Financial Management

Paper Code: 
CBBA 405
Credits: 
4
Contact Hours: 
60.00
Max. Marks: 
100.00
Objective: 

Course Objectives:

  • To develop the understanding of financial management concepts and capitalization decisions.
  • Develop the mindset and skills for managing the working capital of an organization thereby learning how to take dividend decisions.
  • Develop sound knowledge about the adequate capital structure of an organization and identifying various sources of finances.

Course Outcomes (COs):

 

Learning outcomes

(at course level)

Learning and teaching strategies

Assessment

Strategies

  
 

CO 283: Students will be able to develop the understanding of financial management concepts and capitalization decisions.

CO 284; Develop the mindset and skills for managing the working capital of an organization thereby learning how to take dividend decisions.

CO 285: Develop sound knowledge about the adequate capital structure of an organization and identifying various sources of finances.

CO 286: Gain knowledge about the steps in the process of capital budgeting and taking decisions with respect to the acceptance of various projects make long term investment decisions by using various techniques like, PB Period, ARR, NPV, IRR, PI, methods.

CO 287: Understand the key concepts of inventory management, cash management and receivables management and apply selective inventory control techniques and understand its significance

 

Approach in teaching:

Interactive Hours, Group discussions, problem solving sessions.

 

Learning activities for the students:

Self-learning assignments, Effective questions,  Chart preparation.

Class test, Semester end examinations, Quiz, Assignments, Presentation, Individual and group projects

  

 

12.00
Unit I: 
Nature of Financial Management

Nature of Financial Management: Finance and related disciplines; Scope of Financial Management; Profit Maximization, Wealth Maximization - Traditional and Modern Approach; Functions of finance.
Capitalization – Under Capitalization and Over Capitalization.

12.00
Unit II: 
Sources of finance

Sources of finance: Classification - Short Term and long term sources of finance. Introduction about Financial Institutions-IDBI, IFCI, ICICI Working Capital Management: Operating cycle method and Net current asset or forecasting method.

12.00
Unit III: 
Capital Structures:

Capital Structures: Approaches to Capital Structure Theories - Net Income approach, Net Operating Income approach, Modigliani-Miller (MM) approach, Traditional approach.
Dividend Policy: Dividend models MM hypothesis, Walter's model, Gordon's model.
Leverage Analysis: Operating and Financial Leverage

12.00
Unit IV: 
Capital Budgeting - Principles and Techniques;

Capital Budgeting - Principles and Techniques; Nature and meaning of capital budgeting; Estimation of relevant cash flows and terminal value; Evaluation techniques - Accounting Rate of Return, Net Present Value, Internal Rate of Return , Net Terminal Value, Profitably Index Method.
Management of Cash and Liquidity: Motives of holding cash, cash management, Cash Planning and Forecasting.

12.00
Unit V: 
Management of Inventory:

Management of Inventory: Need to hold inventory, Objectives, importance and functions of Inventory Management, Techniques of Inventory control.
Management of Receivables: Cost associated with receivables, Objective and Factors affecting Investment in receivables, Credit Evaluation.

Essential Readings: 

M.Y. Khan & P.K. Jain: Financial Management Text Problem and Cases, Tata McGraw Hill Pubilshlng Co. Ltd.
2. R. P. Rustogi: Financial Management: Theory Concepts and Practices, Taxmann Publication.
3. I.M. Pandey: Financial Management: Theory and Practices, Vikas Publishing House
4. R.A. Brealey, S.C. Myers, F. Allen& P. Mohanty: Principles of Corporate Finance, McGraw Hill Higher Education
5. J.V. Horne & J.M. Wachowicz: Fundamentals of Financial Management Prentice Hall

Academic Year: 
2020-2021
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