Financial Management

Syllabus

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.