Financial Management (BBA)

Teacher

Debi Prasad Satapathy

Category

Core Courses

Course Attendees

Still no participant

Course Reviews

Still no reviews

Course Name : Financial Management

Code(Credit) : CUTM1219(4-0-2)

Course Objectives

To acquaint students with the techniques of financial management and their applications for business decision making.

Learning Outcomes

It focuses on graduating students with in-depth knowledge of corporate finance, investment management, financial risk management and corporate evaluation. apply appropriate methods and analytical procedures to conduct analysis of practical financial problems and propose valid solutions based on this analysis.

Course Syllabus

Module I
Nature of Financial Management: Finance and related disciplines; Scope of Financial Management; Profit Maximization, Wealth Maximization - Traditional and Modern Approach; Functions of finance – Finance Decision, Investment Decision, Dividend Decision; Objectives of Financial Management; Organisation of finance function; Concept of Time Value of Money, present value, future value, and annuity; Risk & Return: Historical return, expected return, absolute return, holding period return, annualized return, arithmetic & geometric return; Risk - Systematic & unsystematic risk – their sources and measures.
Module II
Long -term investment decisions: 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 & MIRR, Net Terminal Value, Profitably Index Method. Concept and Measurement of Cost of Capital: Explicit and Implicit costs; Measurement of cost of capital; Cost of debt; Cost of perpetual debt; Cost of Equity Share; Cost of Preference Share; Cost of Retained Earning; Computation of over-all cost of capital based on Historical and Market weights.
Module III

Capital Structures: Approaches to Capital Structure Theories - Net Income approach, Net Operating Income approach, Modigliani-Miller (MM) approach, Traditional approach, Capital Structure and Financial Distress, Trade-Off Theory. Dividend Policy Decision - Dividend and Capital; The irrelevance of dividends: General, MM hypothesis; Relevance of dividends: Walter's model, Gordon's model; Leverage Analysis: Operating and Financial Leverage; EBIT -EPS analysis; Combined leverage.
Module IV
Working Capital Management: Management of Cash - Preparation of Cash Budgets (Receipts and Payment Method only); Cash management technique, Receivables Management – Objectives; Credit Policy, Cash Discount, Debtors Outstanding and Ageing Analysis; Costs - Collection Cost, Capital Cost, Default Cost, Delinquency Cost, Inventory Management (Very Briefly) - ABC Analysis; Minimum Level; Maximum Level; Reorder Level; Safety Stock; EOQ, Determination of Working Capital.

Text Books:

  1. Dr Prasanna Chandra – Tata Mc Graw-Hill

Reference Books:

  1. I M Pandey –Tata McGraw-Hill
  2. Brealey and Meyers: Principles of Corporate Finance: Tata McGraw Hill, New Delhi, 2008.
  3. Keown, Martin, Petty and Scott (Jr): Financial Management: Principles and Applications; Prentice Hall of India, New Delhi, 2002.

Session Plan

Session 1

Nature and scope of Financial Management-Role of Finance Manager Interdisciplinary aspects of Financial Management

Finance Functionpdf

Additional Reading

Session 3

Know various Financial Management Decisions and their risk-return trade off

Economic times reading

Video

Additional Reading

Session 4

Meaning of Time Value of Money (TVM), The motives behind TVM, How to calculate the Present value and the Future value using the discounting and
compounding.

concept of time value of money

Video for Value of money

Session 5

The difference between Nominal and Effective rate of interest.

Interpreting Nominal & Effective Interest Rates pdf

Video of Interest rate

Session 6

The Concepts of Return- Measuring the Rate of Return

Video of measuring return

Additional Reading

RISK AND DIVERSIFICATION

Session 7

The Concepts of Risk-

Video of Risk

Additional Reading

Session 8

Learn the different techniques available for measuring risk and returns.

online Resources

RISK AND DIVERSIFICATION PDF

https://www.youtube.com/watch?v=wKL5o4NEWr4

Session 13

Appraisal Criteria: Discounted and Non-Discounted Methods

https://www.youtube.com/watch?v=vXmEppcJuiQ

capital budgeting CFA material

Session 20

The Meaning of Cost of Capital-Cost of Different Sources of Finance- Concept and Importance

https://corporatefinanceinstitute.com/resources/knowledge/finance/cost-of-capital/

https://www.youtube.com/watch?v=X-mJDEi1p7k

Case Studies

Case Studies

Recent Comments

    Our Main Teachers

    Dr. Satapathy is Assistant Professor (Finance and Accounting) at CUTM. He holds a master’s degree in finance and control from Utkal university. He also has completed doctoral level fellow programme in management from NIFM Faridabad. He has more than 11 Years of teaching, training and research experience. He has worked at VIT university Bhopal and […]