Lecture 1 I Overview of Financial Management I Financial Management I Syeda Arooj Naz
Lecture 1 I Overview of Financial Management I Financial Management I Syeda Arooj Naz
Syeda Arooj
Naz
1
“Financial Management” Overview
• Financial management deals with directing, controlling, planning, and strategically organizing
financial projects or accounts of an organization. Financial management education involves
using management rules for the finances of an organization. The elements of financial
management are explored in a mathematical framework, enabling the students to develop
competencies in such areas as determining TVM, Investment, working capital management,
financial and investment analysis and short term & long-term financing.
Importance of “Financial Management”
as course
• Financial management course is important due to the various benefits it
offers to the students who enroll themselves in this courses. This course
offers a deep understanding of financial management by thoroughly covering
different subjects which fall under the jurisdiction of financial management.
Subjects like working capital, capital structure, financial and economic
indicators, budgeting, cash flow, financial solvency etc are taught in detail in
this class. The content of this course is designed to provide the student’s
details and a comprehensive understanding of the importance and impact of
financial control in any organization.
Course Content
• Introduction to Financial Management,
• Types of Business Organizations,
• Financial Statements (Balance sheet, Income Statement, Cash Flow
Statement etc)
• Time Value of Money, Present value, Future value, Annuities, Perpetuities,
• Financial Markets,
• Financial Statement Analysis, comparative statement analysis, Ratio Analysis,
Discounted Cash Flow Valuation, Free cash flow
• Capital Budgeting, NPV and Payback Rule, Average Accounting Return and
Internal Rate of Return, Making Capital Investment Decision,
Course content
• Capital Structure, Weighted Average Cost of Capital, Leverage of Capital
Structure,
• Returns, Variability of Returns, Portfolio, Risk, Business and Financial Risk,
Bankruptcy Costs,
• Loans, Bonds and Valuing Bonds, Different Types of Bonds, Determinants of
Term Structure,
• Equity Markets and Stock Valuation, Some Special Cases in Stock Valuation,
• Working Capital management, Operating Cycle and Cash Cycle,
• Cash Management, Credits and Receivables, Inventory Management.
Course Learning Outcomes
Upon successful completion of this course, You all will be able to:
• Recognize the contents and uses of financial statements.
• Evaluate different investment proposal keeping in view the concept of time value of
money, risk and returns.
• Valuate the different types of securities such as common stocks, preferred stocks
and bonds.
• Assess the financial viability of capital investment projects by using different capital
budgeting techniques.
• Capital structure, Identify the sources and types of funding available to businesses
along with the benefits and costs of each source.
• Comprehend the tools and techniques used in Cash Budgeting
• Recognize the basics of Cash, Credits & Receivables Management and recognize
some important aspects of Inventory Management.
Scheme of Study
• Slides
• Notes
• Recorded lectures
• Core Text
Fundamentals of Financial Management: 13th Edition) Author: Van Horne & John
M.Wachowicz, Jr. Publisher: Prentice-Hall International, Inc.
• Reference Book
• Foundations of Financial Management, 12th Edition, Stanley B. Block & Geoffrey A.
Hirt, Irwin McGraw-Hill. ISBN# 978-0-07-302720-3 (provided)
• Principles of Corporate Finance 7 edition by Richard A Brealey, Stewart C Myers,
Richard Brealey, Stewart Myers, McGraw-Hill/Irwin; (July 2, 2003) ISBN: 0072940433
Course Assessment
11
Thanks for Listening
12