Financial Management

Syllabus

BCOM: 501-18

Financial Management

Unit-I

Introduction to Financial Management: Meaning, Scope and Objectives of Financial Management. Functions and Role of a Financial Manager.

Time Value of Money- Compounding Techniques and Discounting Techniques.

Cost of Capital: Meaning, Significance and Determination of Cost of Capital, Components of Cost of Capital.

Unit-II

Capital Structure: Meaning and Features of Capital Structure Decision. Factors Affecting Capital Structure. Theories of Capital Structure.

EBIT – EBTEPS –Analysis. Financial and Operating Leverages.

Unit-III

Capital Budgeting Decision: Meaning and Nature of Investment Decisions; Process of Capital Budgeting, Investment Evaluation Criteria: Discounted and Non-Discounted Methods (Pay-Back Period, Average Rate of Return, Net Present Value, Benefit Cost Ratio and Internal Rate of Return. Capital Rationing.

Dividend Policy Decisions – Determinants of Dividend Policy – Types of Dividend Policy– Forms of Dividend. Dividend Theories: Walter’s Model - Gordon’s Model - MM’s Hypothesis (Problems).

Unit-IV

Working Capital Management: Planning and Forecasting of Working Capital, Importance of Adequate Working Capital - Excess or Inadequate Working Capital – Determinants of Working Capital Requirement.

Sources of Working Capital Cash Management, Receivable Management and Inventory Management.