Financial Management

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

Course Outcomes

Learning and teaching

strategies

Assessment Strategies

On completion of this course, the students will be able to;

 

CO 1: Apply discounting and compounding techniques to solve practical financial problems.

CO 2: Analyze risk and return associated with a security or portfolio

CO 3: Examine Cash Management, Marketable Securities Management, Receivables Management and Inventory Management.

CO 4: Calculate working capital requirements and Cost of Capital of a Company.

CO 5: Evaluate a project proposal using Capital Budgeting techniques

CO 6: Analyze Leverage; Capital Structure

and Dividend policy of a company.

Approach in teaching:

Interactive Lectures, Group Discussion, Tutorials, Case Study

 

 

Learning activities for the students:

Self-learLning assignments, presentations

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

 

12.00
Unit I: 

Introduction-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-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-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- 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-Meaning, types of leverages and their significance

Capital Structure-Meaning, considerations in capital structure planning

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

 

 

Essential Readings: 
Essential Readings:
  • Chandra Prassana, Financial Management, Tata McGraw Hill, 9th Edition

 

Suggested Readings:
  • Brigham Houston, Fundamentals of Financial Management, Cengage Learning, Thirteenth Edition
  • I M Pandey “Financial Management”, Vikas Publications
  • Vyuptkesh Sharan, Fundamentals of Financial Management, Pearson, Third Edition
  • Khan & Jain, “Financial Management”. Tata McGraw Hill, 7e
  • Van Horne, Financial Management, PHI
  • Rustagi R.P, Fundamentals of Financial Management, Taxmann

 

 

References: 
E-Resources:

 

Journals:
  • International Journal of Financial Management
  • IUP Journal of Applied Finance

 

Academic Year: 
2023-2024
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