Financial Management

Syllabus

Financial Management

Module-1 Introduction                                                                                                                 9 Hours

Meaning and Objectives of Financial Management, Changing Role of Finance Managers. Interface of Financial Management with Other Functional Areas. Indian Financial System: Financial Markets, Financial Instruments, Financial Institutions and Financial Services. Emerging Issues in Financial Management: Risk Management, Behavioural Finance, Financial Engineering, Derivatives (Theory).

Module-2 Time Value of Money                                                                                                  9 hours

Meaning of Time Value of Money –Future Value of Single Cash Flow & Annuity, Present Value of Single Cash Flow, Annuity & Perpetuity. Simple Interest & Compound Interest, Capital Recovery & Loan Amortization. (Theory & Problem). Case Study on Loan Amortization. Computer Lab for Calculation of Future Value, Present Value and Loan Amortisation in MS Excel.

Module-3                                                                                                                                        9 hours

Sources of Financing: Shares, Debentures, Term Loans, Lease Financing, Hybrid Financing, Venture Capital, Angel Investing and Private Equity, Warrants and Convertibles (Theory Only). Cost of Capital: Basic Concepts. Cost of Debenture Capital, Cost of Preferential Capital, Cost of Term Loans, Cost of Equity Capital (Dividend Discounting and CAPM Model) - Cost of Retained Earnings - Determination of Weighted Average Cost of Capital (WACC) and Marginal Cost of Capital. (Theory & Problem). Case Study on WACC.

Module-4 Investment Decisions                                                                                                    9 hours

Capital Budgeting Process, Investment Evaluation Techniques – [Net Present Value, Internal Rate of Return, Modified Internal Rate of Return, Profitability Index, Payback Period, Discounted Payback Period, Accounting Rate of Return Problem). Risk Analysis in Capital Budgeting-Case Study on Replacement of Capital Project. (Numerical Problems). Computer Lab for Calculation of NPV, IRR, PI, Payback Period, ARR in MS Excel.

Module-5 Working Capital Management                                                                                   7 hours

Factors Influencing Working Capital Requirements - Current Asset Policy and Current Asset Finance Policy-Determination of Operating Cycle and Cash Cycle on Excel- Estimation of Working Capital Requirements of a Firm. (Does Not Include Cash, Inventory & Receivables Management). Case Study on Working Capital Determination and the Impact of Negative Working Capital Amazon-Negative Working Capital and Profitability. Computer Lab for Calculation of Working Capital Cycle and Operating Cycle in MS Excel.

Module-6 Capital Structure and Dividend Decisions                                                                 7 hours

Capital Structure and Dividend Decisions – Planning the Capital Structure-Governance of Equity and Debt, Fall in Interest Rates and Perils of Debt Funding. Leverages, EBIT and EPS Analysis. ROI & ROE Analysis. Capital Structure Policy. Dividend Policy – Factors Affecting the Dividend Policy - Dividend Policies- Stable Dividend, Stable Payout (No Dividend Theories to be Covered). Case Study on EBIT-EPS Analysis

& Leverages.