FUNDAMENTALS OF FINANCIAL MANAGEMENT

Teacher

Sanjukta Mohanty

Category

Core Courses

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Course Objectives: 

The major objectives of this course is to:

  • Development of analytical and decision-making skills in finance through the use of theory questions and practical problems.
  • To familiarize the students with the principles and practices of financial management.

Course Outcomes: 

Upon successful completion of Financial Management, the student will be able to:

  • Demonstrate an understanding of the overall role and importance of the finance function.
  • apply best practices in financial management to make plans, organize projects, monitor outcomes, and provide financial leadership;
  • apply best practices to create, evaluate, and re balance financial portfolios to achieve investment outcomes
  • Demonstrate basic finance management knowledge.

Communicate effectively using standard business terminology.

Course Contents:

Unit 1: 

 

 Introduction 

Nature, scope and objective of Financial Management, Time value of money, Risk and return (including Capital Asset Pricing Model), Valuation of securities – Bonds and Equities
Unit 2: 

 

 Investment Decisions

The Capital Budgeting Process, Cash flow Estimation, Payback Period Method, Accounting Rate of Return, Net Present Value (NPV), Net Terminal Value, Internal Rate of Return (IRR), Profitability Index, Capital budgeting under Risk – Certainty Equivalent Approach and Risk- Adjusted Discount Rate.  
Unit 3:  Financing Decisions

Cost of Capital and Financing Decision: Sources of long-term financing Estimation of components of cost of capital. Methods for Calculating cost of equity capital, Cost of Retained Earnings, Cost of Debt and Cost of Preference Capital, Weighted Average cost of capital (WACC) and Marginal cost of capital. Capital structure –Theories of Capital Structure (Net Income, Net Operating Income, MM Hypothesis, Traditional Approach). Operating and financial leverage; Determinants of capital structure 

 
Unit 4:  Dividend Decisions 

Theories for Relevance and irrelevance of dividend decision for corporate valuation; Cash and stock dividends; Dividend policies in practice

 
Unit 5:  Working Capital Decisions

Concepts of working capital, the risk-return trade off, sources of short-term finance, working capital estimation, cash management, receivables management, inventory management and payables management

Books Recommended: 

  • James C. Van Horne and Sanjay Dhamija, Financial Management and Policy, Pearson Education
  • Levy H. and M. Sarnat . Principles of Financial Management. Pearson Education
  • Brigham and Houston, Fundamentals of Financial Management, Cengage Learning
  • Khan and Jain. Basic Financial Management, McGraw Hill Education
  • Prasanna Chandra, Fundamentals of Financial Management. McGraw Hill Education
  • Singh, J.K. Financial Management- text and Problems. Dhanpat Rai and Company, Delhi.
  • Rustagi, R.P. Fundamentals of Financial Management. Taxmann Publication Pvt. Ltd.
  • Singh, Surender and Kaur, Rajeev. Fundamentals of Financial Management. Mayur Paperback, New Delhi.
  • Pandey, I.M. Financial Management. Vikas Publications. Bhabatosh Banerjee, Fundamentals of Financial Management

Session Plan

Session -1

Introduction to Financial Management

Introduction to Financial Management

Session-2

Functions of Finance

financial management Introduction

Session-3

objectives of Financial Management
https://www.youtube.com/watch?v=a3_-kBT5vM0
https://www.youtube.com/watch?v=8k-v1EtAYXU(my reference)

Session-4

Time value of money – Present Value
https://www.youtube.com/watch?v=0etEItEINZw
https://www.youtube.com/watch?v=n4QINzCCKGE

Session-5

Time value of money- Future Value

Future Value

Session-6
Risk & Return Trade off
Risk Return Trade off

Session- 7

Valuation of securities

security Valuation(Bond Valuation)-converted

Session- 8

The Capital Budgeting Decision

capital budgeting-converted

Session- 9

Risk Measurement under capital Budgeting

Risk analysis in Capital Budgeting

Session- 10

Cash flow Estimation

Cash Flow estimation

Session- 11

Cost of Capital and Financing Decision

cost of capital pdf

Session- 12

Financing decision

Financing Decisions-pdf

Session- 13

Theories of Capital Structure

5capital-structure-theories

Session- 14

Types of Leverage

Leverage 2

Session- 15

Theories on Dividend

dividend policy

Session- 16

Working Capital Decisions

Working Capital Management -2

Working Capital Management -1

Session- 17

cash management

Cash Management Problrms solved

cashmanagement Models

Cash Management 1

Session- 18

Receivables Management

Receivable and payable management

Session- 19

Inventory management

Inventory Management.ppt New

Session- 20

Case Study Discussion

Problem practice

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Sanjukta Mohanty

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Sanjukta Mohanty is working as HOD – B.COM (B&A) at Centurion University of Technology and Management, Bhubaneswar. Sanjukta Mohanty is continuing her Ph.D in Management under Utkal University. She has completed her MBA in Finance from Biju Pattnaik University of Technology & Management. She is also having MA in Economics from Ravenshaw University. She has […]