Financial Management

Paper Code: 
24CBBA405
Credits: 
4
Contact Hours: 
60.00
Max. Marks: 
100.00
Objective: 

This course will enable the students to develop the understanding of financial management concepts and capitalization decisions. and create sound knowledge about the adequate capital structure of an organization and identify various sources of finances.

Course Outcomes: 

Course

Learning outcome

(at course level)

Learning and teaching strategies

Assessment Strategies

Course Code

Course

Title

 

24CBBA 405/24 CBTM 403

 

 

Financial Management

(Theory)

 

CO169: Appraise the area of financial management, its scope, and the concept of over capitalization and under capitalization.

CO170: Explain short term and long-term sources of finance and calculate the required fund of working capital.

CO171: Analyze capital structure, leverage, and dividend decisions.

CO172: Analyze capital budgeting techniques and explain the concept of cash management.

CO173: Examine various techniques of inventory management and develop an understanding of receivables management.

CO174: Develop the different strategies in promoting continuous and comprehensive learning among students.

Approach in

teaching:

Interactive sessions, Case Study Discussion, Tutorials, Reading assignments.

 

Learning activities

for the students:

Self-learning assignments, Classroom presentation, Solving questions-based problems, Project tasks

Continuous Assessment Test, Semester End Examination, Quiz, Assignments, Presentation, Individual and group projects

 

12.00
Unit I: 
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

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. Liquidity, Solvency, Turnover, Profitability, Investment analysis ratios.

12.00
Unit III: 
Capital Structure

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; 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

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: 

1. 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

References: 

Suggested Readings:

1.      R.A. Brealey, S.C. Myers, F. Allen& P. Mohanty: Principles of Corporate Finance, McGraw Hill Higher Education

2.      J.V. Horne & J.M. Wachowicz: Fundamentals of Financial Management Prentice Hal

E-resources:

1.      https://www.expresslibrary.mheducation.com/bookshelf

2.      MS-109.pdf (uou.ac.in)

Academic Year: 
2024-2025
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