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Level 6 Diploma in Business Management

Financial Performance Metrics and Long-Term Sustainability

BM604 · Financial Decision Making — Week 5 of 16

CourseBM604
Week5 of 16
SemesterII
TutorOnline in the course chat

This week’s topics

Financial Performance Metrics and Long-Term Sustainability

  1. Return on Capital Employed (ROCE)
  2. Earnings Per Share (EPS) and dividend metrics
  3. Gearing and profitability ratios
  4. Sustainable growth rate modelling
  5. Capital Structure and Financial Ratios – Other financial ratios - ACCA Financial Management (FM)
  6. CIMA F3 Evaluation of financial objectives - Ratios and growth trends
  7. Capital Structure and Financial Ratios – Financial Gearing - ACCA Financial Management (FM)

What you will be able to do

  • 2.3 Interpret financial information in balance sheets, income statements as well as sources and applications of funds statements.
  • 4.3 Evaluate the significance of Return on capital Employed (ROCE), Earnings Per Share (EPS) and other overall performance measures for the long-term sustainability of businesses.

Activity

Start with this week’s 3 videos, then: Seminar, guided reading and a short written task: interpret financial information in balance sheets, income statements as well as sources and applications of funds statements.

Study materials

Videos

  • Capital Structure and Financial Ratios – Other financial ratios - ACCA Financial Management (FM) · YouTube · OpenTuition · 28 min · for registered students
  • CIMA F3 Evaluation of financial objectives - Ratios and growth trends · YouTube · OpenTuition · 12 min · for registered students
  • Capital Structure and Financial Ratios – Financial Gearing - ACCA Financial Management (FM) · YouTube · OpenTuition · 27 min · for registered students
  • Session 6A: Financial Ratios (Examples) · YouTube · Aswath Damodaran · 17 min · for registered students
  • Sustainable Growth in Equity Earnings: Dataset Support · YouTube · Aswath Damodaran · 5 min · for registered students
  • Sustainable Growth in Operating Income: Dataset Support · YouTube · Aswath Damodaran · 6 min · for registered students
  • Session 10: Growth Rates and Terminal Value · YouTube · Aswath Damodaran · 83 min · for registered students

Further resources

  • Intermediate Financial Accounting Vol. 2, Lyryx 2021-A, ch. 19: Earnings per Share · PDF · Other, textbook chapter; pp. 275–310 · for registered students
  • Introduction to Financial Accounting, Lyryx 2023-A, ch. 12: Financial Statement Analysis · PDF · Other, textbook chapter; pp. 489–532 · for registered students
  • Principles of Finance 2e, ch. 6: Measures of Financial Health · PDF · OpenStax, textbook chapter; pp. 175–200 · for registered students
Materials marked “for registered students” open in the student portal, which is set up as soon as you receive final acceptance.
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Admitted students ask questions on this week’s page in the student portal: an AI assistant trained on the course answers first, and during the course’s timetabled classes Connect to your tutor brings your tutor into the chat, who may start a call if needed.

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Course plan
  • Week 1: Strategic Business Decision Making and Financial Drivers
  • Week 2: Business Risk Assessment in Financial Decisions
  • Week 3: Accounting Foundations and Expenditure Classification
  • Week 4: Structure and Interpretation of Final Accounts
  • Week 5: Financial Performance Metrics and Long-Term Sustainability
  • Week 6: Sources and Selection of Business Finance
  • Week 7: Capital Expenditure Appraisal Techniques
  • Midterm: Midterm evaluation
  • Week 9: Off-Balance Sheet Financing and Risk Management
  • Week 10: Ownership Structures, Governance and Agency Dynamics
  • Week 11: Ethics, Governance Controls and Financial Accountability
  • Week 12: Applying Financial Decision Making in practice: case studies
  • Week 13: Assignment workshop: research, planning and referencing
  • Week 14: Assignment workshop: drafting, feedback and improvement
  • Week 15: Review and coursework completion
  • Final: Final assessment and submission
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