Financial Management

Syllabus

Course Code: MBA202

Financial Management

Module 1: Introduction        6 Hours    

Introduction: Financial Management: Meaning and Scope- Objectives of Financial Management-Role and Functions of Finance Managers. Interface of Financial Management with other Functional Areas. Indian Financial System: Structure-Types-Financial Markets- Financial Instruments -Financial Institutions and Financial Services- Non-Banking Financial Companies (NBFCs). Emerging Areas in Financial Management: Risk Management- Behavioural Finance- Financial Engineering- Derivatives (Theory).

Module 2: Time Value of Money     7 Hours

Time Value of Money: Time Value of Money –Future Value of Single Cash Flow & Annuity – Present Value and Discounting-Present Value of Single Cash Flow, Annuity & Perpetuity. Simple Interest & Compound Interest - Capital Recovery Factor & Loan Amortization Schedule (Theory & Problem).

Module 3: Long Term Sources of Finance & Cost of Capital    7 Hours

Long Term Sources of Finance & Cost of Capital: Shares- Debentures- Term Loans and Deferred Credit Lease Financing- Hybrid Financing- Venture Capital-Angel Investing- Private Equity- Crowd Funding (Theory Only). Cost of Capital: Basic Concepts-Components and Computation of Cost of Capital- Cost of Debentures- Cost of Term Loans- Cost of Preferential Capital-Cost of Equity (Dividend Discounting and CAPM model) - Cost of Retained Earnings - Determination of Weighted Average Cost of Capital (WACC) (Theory & Problem).  

Module 4: Investment Decisions     10 Hours        

Long Term Investment Decisions (Capital Budgeting): Need and Importance of Capital Budgeting and its Process-Techniques of Capital Budgeting – Payback Period, Discounted Payback Period, Accounting Rate of Return, Net Present Value, Internal Rate of Return, Modified Internal Rate of Return, Profitability Index Method. Capital Rationing. Estimation of Cash Flows for New Projects and Replacement Projects. (Theory & Problem).

Module 5: Capital Structure and Dividend Decisions       10 Hours                     

Capital Structure and Dividend Decisions: Capital Structure– Planning the Capital Structure, Optimum Capital Structure- Governance of Equity and Debt Leverages- EBIT and EPS Analysis-Return of Investment (ROI) & Return on Earnings (ROE) Analysis (Theory & Problem). Dividend Decisions & Policies – Factors Affecting the Dividend Policy – Types of Dividend Policy, Forms of Dividend-Bonus Issue-Stock Split (Theory Only).  

Module 6: Working Capital Management       10 Hours      

Working Capital Management: Sources of Working Capital- Factors Influencing Working Capital Requirements - Current Asset Policy and Current Asset Finance Policy- Determination of Operating Cycle and Cash Cycle - Estimation of Working Capital Requirements of a Firm (Theory and problem).