BA4202: Financial Management
Unit I: Foundations of Finance 9
Introduction to Finance- Financial Management – Nature, Scope and Functions of Finance, Organization of Financial Functions, Objectives of Financial Management, Major Financial Decisions – Time Value of Money – Features and Valuation of Shares and Bonds – Concept of Risk and Return – Single Asset and of a Portfolio.
Unit II: Investment Decisions 9
Capital Budgeting: Principles and Techniques - Nature of Capital Budgeting- Identifying Relevant Cash Flows - Evaluation Techniques: Payback, Accounting Rate of Return, Net Present Value, Internal Rate of Return, Profitability Index - Comparison of DCF techniques - Concept and Measurement of Cost of Capital - Specific Cost and Overall Cost of Capital.
Unit III: Financing and Dividend Decision 9
Leverages - Operating and Financial Leverage – Measurement of Leverages – Degree of Operating & Financial Leverage – Combined Leverage, EBIT – EPS Analysis- Indifference Point.
Capital Structure – Theories – Net Income Approach, Net Operating Income Approach, MM Approach – Determinants of Capital structure.
Dividend Decision- Issues in Dividend Decisions, Importance, Relevance & Irrelevance Theories- Walter”s – Model, Gordon’s Model and MM Model. – Factors Determining Dividend Policy – Types of Dividend Policies – Forms of Dividend.
Unit IV: Working Capital Management 9
Principles of Working Capital: Concepts, Needs, Determinants, Issues and Estimation of Working Capital - Receivables Management - Inventory Management – Cash Management - Working Capital Finance : Commercial Paper, Company Deposit, Trade Credit, Bank Finance.
Unit V: Long Term Sources of Finance 9
Indian Capital Market- New Issues Market- Secondary Market - Long Term Finance: Shares, Debentures and Term Loans, Lease, Hire Purchase, Venture Capital Financing, Private Equity.