MC-502 Financial Management

Ser # Topics
1
Introduction to financial management,
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8
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11

Financial Management and goal of a business firm, agency problem,

corporate governance, corporate social responsibility
Role of finance manager in a business firm
Financial environment and financial markets
Financial intermediaries, financial brokers
Allocation of funds in the economy and interest rate fundamentals
Financial statements analysis-ratio analysis, common size analysis
(vertical analysis), comparative analysis, trend analysis and index
analysis (horizontal analysis)
Financial planning, forecasting, and budgeting-preparation of cash
budget and budgeted financial statements
Cash flows and preparation of statement of cash flows
Time value of money/mathematics of finance-simple interest and
compound interest concepts, time line, compounding and discounting,
future value and present value concepts single amount, annuity, mixed
stream, and perpetuity concepts, nominal and effective interest rates,
amortizing loan, deposits to accumulate some future sum
Working capital management-cash and marketable securities management,
accounts receivable and inventory management, accounts payable
management in a business firm

Gitman
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Van Horen

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haily notes

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12

Capital budgeting-concept, relevant cash flows in capital budgeting,

projects evaluation techniques and decision making, conflicting
decisions of NPV and IRR

13

Cost of capital-concept, calculating cost of individual source for capita,

weighted average cost f capital (WACC), weighted marginal cost of capital.

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14

Leverage and capital structure-operating, financial, and total leverage,

total leverage concept, measuring operating, financial, and total leverage,
optimal capital structure

hailey notes

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15

Valuation of long term securities (financial assets)-bonds, preferred stock

and common stock, Calculation of value and yield/return on financial assets

Books Recommended
1.Van Horne J.C., Fundamentals of financial management
2.Gitman L.J., Principals of managerial finance
3.Campsey B.J., Brigham Eugene F., Introduction to financial management
4.Khan M Y, Jhain P K, Financial management
5.Keown Arthur J, Scott David F., Martin John D, Basic financial management
6.Rao, Introduction to financial management

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