Advanced Financial Management

                                                                                       Syllabus

                                                                                                MBA: 304 FIN- Advanced Financial Management

Unit 1

Financial Planning and Shareholder Value: Overview of Financial Planning; Long Term and Short Term Sources of Finance; Financial Statements Including Funds Flow and Cash Flow Statements; Importance of Cash Flows; Concept of Financial Distress; Shareholder wealth and Managerial Behaviour; Growth and Value; Concept and Features of Value-Based Management; Economic Value Added (EVA): Meaning, Components, Advantages & Drawbacks, Calculating EVA.                                                                                                                                                  (6 + 2)

Unit 2

Capital Structure and Firm Value: Assumptions and Definitions; Net Income Approach; Net Operating Income Approach; Traditional Position; Modigliani and Miller Position Taxation and Capital Structure; Tradeoff; Signaling Theory; PBIT - EPS Analysis; ROI - ROE Analysis; Leverage Ratios; Guidelines for Capital Structure Planning.       (7 + 2)                                                        Unit 3

Investment Decisions: Meaning and Process, Risk and Uncertainty in Capital Budgeting: Capital Rationing and Project Selection. Inflation and Capital Budgeting; Capital Budgeting Practices in Indian Companies.          (5 + 2)

Unit 4

Working Capital Management: Determination of Level of Current Assets, Working Capital Financing by Banks; Cash and Liquidity Management- Aspects of Cash Management, Motives for Holding Cash and Marketable Securities, Cash Management Models, Strategies for Managing Surplus Funds; Credit Management: Objectives of Trade Credit, Credit Policies. Control and Collection of Accounts Receivables, Role of Factoring in Receivables Management (No Problems on Estimation of Working Capital).                                                                                                    (9 + 2)

Unit 5

Dividend Policy and Firm Value: Why Firms Pay Dividends; Factors Influencing Dividend Policy; Legal and Procedural Aspects; Bonus Shares and Stock Splits; Share Buybacks and Valuation; Dividend Policies in Practice; Dividend Models: Walter’s Model, Gordon’s Model, Modigliani and Miller’s Hypothesis; Models in Which Investment and Dividend Decisions are Related.                                                                                                  (8 + 2)