CONSTRUCTION FINANCIAL MANAGEMENT

SHE Level 5
SCQF Credit Points 15.00
ECTS Credit Points 7.50
Module Code MMN325196
Module Leader John Lowe
School School of Computing, Engineering and Built Environment
Subject Construction and Surveying
Trimester
  • B (January start)

Pre-Requisite Knowledge

Normal postgraduate entrance

Summary of Content

This module operates an overall 50% pass rate. This module covers all aspects of the financial management of construction companies and projects with particular attention to capital investment decisions and cash flow manageme nt.

Syllabus

Capital investment: The nature of capital. Fixed capital and working capital. Sources and costs of capital for construction projects. Investment appraisal: The developers' budget. Construction costs: Site costs and overhead costs. Allocation of costs within and between contracts. Sources and reliability of cost data for use in managing construction costs. Accounts and ratios. Cost control of construction projects. Bidding strategy: Preparing a bid for contract work including allocation of overheads. Pricing strategies for speculative work. Cash flow management: Single project and multi-project cash flow. Management of cash flow for the client and the contractor. Insolvency in construction: The incidence of insolvency in the construction sector. Factors that cause insolvency.

Learning Outcomes

On successful completion of this module students should be able to:1 Prepare and modify a developers' budget,2 Discuss the factors to be considered in the preparation of bids3 Understand and analyze cash flow schedules and financial statements,4 Discuss the factors causing insolvency in the construction industry.

Teaching / Learning Strategy

A web-based form of delivery will be used throughout the module. All students will use the web for all their teaching and learning materials. Full-time, part-time and distance learning students will be able to participate in seminars, which will facilitate discussion and allow them to meet visiting speakers and take part in site visits where appropriate. In addition the points will be illustrated by case studies of hypothetical companies and development projects.

Indicative Reading

Interfacing Risk and Earned Value Management: 1 (2008) Association for Project Management; (First Edition) ISBN: 978-1903494240 Practice Standard for Earned Value Management (2005) Project Management Institute. ISBN: 978-1930699427 Kirkham. Richard: Ferry and Brandon's Cost Planning of Buildings, Blackwell Science, Oxford. Harris F, McCaffer R and Edun-Fotwe, Francis, Modern Construction Management; Blackwell, 2006 Potts, Keith, Construction Cost Management: Learning From Case Studies (2008), Span.

Transferrable Skills

D1 - Critical thinking and problem solving; D2 - Cognitive/intellectual skills; D3 - Knowledge and understanding in the context of the subject; D6 - Time management (organising and planning work); D7 - Independent working; D8 - Planning, monitoring, reviewing and evaluating own learning and development; D10 - Information retrieval skills; D12 - Group working D13 - IT Skill D14 - Communication skills, written, oral and listening

Module Structure

Activity Total Hours
Seminars (PT) 20.00
Assessment (PT) 20.00
Independent Learning (PT) 110.00
Assessment (FDL) 20.00
Assessment (FT) 20.00
Independent Learning (FDL) 130.00
Seminars (FT) 20.00
Independent Learning (FT) 110.00

Assessment Methods

Component Duration Weighting Threshold Description
Exam (Dept) 01 n/a 20.00 45% On-line class test
Coursework n/a 80.00 45% Report on development finance project (1500 words)