Business Finance Diploma KNEC Notes

Business Diploma KNEC Notes

Introduction to the Module Unit

Business Finance is a unit offered to diploma students in business related courses to equip them with the right attitudes, knowledge and skills to apply concepts of business finance to organizational context.

General Objectives

By the end of this module unit, the learner should be able to:

  • Discuss the types of business organisations
  • Identify various sources of finance and their usefulness in managing a business
  • Explain the role of financial institutions in business management
  • Discuss financial decisions in managing business assets
  • Apply basic financial models in assessing viable investment projects for a business

Topics/Course Outline Required by KNEC

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Topic 1: Nature of Business Finance

1.1. Meaning of Business Finance

1.2. Nature and scope of business finance

1.3. Importance of business finance

1.4. Relationship with other disciplines

Topic 2: Sources of Finance

2.1. Sources of business finance

2.2. Criteria used to choose sources of finance

2.3. Methods of raising finance

Topic 3: Cost of Finance

3.1. Definition of finance

3.2. Importance of cost of finance

3.3. Components of cost of finance

3.4. Specific cost of finance

3.5. Weighted average cost of capital

Topic 4: Financial institutions in Kenya

4.1. Financial institutions in Kenya

4.2. Functions of Financial Institutions in Kenya

4.3. Role of financial institutions in Kenya

4.4. Factors that have led to rapid growth of financial institutions

4.5. Factors leading to failure of indigenous financial institutions

Topic 5: Working Capital Management

5.1. Definition of working capital management

5.2. Types of working capital management

5.3. Calculation of working capital management

5.4. Sources of financing

5.5. Mechanism of controlling working capital

Topic 6: Time Value of Money

6.1. Definition of time value of money

6.2. Importance of time value of money

6.3. Future value of money

6.4. Present value of money

6.5. Loan amortization

Topic 7: Investment Decisions

7.1. Meaning of the concept of investments

7.2. Meaning of investment appraisal techniques

7.3. Importance of investment appraisal techniques

7.4. Techniques of investment appraisal

7.5. Limitations of investment appraisal techniques

Topic 8: Financial Ratio Analysis

8.1. Ratio Analysis

8.2. Types of Ratios

8.3. Limitations of Ratios

Topic 9: Emerging Trends and Issues in Business Finance

11.1. Emerging Issues and trends in Business Finance

11.2. Challenges posed by emerging trends and issues in Business Finance

11.3. Coping with challenges posed by emerging trends and issues in business finance

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