MAC3702
EXAM PACK
EXAM REVISION PACK
TOPIC 1-7 EXAM REVISION NOTES
QUESTIONS & ANSWER PACK
INCLUDED
, LECTURE NOTES
LECTURER:
Nadia Janse van Rensburg
MODULE:
MAC3702
TOPIC 1:
Advance analysis of information
Shop U21, Stoneridge Centre, 1 Stoneridge Drive, Greenstone Park, Edenvale, Johannesburg, 1610
Postnet Suite #448, Private Bag x10010, Edenvale, 1610 • www.ebs.co.za • Company Registration 2012/018470/0
, 2
Table of Contents
Introduction..................................................................................................................................... 2
Business risk and financial risk............................................................................................... 6
Ratio analysis .................................................................................................................................. 9
Failure prediction (businesses in difficulty)................................................................ 23
Questions ....................................................................................................................................... 26
MAC3702
Topic 1
Nadia Janse van Rensburg
, 3
Introduction
Financial management
FINANCIAL MANAGEMENT
Objective: Maximising long term sustainable wealth
(Cost of financing < Return on investments)
FINANCING DECISIONS INVESTMENT
Objective: Obtaining funds with the minimum DECISIONS
effective cost Objective: Investing in
sustainable projects with
maximum long term
returns
Forms of equity Forms of loan Investment
finance finance/debt opportunities
-Issued share capital -Debentures -Capital assets
-Retained income -Mortgage bonds -Replacement of assets
-Preference shares -Long term loans -Mergers
(Convertible) -Instalment sale -Acquisitions
-Lease finance -Restructuring
-Preference shares (not
convertible)
Techniques: Techniques:
-Effective cost of finance -Time value of money
-Time value of money -Capital budgeting
-Valuation methods
Goal of an entity
1. Shareholders wealth maximisation
In the 1990’s business entities often cited their main goal as maximising
of shareholders wealth, and it became common for company boards to
focus on shareholder value, thereby maximising returns to shareholders.
MAC3702
Topic 1
Nadia Janse van Rensburg
EXAM PACK
EXAM REVISION PACK
TOPIC 1-7 EXAM REVISION NOTES
QUESTIONS & ANSWER PACK
INCLUDED
, LECTURE NOTES
LECTURER:
Nadia Janse van Rensburg
MODULE:
MAC3702
TOPIC 1:
Advance analysis of information
Shop U21, Stoneridge Centre, 1 Stoneridge Drive, Greenstone Park, Edenvale, Johannesburg, 1610
Postnet Suite #448, Private Bag x10010, Edenvale, 1610 • www.ebs.co.za • Company Registration 2012/018470/0
, 2
Table of Contents
Introduction..................................................................................................................................... 2
Business risk and financial risk............................................................................................... 6
Ratio analysis .................................................................................................................................. 9
Failure prediction (businesses in difficulty)................................................................ 23
Questions ....................................................................................................................................... 26
MAC3702
Topic 1
Nadia Janse van Rensburg
, 3
Introduction
Financial management
FINANCIAL MANAGEMENT
Objective: Maximising long term sustainable wealth
(Cost of financing < Return on investments)
FINANCING DECISIONS INVESTMENT
Objective: Obtaining funds with the minimum DECISIONS
effective cost Objective: Investing in
sustainable projects with
maximum long term
returns
Forms of equity Forms of loan Investment
finance finance/debt opportunities
-Issued share capital -Debentures -Capital assets
-Retained income -Mortgage bonds -Replacement of assets
-Preference shares -Long term loans -Mergers
(Convertible) -Instalment sale -Acquisitions
-Lease finance -Restructuring
-Preference shares (not
convertible)
Techniques: Techniques:
-Effective cost of finance -Time value of money
-Time value of money -Capital budgeting
-Valuation methods
Goal of an entity
1. Shareholders wealth maximisation
In the 1990’s business entities often cited their main goal as maximising
of shareholders wealth, and it became common for company boards to
focus on shareholder value, thereby maximising returns to shareholders.
MAC3702
Topic 1
Nadia Janse van Rensburg
