Financial Management | MBA 2nd Sem | SUK

Unit 1:

Financial Management:

(10 Hours)

a) Theory

Introduction, Meaning, Objectives- Profit Maximization and Wealth Maximization approach, Scope of Financial Management, Functions of Financial Management, Structure of Finance Department, Financial Planning and Strategy, Strategic Decision Making and Planning, Strategic Financial Planning-Steps in Financial Planning, Financial Planning Models– Components and Constructing of Financial Planning Models.

b) Practical

i) Take interview of Finance Manager of any business enterprise to understand his functions, role in the organization, Process of Financial Planning and components of Financial Planning.

(5 Hours)

Unit 2:

Time Value of Money:

(10 Hours)

a) Theory

Time Lines and Notation, Future Value of a Single Amount, Present Value of a Single Amount, Future Value of an Annuity, Present Value of an Annuity, Term Loan, Intra-Year Compounding and Discounting, Multi period compounding.

b) Practical

i) Take simulation exercise of the effect of change in value of money on bank deposits.

(5 Hours)

Unit 3:

Working Capital Management:

(10 Hours)

a) Theory

Concept of Gross and Net Working Capital, Use and Importance of Working Capital, Working Capital Cycle, Influencing Factors, Preparation of Schedule of Changes in Working Capital. Funds Flow Statement-Meaning, sources and application of fund, funds from operation, Preparation of Funds Flow Statement. Cash Flow Statement: Meaning of Cash Flow Statement, Meaning of Cash fund and Cash Flow, Classification of Cash Flow, Treatment of items, Preparation of Cash Flow Statement and its analysis, Operating, Investing and Financing Activity (As per AS-3).

b) Practical

i) Make group discussion on Business need of working capital and its finance.

ii) Download the Cash Flow Statement (As per AS-3) of any company and make its critical analysis.

(5 Hours)

Unit 4:

Financial Decision:

(10 Hours)

a) Theory

Cost of Capital, Significance of Cost of Capital, Determining of Component of Cost of Capital, Cost of Debt, Cost of Preference Capital, Cost of Equity Capital, Cost of Equity and the Capital Asset Pricing Model (CAPM), Weighted Average Cost of Capital. Capital Structure- Relevance of Capital Structure-Net Income and Traditional Views, Irrelevance of Capital Structure.

b) Practical

i) Collect or Download annual report of any company to analyze its capital structure and cost of capital. ii) Group discussion on capital structure.

(5 Hours)

Note: 1) Minimum 5 hours practical on MS-Excel should be conducted to teach various techniques of financial management. 2) Students should be motivated to analyze financial performance and capital structure. 3) Practical Problems would be asked on Unit-1, Unit-2, Unit-3 and Unit-4.