Description

Financial Management – I

 

SYBBI Semester III

 

Syllabus

 

1. Introduction to Finance and Financial Management
A. Introduction to Finance
♦ Meaning and Definition of Finance
♦ Importance of Finance
♦ Types of Finance : Public and Private
♦ Sources of Finance
1. Long Term Sources : Term Loans, Debentures, Bonds, Zero Coupon Bonds, Convertible Bonds, Equity Shares, Preference Shares, CD, CP, Public Deposits
2. Short Term Sources : Bank Finance, Trade Credit, Other Short Term Sources
3. Venture Capital and Hybrid Financing
B. Financial Management
♦ Meaning and Importance of Financial Management
♦ Scope of Financial Management
♦ Functions and Objectives of Financial Management
♦ Primary Objective of Corporate Management
♦ Agency Problem
♦ Organisation of Finance Function
♦ Emerging Role of Finance Managers in India
C. Objectives of the Firm
♦ Profit Maximisation and Shareholders Wealth Maximisation
♦ Profit v/s Value Maximisation

2. Financial Goal Setting and Time Value of Money
A. Financial Goal Setting
♦ Introduction
♦ Financial Forecasting – Meaning, Techniques, Benefits
♦ Approaches to Financial Planning
♦ Economic Value Added (EVA) – Measurement and Components
♦ Free Cash Flow (FCF)
B. Time Value of Money
♦ Concept
♦ Present Value
♦ Annuity
♦ Techniques of Discounting
♦ Techniques of Compounding

3. Investment Decisions : Capital Budgeting
Capital Budgeting
♦ Nature of Capital Budgeting
♦ Purpose of Capital Budgeting
♦ Capital Budgeting Process
♦ Types of Capital Investment
♦ Basic Principle of Measuring Project Cash Flows
♦ Increment Principle, Long Term Funds Principle, Exclusion of Financial Cost Principle, Post Tax Principle
♦ Probability Technique for Measurement of Cash Flow
♦ Capital Budgeting Techniques : Net Present Value Profitability Index and Discounted Payback Method
♦ A Comparison; Project Selection Under Capital Rationing
(Note : Problems on Computation of Cash Flow, Ranking of Projects on Various Techniques, Selection and Analysis with / without Capital Rationing)

4. Financial Decisions
A. Cost of Capital
♦ Introduction and Definition of Cost of Capital
♦ Measurement of Cost of Capital
♦ Measurement of WACC using Book Value and Market Value Method
♦ Measuring Marginal Cost of Capital
B. Capital Structure Decisions
♦ Meaning and Choice of Capital Structure
♦ Importance of Optimal Capital Structure
♦ EBIT-EPS Analysis
♦ Capital Structure Theories
♦ Dividend Policies (Walter and Gordon)

Note : Relevant Law / Statute / Rules in force and relevant Accounting Standards in force on 1st April immediately preceding commencement of Academic Year is applicable for ensuing examination after relevant year.