2.
5 FINANCIAL MANAGEMENT
COURSE OBJECTIVES 60 Hours
1. To enable a strong conceptual fundamentals for corporate finance and make the students comfortable and easy
understanding of financial management and an overview of Indian and global scenario.
2. The syllabus also contains the practical components of the subject which enable the students gain more practical
knowledge under each module
3.
LEARNING OUTCOMES
1. The student will exhibit the conceptual understanding of various steps involved in raising, allocation and distribution
finance
2. The student will be able to apply concepts learnt to demonstrate the understanding of the published reports of
business firms and companies and also demonstrate the ability to draw meaningful conclusions about the financial
performance of business firms and companies
3.
MODULE 1: INTRODUCTION TO FINANCIAL MANAGEMENT 08 Hours
Introduction to Indian Financial System, General areas of finance, importance of finance in non-finance areas, Functions of
Financial Management, finance and corporate strategy, Financial Goals of a firm, Emerging role of finance manager in India
MODULE 2 TIME VALUE OF MONEY 08 Hours
Compounding, Continuous Compounding, Effective Rate of Interest, Discounting – Single Cash Flows & Series of Cash
Flows, Annuity – Future Value and Present Value, Present Value of Growing Annuity, Perpetuity – Present Value, Growing
Perpetuity – Present Value, Equated Annual Instalments.
MODULE 3: INVESTMENT DECISIONS 12 Hours
Capital Budgeting, process of Capital budgeting, use of capital budgeting techniques in practice, Methods of appraising
proposals; Payback period, ARR, NPV, IRR, MIRR, Profitability Index (problems). Meaning of Capital Rationing
MODULE 4: COST OF CAPITAL AND CAPITAL STRUCTURE 16 Hours
Introduction of capital structure- optima capital structure, Factors influencing capital structure. NI Approach, NOI approach,
and MM approach (Theory and simple problems only) Leverages - Financial Leverage – Operating Leverage and Combined
Leverage. Cost of Capital- Meaning and Methods of computing cost of capital: Cost of Equity Capital, Cost of Preferred
Capital, Cost of Debt, Weighted Average Cost of Capital (Theory and Problems).
MODULE 5: WORKING CAPITAL MANAGEMENT 06 Hours
Working capital, factors determining working capital, Sources of working capital, estimating working capital needs, Cash
Management, Inventory Management (Only Theory), Receivables Management.
MODULE 6: DIVIDEND DECISIONS 10 Hours
Dividend decisions and valuation of firms, Determinants of dividend policy, Dividend theories – relevance and irrelevance:
Walter, Gordon and Modigliani-Miller Hypothesis (including problems), Bonus issues and stock split.
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