C.M.13 Financial Management
Course objectives:
- To familiarize the students with the concepts, tools and practices of financial management, and,
- To learn about the decisions and processes of financial management in a business firm.
Module I
Financial management: meaning, nature and scope of finance; financial goals: profit maximization, wealth maximization; finance functions,- investment, financing and dividend decisions.
Module II
Capital budgeting: nature of investment decisions; investment evaluation criteria- net present value, internal rate of return, profitability index, payback period, accounting rate of return , NPV and IRR comparison; capital rationing; risk analysis in capital budgeting.
Module III
Working capital: meaning, significance and types of working capital; financing of working capital; sources of working capital; management of inventory; management of cash; management of account receivables; optimum credit policy; credit collection; factoring service; various committee reports on bank finance; dimensions of working capital management.
Module IV
Capital structure theories: traditional and MM hypotheses; determining capital structure in practice; Capital structure planning.
Cost of capital: meaning and significance of cost of capital; calculation of cost of debt, preference capital, equity capital and retained earnings;
Operating and financial leverages; measurement of leverages; effects of operating and financial leverages on profit.
Module V
Dividend decisions—Types of dividend- dividend models—principles of dividend policy— practical aspects of dividend .
Books:
- Battacharya, Hrishikas: Working Capital Management: Strategies and Techniques; Prentice Hall of India, New Delhi.
- Chandra, Prasanna: Financial Management; Tata McGraw Hill, Delhi
- Pandey, I.M.: Finanical Management, Prentice Hall of India, New Delhi.
- Khan M.Y. and Jain P.k.: Financial Management; Tata McGraw Hill, Delhi.
- Vanhorne, J.C.: Financial Management and Policy; Prentice Hall of India, New Delhi.
- Ravi M kishore: Fundamentals of Financial Management ( Tax man)