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To acquaint students with the techniques of financial management and their applications for business decision making.
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.
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.
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.
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.
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.
Nature and scope of Financial Management-Role of Finance Manager Interdisciplinary aspects of Financial Management
Know various Financial Management Decisions and their risk-return trade off
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
concept of time value of money
The difference between Nominal and Effective rate of interest.
Interpreting Nominal & Effective Interest Rates pdf
The Concepts of Return- Measuring the Rate of Return
The Concepts of Risk-
Learn the different techniques available for measuring risk and returns.
The Capital Asset Pricing Model (CAPM)
Reading material of Prof Alex Shapiro
Meaning of capital budgeting
Appraisal Criteria: Discounted and Non-Discounted Methods
Appraisal Criteria: -Pay –Back Period
Appraisal Criteria: - Accounting Rate of Return
Modified Internal Rate of Return (MIRR) Method
The Meaning of Cost of Capital-Cost of Different Sources of Finance- Concept and Importance
Cost of Preference share
Cost of Preference share
Case study of cost of capital
Net Operating Income Approach
Modigliani - Miller ( MM) approach
Problem on Capital structure
Gordon Valuation Model
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 […]