Business Finance notes – KNEC Diploma

This unit or subject is examined by KNEC on those taking the following courses:

The topics that need to be covered as required by KNEC in this unit/subject are as follows:



This module unit is intended to equip the trainee with knowledge, skills and attitudes that will enable him/her to identify the sources c: finance, manage and apply business finance in a business set up.

General Objectives

At the end of this module unit the trainee should be able to:

  • Discuss the types of business organisations
  • Identify various the 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.


Module Unit Summary

Topic 1: Nature of Business Finance

  • Meaning of business finance
  • Nature and scope
  • Importance of business finance
  • Relationship with other disciplines

Topic 2: Sources of Finance

  • Sources of business finance
  • Criteria used to choose sources of finance
  • Methods used to raise finance

Topic 3: Cost of Finance

  • Definition of finance
  • Importance of cost of finance
  • Components of cost of finance
  • Specific cost of finance Weighted average cost of Capital

Topic 4: Financial Institutions in Kenya

  • Financial institution in Kenya
  • Functions
  • Role of financial institutions
  • Factors that have leading to rapid growth of financial institutions
  • Factors leading to failure of indigenous financial institutions

Topic 5: Working Capital Management

  • Definition of working capital management
  • Types of working capital management
  • Calculation of working capital management
  • Sources of financing
  • Mechanisms of controlling working capital

Topic 6: Time Value of Money

  • Definition of time value of money
  • Importance of time value of money
  • Future value of money
  • Present future value of money
  • Loan amortization

Topic 7: Investment

  • Appraisal
  • Techniques
  • Meaning of Investment Appraisal Techniques
  • Importance Appraisal Techniques
  • Limitations of Investment Appraisal Technique

Topic 8: Ratio Analysis

  • Ratio analysis
  • Types of ratio
  • Limitations of ratio analysis

Topic 9: Emerging Trends and Issues in Business Finance            

  • Emerging trends and issues in business finance
  • Challenges posed by emerging trends and issues in business finance
  • Coping with challenges posed by emerging trends and issues in business finance

0 Replies to “Business Finance notes – KNEC Diploma”

  1. BUSINESS FINANCE notes and KNEC papers (Diploma) please?

    You do also have COMMERCE notes and KNEC papers (Certificate) right?

Leave a Reply

Your email address will not be published. Required fields are marked *