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Financial Management (1)

Contains materials for Financial management subject

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Ayush Maddhesia
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29 views

Financial Management (1)

Contains materials for Financial management subject

Uploaded by

Ayush Maddhesia
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Name of the course: Financial Management/7th semester

Course Title: Financial Management


Type of Course: Creative Level of Course: Delivery Sub
Art Basket paper BTech (UG) Type of the
course: Lecture
Course code: No. of credits: 0 L-T-P: 0-0-0 Learning hours: 30
including internal
evaluation
Pre-requisite and Co-requisite of Course: None
Department: BFSI
Syllabus: Introduction of Financial Management, Risk and Return, Long-term Investment
Decisions, Concept and Measurement of Cost of Capital, Working Capital Management,
Receivables Management, Inventory Management
Course objectives: This course aims to acquaint the students about how money works in
businesses. It covers things like making smart investments, understanding risks, and making good
financial decisions. The objective is to make students learn about managing money for companies,
handling investments, and how the financial markets work. They also practice solving real-world
problems to get better at managing money. By learning different tools and methods, students
become good at making money decisions and understand how to do it ethically. Overall, the
course aims to help students learn how to manage money wisely in the business world.
Course content
Module/ Topic L T P
Unit
1 Introduction of Financial Management 2 0 0
The nature, scope and objective of financial management
2 Nature of Financial Management 2 0 0
Profit Maximization, Wealth Maximization - Traditional and
Modern approach
3 Time value of Money and Return 4 0 0
Compounding and Discounting, Historical return, expected return,
absolute return, holding period return, annualised return, arithmetic
& geometric return
4 Long-term Investment Decisions 5 0 0
Capital Budgeting - 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.
5 Concept and Measurement of Cost of Capital 4 0 0
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
overall cost of capital based on Historical and Market weight
6 Working Capital Management 5 0 0
Management of Cash - Preparation of Cash Budgets (Receipts and
Payment Method only); Cash management technique:
Concentration banking and Lockbox system;
Receivables Management – Cash Discount, Debtors Outstanding
and Ageing Analysis, Costs - Collection Cost, Capital Cost,
Default Cost, Delinquency Cost
7 Capital Structure 4 0 0
Theories of Capital Structure (Net Income, Net Operating Income,
MM Hypothesis, Traditional Approach), Basics of Leverage
8 Inventory Management 4 0 0
ABC Analysis; Minimum Level, Maximum Level, Reorder Level,
Safety Stock, Economic Order Quantity
Scheme of Evaluation:
 End Semester Examination Weightage: 70%
 Continuous Internal Evaluation Weightage including attendance and class participation:
30%
Recommended Books and References:
● Financial Management: Text Problem and Cases, M.Y. Khan & P.K. Jain, 8th ed., Tata
McGraw Hill Publishing Co. Ltd
● Financial Management: Theory, Concepts and Problems with excel applications and case
studies, 6th revised edition Dr. R. S. Rustagi, Taxmann
● Fundamentals of Financial Management, J.V. Horne & J.M. Wachowicz, 13th ed. Prentice
Hall
● Fundamentals of Financial Management, I.M. Pandey, Theory and Practices,11th ed.,
Vikas Publishing House
Learning outcomes:
Upon completion of this course, the students will be able to:
● Understand the different basic concepts/fundamentals of Financial Management (Module 1-2)
● Developing analytical skills to select the best source of capital, its structure based on the cost
of capital and risk-return analysis (Module 3-6)
● Analyze, interpret and communicate working capital and inventory decisions (Module 7- 8)
Hyperlinks of suggested e-Resources:
 Financial Management for Managers -
https://onlinecourses.nptel.ac.in/noc20_mg31/preview
 Financial Management MIT OpenCourseWare - https://ocw.mit.edu/courses/15-414-
financial-management-summer-2003/resources/lec1_intro/

Pedagogical approach
The Financial Management course introduces students to money management fundamentals,
outlining its scope and objectives. It covers risk and return in investments, emphasizing
measurement techniques. Long-term investment decisions, capital budgeting principles, and
evaluation methods are explored. Understanding the cost of capital and theories behind capital
structure choice is highlighted. Additionally, the course addresses working capital management,
teaching cash flow preparation, receivables, and inventory control techniques essential for business
operations. Through these topics, students gain insights into financial decision-making, risk
assessment, and strategies crucial for effective financial management in diverse business settings.

Additional information (if any): -NA-

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