Finance and Financial Reporting

The details
Mathematics, Statistics and Actuarial Science (School of)
Colchester Campus
Undergraduate: Level 5
Monday 13 January 2025
Friday 21 March 2025
04 January 2024


Requisites for this module



Key module for

BSC N233 Actuarial Science (Including Placement Year),
BSC N233DT Actuarial Science (Including Placement Year),
BSC N323 Actuarial Science,
BSC N323DF Actuarial Science,
BSC N323DT Actuarial Science,
BSC N324 Actuarial Science (Including Year Abroad),
BSC N325 Actuarial Science (Including Foundation Year),
MSCIN399 Actuarial Science and Data Science,
BSC N333 Actuarial Studies,
BSC N333DT Actuarial Studies,
BSC N334 Actuarial Studies (Including Placement Year),
BSC N334DT Actuarial Studies (Including Placement Year),
BSC N335 Actuarial Studies (Including Year Abroad)

Module description

This module introduces and develops the concepts and elements of corporate finance including a knowledge of the instruments used by companies to raise finance and manage financial risk.

It provides an understanding of the role and nature of financial institutions operating in financial markets, introduces the concepts and techniques of financial accounting and enables students to understand and interpret critically financial reports of companies and financial institutions. Students will be introduced to the use of spreadsheets in financial analysis and of online information sources. 

Module aims

The aims of this module are:

  • to introduce the key principles of finance;

  • to describe the different forms of company ownership;

  • to introduce the basic principles of personal taxation, capital gains and company taxation;

  • to describe in detail the basic financial instruments;

  • to examine in detail the capital structure and dividend policy;

  • to critically analyse the cost of capital and capital project appraisal;

  • to describe in detail the basic financial institutions;

  • to examine in detail the different forms of financial reporting and construction of accounts;

  • to critically analyse the interpretation of financial accounts.

Module learning outcomes

By the end of the module, students will be expected to be able to:

  1. Demonstrate a knowledge and understanding of the principal terms in use in investment and asset management.

  2. Demonstrate an awareness of the key principles of finance.

  3. Describe the structure of a joint stock company and the different methods by which it may be financed.

  4. Describe the basic principles of personal and corporate taxation.

  5. Demonstrate a knowledge and understanding of the characteristics of the principal forms of financial instrument issued or used by companies and the ways in which they may be issued.

  6. Discuss the factors to be considered by a company when deciding on its capital structure and dividend policy.

  7. Define what is meant by a company's cost of capital and discuss how its cost of capital interacts with the nature of the investment projects it undertakes.

  8. Describe the major types of financial institution operating in the financial markets.

  9. Describe the basic construction of accounts of different types and the role and principal features of the accounts of a company.

  10. Interpret the accounts of a company or a group of companies and discuss the limitations of such interpretation.

  11. Show how financial techniques can be used in the assessment of capital investment projects.

Module information

This module covers all required material for the Institute and Faculty of Actuaries CB1 syllabus (Business Finance - Core Principles).

Indicative syllabus:

Introduction and the key principles of finance
Principal terms use in investment and asset management, outline the relationship between finance and the real resources and objectives of an organisation, the relationship between the stakeholders in an organisation (including lenders and investors), the role and effects of the capital markets, agency theory, and the theory of the maximisation of shareholder wealth.

Company ownership
Describe the distinctive characteristics of sole traders, partnerships and limited companies as business entities, the different types of loan and share capital, distinguish between authorised and issued share capital, discuss the economic advantages and disadvantages of a limited company as a business entity, outline the main differences between a private and public company, and describe the different types of medium and short term company finance.

Describe the basic principles of personal taxation, capital gains and company taxation. explain the different systems of company taxation from the points of view of an individual shareholder and the company, and outline the basic principles of double taxation relief.

Financial instruments
Financial instruments, use of derivatives and issue of shares.

Capital structure and dividend policy
Describe the effect that the capital structure used by a company will have on the market valuation of the company, the effect of taxation on the capital structure used by a company, the principal factors that a company should consider in setting dividend policy, alternative ways of distributing profits, such as buybacks, and the effect that the dividend policy will have on the market valuation of a company.

The cost of capital and capital project appraisal
Calculate a company's weighted average cost of capital, discuss the different methods used for project evaluation, evaluate risky investments including probability trees, simulation and certainty equivalents, discuss the issues in establishing the required rate of return for a capital project and the principal methods that may be used to determine the viability of a capital project, factors underlying the choice of discount rate, methods that may be used for identifying the risks, suitable techniques for ascertaining the probability of occurrence of different risks and distribution of the possible financial outcomes of a capital project.

Financial Institutions
Describe the main features of the central banks, investment exchanges and investments on the financial markets, and role played in financial market by clearing banks, building societies, investment trusts, unit trusts, investment management companies, self-administered pension fund, life and general insurance companies.

Financial reporting and construction of accounts
Annual report and fundamental accounting concepts which should be adopted in the drawing up of company accounts. Construct the statement of financial position, statement of comprehensive income and cash flow statement. Understand the structure and content of insurance company accounts, subsidiary company and associated company, consolidated accounts and explain the depreciation and reserves.

Interpretation of accounts
Calculate and explain priority percentages and gearing, interest cover and asset cover for loan capital, price earnings ratio, dividend yield, dividend cover and EBITDA, net earnings per share and accounting ratios. Describe the possible effects of interest rate movements on a highly geared company. Discuss the shortcomings of historical cost accounting, limitations in the interpretation of company accounts and the ways that reported figures can be manipulated to create a false impression of a company's financial position.

Learning and teaching methods

Teaching in the School will be delivered using a range of face-to-face lectures, classes, and lab sessions as appropriate for each module. Modules may also include online only sessions where it is advantageous, for example for pedagogical reasons, to do so.


The above list is indicative of the essential reading for the course.
The library makes provision for all reading list items, with digital provision where possible, and these resources are shared between students.
Further reading can be obtained from this module's reading list.

Assessment items, weightings and deadlines

Coursework / exam Description Deadline Coursework weighting
Coursework   Test      
Exam  Main exam: In-Person, Open Book (Restricted), 180 minutes during Summer (Main Period) 
Exam  Reassessment Main exam: In-Person, Open Book (Restricted), 180 minutes during September (Reassessment Period) 

Exam format definitions

  • Remote, open book: Your exam will take place remotely via an online learning platform. You may refer to any physical or electronic materials during the exam.
  • In-person, open book: Your exam will take place on campus under invigilation. You may refer to any physical materials such as paper study notes or a textbook during the exam. Electronic devices may not be used in the exam.
  • In-person, open book (restricted): The exam will take place on campus under invigilation. You may refer only to specific physical materials such as a named textbook during the exam. Permitted materials will be specified by your department. Electronic devices may not be used in the exam.
  • In-person, closed book: The exam will take place on campus under invigilation. You may not refer to any physical materials or electronic devices during the exam. There may be times when a paper dictionary, for example, may be permitted in an otherwise closed book exam. Any exceptions will be specified by your department.

Your department will provide further guidance before your exams.

Overall assessment

Coursework Exam
20% 80%


Coursework Exam
20% 80%
Module supervisor and teaching staff
Dr Peng Liu, email:
Dr Peng Liu



External examiner

Dr Melania Nica
Available via Moodle
Of 42 hours, 33 (78.6%) hours available to students:
9 hours not recorded due to service coverage or fault;
0 hours not recorded due to opt-out by lecturer(s).


Further information

* Please note: due to differing publication schedules, items marked with an asterisk (*) base their information upon the previous academic year.

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