Financial Management

Paper Code: 
MFM 225
Credits: 
4
Contact Hours: 
60.00
Max. Marks: 
100.00
Objective: 

                                               Course Objective

  1. The basic purpose of this course is to develop an insight in the field of financial management so as to equip the student with basic knowledge required for financial decision making.

                                              Course Outcomes

 

Learning outcomes

(at course level)

Learning and teaching strategies

Assessment

Strategies

  
 

CO 66:Acquaint with the arena of Financial Management and apply concepts of discounting and compounding to solve practical problems.

CO 67:Understand the concept of risk and return, Cash Management, Marketable Securities Management, Receivables Management and Inventory Management.

CO 68:Calculate working capital requirements and Cost of Capital of a Company.

CO 69:Apply Capital Budgeting techniques to evaluate a project proposal.

CO 70:Understand significance of Leverage; basics of Capital Structure and Dividend policy

 

Approach in teaching:

Interactive Lectures, Group Discussion, Tutorials, Case Study

 

Learning activities for the students:

Self-learning assignments, presentations

Class test, Semester end examinations, Quiz, Assignments, Presentation

  

 

10.00
Unit I: 
Introduction & Time value of money:

Meaning, Nature, Scope, Importance and Objectives of Financial Management; Functions of a chief financial officer; Sources of finance- Long term and Short term; Indian financial system-structure and functions.

Time value of money-Compounding and Discounting concept and its applications

12.00
Unit II: 
Risk and Return & Cash and Marketable securities management

Risk and Return – Risk of a single asset, portfolio theory and risk diversification, Systematic and unsystematic risk, Capital Asset pricing model (CAPM)- Assumptions, CAPM equation, Security Market line (SML)

Cash and Marketable securities management- Meaning and Principles of cash management; 

13.00
Unit III: 
Management of working capital, Receivables management & Inventory management

Management of working capital- Meaning, Estimation of working capital requirements, Working capital financing by banks;

Receivables management- Meaning and importance;

Inventory management- Meaning, objectives and techniques-Economic order quantity, Re-order point, Fixing stock levels.

 

13.00
Unit IV: 
Cost of Capital- & Capital Budgeting

Cost of Capital- Meaning, Cost of Debt, Preference and Equity Capital, Weighted average cost of capital;

Capital Budgeting: Concept, need and objectives; Methods of Capital budgeting –Average Rate of Return, Payback period, Net present value, Internal Rate of Return, Profitability Index.

12.00
Unit V: 
Leverage, Capital Structure & Dividend Policy

Leverage: Meaning, types of leverages and their significance;

Capital Structure-Meaning, considerations in capital structure planning, value of firm and capital structure;

Dividend Policy- Meaning, Factors affecting dividend decisions, Alternative forms of dividends, Types of dividend policies, Dividend policy models-Assumptions and criticism

Essential Readings: 

 

  • I M Pandey “Financial Management”, Vikas Publications
  • Sheeba kapil, Fundamentals of Financial Management, Pearson
  • Chhandra Prassana, Financial Management, Tata McGraw Hill
  • Khan & Jain, “Financial Management”. Tata McGraw Hill, New Delhi
  • Brigham Houston, Fundamentals of Financial Management, Cengage Learning.
  • Van Horne, Financial Management, PHI
  • Rustagi R.P, Fundamentals of Financial Management, Taxmann
Academic Year: 
2020-2021
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