a large extent, upon prior knowledge obtained
in your undergraduate Management Accounting studies. It is therefore assumed that you have achieved
the necessary prior learning.

STRUCTURE OF THIS TUTORIAL LETTER

This tutorial letter is structured as three distinct parts, each containing a number of learning units. A
learning unit is the main study area within a part, and each learning unit is further divided into sub-
learning units. You will find the outcomes that you are required to achieve for each learning unit at the
beginning of each learning unit. Self-assessment activities are provided at the end of each learning unit
so that you can assess whether you have mastered the learning outcomes.

The parts of this tutorial letter are described below:


PART 1 – STRATEGY, RISK MANAGEMENT AND FINANCING (containing learning units 1–7)


PART 2 – FUNCTION OF FINANCIAL MANAGEMENT (containing learning units 8–10)


PART 3 – MERGERS AND ACQUISITIONS, AND BUSINESS PLANS
(containing learning units 11–12)