Financial Management

Paper Code: 
MAM 225
Credits: 
4
Contact Hours: 
60.00
Objective: 

The basic purpose of this course is to develop an insight in the field of financial management so as to equip the student with basic knowledge required for financial decision making.

12.00
Unit I: 
Meaning

Nature, Scope, Importance and Objectives of Financial Management; Functions of a chief financial officer; Sources of finance- Long term and Short term; Indian financial system-structure and functions.
Time value of money-Compounding and Discounting concept and its applications

12.00
Unit II: 
Risk and Return

Risk of a single asset, portfolio theory and risk diversification, Systematic and unsystematic risk, Capital Asset pricing model (CAPM)- Assumptions, CAPM equation, Security Market line (SML)
Cash and Marketable securities management- Meaning and Principles of cash management

12.00
Unit III: 
Management of working capital

Meaning, Estimation of working capital requirements, Working capital financing by banks;
Receivables management- Meaning and importance;
Inventory management- Meaning, objectives and techniques-Economic order quantity, Re-order point, Fixing stock levels

12.00
Unit IV: 
Cost of Capital

Meaning, Cost of Debt, Preference and Equity Capital, Weighted average cost of capital;
Capital Budgeting: Concept, need and objectives; Methods of Capital budgeting –Average Rate of Return, Payback period, Net present value, Internal Rate of Return, Profitability Index

12.00
Unit V: 
Leverage

Meaning, types of leverages and their significance;
Capital Structure-Meaning, considerations in capital structure planning, value of firm and capital structure;
Dividend Policy- Meaning, Factors affecting dividend decisions, Alternative forms of dividends, Types of dividend policies, Dividend policy models-Assumptions and criticism

Essential Readings: 

• I M Pandey “Financial Management”, Vikas Publications
• Sheeba kapil, Fundamentals of Financial Management, Pearson
• Chhandra Prassana, Financial Management, Tata McGraw Hill
• Khan & Jain, “Financial Management”. Tata McGraw Hill, New Delhi
• Brigham Houston, Fundamentals of Financial Management, Cengage Learning.
• Van Horne, Financial Management, PHI
• Rustagi R.P, Fundamentals of Financial Management, Taxmann

Academic Year: