Financial Management –MB-207

I. Introduction
Goal of Financial Management – Chapter 1
Financial Management & Functions of financial Management
II. Time Value of Money
Problems on Present value & Future value of Single amount, Present &Future value of Annuity
III. Valuation Of Securities
Problems on –Bond Valuation ,Preferred Stock Valuation, Common Stock Valuation, TM
Theory – How to value the bond, Preferred Stock and Common Stock
IV. Working Capital Management - Chapter 24
Theory
What is Working capital
Types of working capital
Factors affecting working capital
Financing Current Asset (Hedging approach, Conservative Approach, Aggressive approach)
Working Capital Cycle
Problems
Estimation of Working Capital ,Operating Cycle
V. Cash Management –Chapter 25
Motives of Holding Cash
How to speed up and slow down the cash flows
Optimum Cash Balance – Baumol’s Model & Miller –Orr Model
Investment of Surplus fund
Problems
Cash Budget, Cash flow & Fund Flow ,Baumol’s Model
VI. Accounts Receivable Management – Chapter 26
Credit Policy (Credit Standard ,Credit Period ,Cash Discount, Collection Effort )
Credit Evaluation ( Traditional Credit Analysis ,Numeric Credit Scoring, Risk Classification Scheme )
Control Of Accounts Receivable (Day’s Sales Outstanding, Age Analysis, Collection Matrix )
Problem – Optimum credit period
VII. Capital Budgeting – Chapter –9
Concept & Capital Budgeting Process
NPV
IRR
PI
ARR
Pay Back & Discounted Pay back period
Relation of NPV & IRR
Situations when NPV & IRR does not give identical decision

VIII. Cost Of Capital

Concept
Computation of Specific cost of capital- Debt, Preference share and equity
Weighted average cost of capital (Book Value & Market Value )
IX. Leverage
Operating Leverage
Financial Leverage
Combined Leverage
Indifference Point
X. Capital Structure
Factors affecting capital structure
NI approach
NOI approach
Traditional approach
M-M approach
XI. Dividend Policy
Factors affecting Dividend policy
Dividend Theories – Gordon Model,Walter Model, M-M approach
Dividend stability
Legal aspect of Dividend
Bonus Share &Stock Splits