Accounting and Finance MSc

• Professor Yacine Belghitar

This core module provides a foundation in the essentials of corporate financial management. The course focuses on three principal aspects of corporate finance: the investment decision; the cost of capital; and the financing and payout decisions. Based on recent theoretical and empirical developments, the course explores the framework in which corporations make their financial and investment decisions.

• The Objective Function for Corporations
• Corporate Governance
• Making Investment Decisions with the NPV Rule
• Valuing Bonds and Common Stocks
• Introduction to Risk and Return
• Portfolio Theory and the CAPM
• How Corporations Issue Securities
• Capital Structure
• Payout Policy

On successful completion of this module a student should be able to:

1. Evaluate the impact of the separation of corporate ownership, management and control.
2. Appreciate and incorporate risk in project appraisal and investment.
3. Estimate and evaluate the capital structure and dividend policy of the company.
4. Understand and appreciate the complexity and contradictions of the current academic literature in financial management and its implications for professional practice.

• Dr Matthias Nnadi

The module builds on the introductory concepts developed in the Financial Accounting module. This module aims to equip students with advanced financial accounting techniques to prepare financial statements of listed companies in compliance with the requirements of the International Accounting Standards.

• Regulatory and conceptual framework of financial reporting.
• Accounting for assets and liabilities.
• Reporting of financial performance.
• Group accounts and business combinations.
• Sustainability reporting and accounting for climate change.

On successful completion of this module a student should be able to:

1. Demonstrate a comprehensive knowledge and critically discuss the theoretical framework and principles of financial reporting in a global context.
2. Evaluate the application of International Financial Reporting Standards to the disclosure of specific assets and liabilities.
3. Critically prepare financial statements of a listed company in accordance with the International Financial Reporting Standards.
4. Apply the International Financial Reporting Standards to group accounts and business combinations.
5. Evaluate innovations in financial reporting including integrated reports, sustainability reporting and accounting disclosure for climate change.

• Dr Matthias Nnadi

This module is designed to develop knowledge and skills that will enable you to apply management accounting techniques to support the strategic and operational decision making. The module focuses on the management and cost accounting fundamentals and the application of management accounting tools for planning, decision making, control and performance evaluation.

• Cost concepts and costing techniques.
• Cost-Volume-Profit analysis & relevant costing.
• Theory and practice of pricing.
• Budgeting and variance analysis.
• Performance measurement and analysis.

On successful completion of this module a student should be able to:

1. Demonstrate a broad knowledge of fundamental cost and management accounting concepts.
2. Devise and apply different types of revenue and cost analysis for supporting operational and strategic decisions.
3. Critically design and prepare budgets and perform variance analysis for strategic planning and control.
4. Apply and evaluate various performance measurement and management tools in strategic management context.

• Dr Nemanja Radic

Finance is a highly quantitative subject and this core programme provides the relevant mathematical and statistical training necessary to be able to conduct appropriate empirical studies and apply theoretical financial models in practice.

The module will cover probability theory, sampling and estimation, hypothesis testing, regression analysis, and panel analysis.

On successful completion of this module a student should be able to:

1. Critically evaluate probability distributions and their properties.
2. Assess various population parameters and their point and interval estimates.
3. Formulate null and alternate hypotheses, and to conduct a test of hypothesis about a population mean as well as a population proportion.
4. Critically assess and apply a variety of statistical techniques for data analysis (i.e., OLS, logistic regression and regression with panel data).
5. Examine and asses financial theory and related empirical work covered in other subjects within the programme.

• Dr Matthias Nnadi

The key objective for this course is that students develop a clear understanding of the basics of accounting. By the end of the course, students would be able to interpret accounting information with confidence and use it to make decisions and be able to communicate accounting numbers to others.

The course is split approximately 50/50 between Financial Accounting and Management Accounting.

Financial Accounting covers the preparation and presentation of accounts by firms for outside parties such as shareholders or creditors. Such preparation is governed by certain fundamental principles and various rules.

The first part of the lectures will cover accounting principles and provide understanding on how the key financial statements (income statement, balance sheet, cash flow statement) are prepared.

The module also covers the interpretation of financial statements. This involves learning financial ratio analysis and interpreting the information contained in a full set of annual accounts.

The last sessions are devoted to Management Accounting and cover internal accounting by managers for planning and control. Students will cover the nature and classification of costs, break-even analysis, allocation of overheads; preparing and using budgets, variance analysis.

On successful completion of this module a student should be able to:

1. Demonstrate understanding of the fundamental principles of financial accounting and prepare key financial statements from basic information.
2. Critically analyse and interpret company accounts.
3. Evaluate the different types of costs and conduct break even analysis.
4. Critically discuss the different ways in which overheads can be allocated.
5. Prepare budgets and interpret variances from budget.

• Professor Constantinos Alexiou

To introduce the concepts and techniques of Microeconomics (e.g. market analysis, price theory, rationality)  and Macroeconomics (e.g. inflation, exchange rates and interest rates) in a way which provides a core foundation for later applied financial analysis in a range of other core and elective courses on the MSc in Finance and Management and MSc in Investment Management. 

In the Context of the Financial markets, it is imperative that students be aware of the fundamental principles and concepts pertaining to Economic Theory per se. Studying economics not only does it provide knowledge for making decisions but it also offers a tool with which to approach questions such as the desirability of a particular financial investment opportunity, the benefits and costs of alternative careers, or the likely impacts of public policies.

The initial few sessions are spent on discussion of the concept of equilibrium as it applies to the micro and macro structures of a broad range of financial markets. In the next four sessions, an understanding of choice theory and rational economic decision making as it applies to the levels and structure of prices of assets in a broad range of financial markets is developed. Finally, remaining sessions are devoted to discussion of the concepts and ideas in macroeconomics which have a direct relevance to financial markets. Particularly, discussion is centered on understanding of monetary economics and the institutional context to which it applies. Discussion of structure of money and capital markets rounds up this module.

On successful completion of this module a student should be able to:

1. Assess the concept of equilibrium as it applies to the micro and macro structures of a broad range of financial markets.
2. Discuss and justify the rationale of choice theory and rational economic decision making as it applies to the levels and structure of prices of assets in a broad range of financial markets.
3. Appraise the monetary institutional context as this is reflected by money and capital markets.
4. Examine the use of relevant geometric and quantitative models to explain and analyse monetary and financial phenomena.
5. Assess and effectively discuss real world problems that relate to global financial markets.

• Dr Lakshmy Subramanian

The aims of this module are to equip students with the skills, techniques and knowledge to:

• Assess the role of Banking in the wider Economy;
• Develop knowledge and skills of pricing financial products and services and evaluate how pricing decisions can be influenced by the changing competitive landscape.
• Examine the changing landscape of the payment ecosystem which are usually the gateway for innovations and appreciate the innovations relating and conditions for success.
• Grasp nuances of the dynamic lending environment, especially in a digital age, and evaluate how customers perception about lending is evolving.
• Examine the personal and private banking landscape in the digital age, the challenges that have been encountered, and the effects on banks and the ways customers interact with their banks.

The core elements of the module are:

• Retail banking products and services
• Pricing of financial products and services
• Payment ecosystem
• Credit and Lending
• Private and Personal banking

On successful completion of this module a student should be able to:

1. Critique the evolving role of payments and the role of technology
2. Compare and contrast the various pricing decisions embraced by banks and other financial service organisations
3. Examine how retail banks can prepare in advance for the impact of external events and influences in offering high-quality, cost-effective and sustainable services.
4. Differentiate between a range of lending customer types, needs, etc and apply frameworks for an enhanced responsible relationship management strategy for a variety of bank customer segments.

• Dr Vineet Agarwal

This module is designed to provide participants with the required skills for structuring their research projects including conceptualising research questions and writing literature reviews. It uses the positivist approach to finance and introduces the need for and validity of empirical models. The module also imparts a greater understanding of the empirical methods in finance and develops important skills in the assessment, analysis and interpretation of published financial research.

• Formulating research questions.
• Critically reviewing the literature.
• Asset pricing tests using cross-sectional and time-series regressions.
• Time-series analysis (stationarity, unit roots, and cointegration).
• Generalised Method of Moments.
• Event study method.

On successful completion of this module a student should be able to:

1. Conceptualise and formulate research questions.
2. Identify, compile, and critically evaluate relevant literature.
3. Select and assess a range of methodologies employed in empirical finance.
4. Assess the limitations of empirical methodologies and draw robust conclusions from empirical studies.
5. Design and conduct empirical research.

• Dr Nemanja Radic

The course begins in Part I with an overview of the international financial markets, the major financial institution participants and product types. You will understand the roles, motivations and behaviours of market players including the importance of risk-taking. The role of regulation will be highlighted and examined in Part II. This will include the aims and structures of regulation. In Part III, you will examine, using a seminal textbook on business ethics the role and limitations of ethics in financial markets, ethical decision-making frameworks, and evaluate real world cases of lapses in culture and impact upon society and the markets. The challenge of identifying and promoting ethical behaviour will be acknowledged. 

• This module will identify key financial intermediaries including banks and non-banks (i.e., FinTech firms, finance companies, mutual banks, multilateral banks, insurers, pensions, hedge funds, retail investors, shadow banks).
• Financial products overview includes equity, subordinated debt (notably issued by financial institutions including their motivation), senior debt (including loans, bonds) as well as the role and consequences of deposit-taking/money market activities for financial institutions given the regulatory context of this module.
• The role, advantages and dis-advantages and recent market developments associated with cash versus derivative markets will be identified and discussed.  Lastly, simple securitisations of credit portfolios will be examined both as a funding tool but how it was misused before the crisis in sub-prime markets.
• Product types identified will include equity and debt (including loans and debt securities), investment banking/advisory, and asset/wealth management. Recent controversies will be looked at in market practice including the scope for market abuse, conflicts of interest, moral hazard, and financial institution misconduct.  Various stakeholders will be identified for the key market types.
• You will investigate criticisms of financial market policies and shortcomings of supervision and review the response by regulators, notably in the banking sector for greater capital, more conservative liquidity provisions, and improved risk governance. Key corporate governance theories will be identified. While regulation presents a legal means to mitigate misconduct by institutions and individuals operating in the financial markets, ethical decision-making and an effective risk culture can offer greater hope over time when conventional supervision and law fail to live up to their promise. Two ethical-decision making frameworks will be introduced in a case study format, one from Jennings (2013) and the other via Ferrell et al. (2011).

On successful completion of this module you should be able to:

1. Understand different financial market structures, players including their roles and respective stakeholders
2. Develop a basic knowledge of key financial markets, major product types, and the scope for misconduct, agency failures and moral hazard
3. Identify the aims, role and structures to provide financial markets supervision including their limitations and recent criticisms
4. Identify the key theories for corporate governance and risk governance practices for financial institutions, and how governance mechanism may interact to impact performance or risk-taking
5. Examine the potential for ethical behaviour and improved conduct to fill the void where law and regulations fail to succeed

• Dr Vineet Agarwal

A good understanding of techniques of valuation of firms as well as the different securities issued by firms is vital for managers and financial analysts. This understanding has a bearing on both financing decisions (issue of equity or debt) and investment decisions (identifying securities for inclusion in a portfolio, acquisitions, buy-backs, divestitures etc.). In addition, building sound financial models is critical for understanding and communicating valuations. This course provides the framework for valuing equity and firms as well as financial modelling to aid decision making.

• Different valuation approaches: discounted cash flow, relative valuation, and residual income valuation framework.
• Estimating the cost of capital using models like CAPM.
• Estimating earnings, cash flows, growth and terminal value.
• Issues in forecasting cashflows.
• Building a robust financial model

On successful completion of this module a student should be able to:

1. Discuss the principles of corporate valuation.
2. Estimate discount rates.
3. Assess and compare a range of valuation methods.
4. Assess and test assumptions and limitations of valuation models.
5. Build valuation models and scenarios using Excel.

Private equity differs from public equity, which is generally the focus in corporate finance. Private equity has become a major source of capital for innovation, growth and corporate restructuring. To succeed as a PE professional, one needs to embrace and tackle various challenges relating to the financing of the company, its operations and the entrepreneurial and uncertain nature of business venturing. The module will cover the nature of and rationale for PE investing, the spectrum of PE activities and the potential conflicts among stakeholders. Another focus will be on value creation programmes to generate PE fund returns.

• The PEQ cycle, from fund raising to investing and exiting.
• Strategies to create firm value in private equity: due diligence, operational concept, exit strategies.
• Measures to align interests among stakeholders in PE.
• Consider the ethical implications of the PE model.

Upon successful completion of this module, a student will be able to:

1. Discuss the idiosyncrasies of PE investments from the perspective of investors in this asset class.
2. Assess and contrast the various types of PE investment: venture capital, buyouts, restructuring, etc.
3. Propose and justify practical measures through which private equity firms can enhance the value of their portfolio companies.
4. Design a due diligence programme to critically assess the risks involved in a particular proposed PE transaction.

• Professor Yacine Belghitar

The module focuses on transactions significantly affecting the corporation’s assets, liabilities and/or equity claims and stresses the economic motives for undertaking them. Transactions are examined from the perspective of the corporation (e.g., firm managers), from the perspective of capital markets (e.g., investors, stockholders, creditors) as well as from the perspective of the society. The module integrates various technical skills learned earlier in the MSc programme such as accounting, corporate finance and strategy.

• Theoretical rationale of mergers, acquisitions, and restructuring.
• The range of restructuring choices.
• Strategies for takeover, merger, corporate turnaround, and corporate renewal.
• Corporate insolvency and reorganisation – insolvency and bankruptcy regimes in the UK, US, Continental Europe and other countries.
• The role of competition and shareholder protection regulation in the mergers, acquisition and restructuring.
• Financing strategies and tools.

On successful completion of this module a student should be able to:

1. Assess the financial, strategic and political causes and motivations driving mergers, acquisitions and restructuring transactions.
2. Evaluate the regulations on competition and shareholders’ protection and their impact on mergers and acquisitions.
3. Assess the financial consequences of restructuring for various stakeholders such as different types of lenders, shareholders, the board of directors and managers and how they generate conflicts of interests among them.
4. Justify and apply alternative valuation techniques to assess a deal.
5. Examine and assess the strategic and managerial implications of methods of payment and the criteria for successful restructuring and re-organization of firms in bankruptcy/ administration.

• Dr Matthias Nnadi

This module aims to train students in both theory and applications in the field of public finance and taxation. The purpose of the module is to understand the role of the government through expenditure and taxation, as well as develop an idea on topics such as externalities and the political economy. It will expose students to frontier research on the theory behind the design of various public policies relating to the spending, taxing, and financing activities of Government. The module addresses the fundamental questions of how decisions should be made; whether tasks should be financed through the public sector or the private sector budgets? It therefore deals with public goods, and policies with respect to external effects.

• The public sector context.
• What is public sector finance and how does it differ from that in the private sector?
• Sources and control of finance in the Public Sector.
• Choice of government financing systems.
• Purposes and principles of taxation.
• Public budgeting at state and local levels of government.
• Financial Management Techniques Budget preparation and analysis.
• Budgets, managing budgets, estimating, budgetary control.

On successful completion of this module a student should be able to:

1. Critically discuss the principles of taxation and its application in public sector.
2. Apply the range of methods available for financing the public sector.
3. Identify sources of finance, develop, and manage budgets in public and/or private sector contexts.
4. Critically examine budgeting in a public service environment.
5. Evaluate the relationships between costs and performance; and the rationale for charging for public services.

• Professor Sunil Poshakwale

This module aims to develop a solid understanding of foreign exchange and interest rate risks that multinational corporations encounter. The focus is on developing insights on how and why these risks arise and what can be done to manage these risks. The other aim is to provide students with commonly used applications of derivatives in managing exchange rate and interest rate risks.

• Introduce students to the world of foreign exchange markets, how exchange rates are quoted and interpreted and what role FOREX markets play in the international finance.
• Discuss why and how multinational corporations invest in foreign markets. The key determinants of Direct Foreign Investments (DFI) are explored in detail.
• Discussion of underlying theoretical models which explain the relationship between interest rates, inflation, and other macro-economic variables and the exchange rates. How forward rates are determined in the market and why covered interest rate arbitrage and carry trades occur and how they are used by investors to exploit disequilibrium in the foreign exchange rates.
• Discussion of basics of currency derivatives and how they work, and the different types of foreign exchange exposures and how they affect market value. How transaction and operating exposure are managed by both internal hedging techniques and derivatives are discussed in detail using case studies.
• How interest rate risks arise and how it affects multinational corporations is followed by how these risks are managed. Students learn about interest rate and currency swaps, how they are set up and how they are valued. The final sessions are used for discussion of international capital budgeting process, how it is done and how key risks need to be considered and managed.

On successful completion of this module a student should be able to:

1. Discuss relationship between interest rates, inflation and purchasing power parity and exchange rate.
2. Identify and contrast different types of foreign exchange exposures.
3. Analyse and predict interest rate and exchange risks.
4. Select and apply different types of derivatives for managing interest rate and exchange risks.
5. Evaluate the issues for multinational firms in their international capital budgeting decisions.

• Dr Vineet Agarwal

The global bond market exceeds $100 trillion which is more than the world’s stock markets. The market has become increasingly quantitative due to the proliferation of new products. Combined with increased volatility of financial prices and exposure to new sources of risk, there are now greater risks and opportunities for fixed income portfolio management.

This module provides the participants with a solid grounding in the mechanics of fixed income markets and introduces them to bond portfolio management techniques.

The module will cover:

• Pricing of fixed and floating rate bonds.
• Measuring bond price volatility.
• Yield curves and bond pricing.
• Analysing callable and convertible bonds.
• Analysing mortgage-backed securities.
• Properties of interest rate derivatives and their use in altering portfolio characteristics.
• Credit risk analysis.
• Bond portfolio management

On successful completion of this module a student should be able to:

1. Assess the risks of investing in fixed interest securities.
2. Examine and assess the role of yield curves in bond pricing.
3. Assess the impact of embedded options on risk-return profile of bonds.
4. Evaluate credit risk models and their application in fixed interest investing.
5. Discuss and evaluate the bond portfolio management techniques using combination of bonds and interest rate derivatives.

This module focuses on environmental, social and governance (ESG) criteria into financial decisions. It provides students with insight into how impact investors seek to generate environmental and social impacts in addition to financial returns.

Module targets students seeking careers in financial services who want to better understand the interaction of capital markets and policy issues.

The class will draw upon principles of finance, public policy and investment management to evaluate specific cases and investment tools in areas such as environmental markets and climate change, public finance and sustainable development. Students will be exposed to both traditional and alternative risk management approaches and investment theory frameworks, as well as a range of case studies on the role and impact of institutional investors, banks, financial supervisory authorities and governments in aligning financial markets with ESG goals.

• Environmental, social and governance (ESG) and finance in practice.
• Climate finance and Impact investing.
• Traditional vs. Alternative Investments in Environmental Finance (Stocks and Impact Funds; Green Bonds).
• Investment Stewardship (Board of directors and its committees; Shareholder stewardship and engagement; Shareholder protection and agency issues).
• Sustainable and responsible investments (SRI).
• Responsible business and firm value.

On successful completion of this module a student should be able to:

1. Define and describe environmental trends and judge the potential risks and opportunities they present to financial markets, with a particular emphasis on climate risks.
2. Discuss the challenges arising from climate change for sustainable investing.
3. Assess how green initiatives could be financed, introduce green finance instruments and their evolving regulatory framework.
4. Evaluate how sustainability issues affect investment decisions made by institutional investors, corporate lenders, insurance companies, asset management funds, hedge funds, venture capitalists and retail investors, as well as business decisions made by corporate managers.
5. Assess corporate sustainability risks and opportunities from a financial perspective and plan how to manage/mitigate those risks.

• Dr Lakshmy Subramanian

The aim of the module is to enable you to critically evaluate the rapidly changing field of digital technology including artificial intelligence as it applies to the worlds of banking and financial services more generally. This will be achieved through developing a critical understanding of:

• IT in historical perspective: from the 1970s to today
• Demand-side and supply-side drivers of digital banking
• Consumer Impact: where have we come from and how is the future of banking being shaped by new technology paradigms. Focus on customer experience, key trends that are driving this
• The new business models evolving in digital banking including Open Banking, BaaS, BaaP, Banking as a marketplace and ecosystem, etc.
• Organisation: what does the digital megatrend mean for how you organise internally? Skills sets are less delineated, agile ways of working etc.
• Future: what emerging trends promise the next wave of innovation (e.g. blockchain, AI)? What disruption is this likely to cause?

The module aims to equip you with the knowledge and understanding to better manage digital technology-related decision-making within a banking context.

The core elements of the module are:

• Digital disruption in banking and financial services: This part of the module will look at how new digital technologies are changing banks and financial services.
• Deeper dive on the dominant new technologies reshaping the industry: This part of the module looks in detail at the new technologies fast changing the banking industry so that students understand both what they are and also the strategic implications for the industry.
• Discussion on the role of regulations, central bank policies, and other related policies.
• Response strategies: This part of the module explores how banks can respond to the rise of digital technologies and the best strategies to compete with new Big Tech and FinTech.

On successful completion of this module you should be able to:

• Critically appraise the impact of new digital technologies including artificial intelligence on the operations of banking.
• Assess and reflect the impact of new market entrants on the business model and competitive position of traditional banks.
• Evaluate the key trends in alternative payment systems, and reflect on the key areas of growth by segments, geography, etc.
• Examine the key motivations for the development of cryptocurrencies and central bank digital currencies, and associated risks, regulatory implications, etc.
• Outline avenues of organizational development and change open to banks to respond to market changes brought about by digital technology.