Financial Management

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

Course Objective:

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(CO):

Course

Learning outcomes

(at course level)

Learning and teaching strategies

Assessment

Strategies

Paper Code

Paper Title

MHR 225

Financial Management

CO77: Apply discounting and compounding techniques to solve practical financial problems.

CO78: Analyze risk and return associated with a security or portfolio

CO 79: Examine Cash Management, Marketable Securities Management, Receivables Management and Inventory Management.

CO80:Calculate working capital requirements and Cost of Capital of a Company.

CO81: Evaluate a project proposal using Capital Budgeting techniques

CO82:AnalyzeLeverage; Capital Structure and Dividend policy of a company.

 

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

 

12.00
Unit I: 
Meaning & 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; 

12.00
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.

12.00
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 Capitalbudgeting –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: 

BOOKS RECOMMENDED:-

  • I M Pandey “Financial Management”, Vikas Publications
  • Sheebakapil, Fundamentals of Financial Management, Pearson
  • ChhandraPrassana, 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: 
2021-2022
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