Course Title: Financial Management I

Course Code: FM I Hours: 30 Credit: 3.0

Specialization Area: Finance Course type: Core
Pre-requisite (mention course code): None
Academic Year: 2019-20 Term: III Batch: 2019-21
Faculty: Dr Indira Bhardwaj E-mail: indira@dsb.edu.in

Course Introduction

The objective of a business enterprise is to generate profits and remain viable and sustainable.
Sustainability necessitates value creation by organizations and in the process of value creation,
financial managers are increasingly supplementing the traditional metrics of performance with new
methods that encourage a greater role for risk assessment and critical analysis of alternatives. The
purpose of this course is to enable students to understand the financial decision-making process
and to interpret the impact that financial decisions will have on value creation. Thus the course
intends to train students on the intricacies of four major decision-making areas in financial
management: financing, investment, liquidity, valuation and asset management decisions.
Students will get trained on the decision making process for all above decisions and will also be
able to foresee the future implications of these decisions.

Course Outcomes
The course aims to equip the students with necessary knowledge and skills to:
 Evaluate returns on financial assets over a period of time
 Analyze and value different types of securities – Equity, Bond and Derivatives
 Estimate risk and return for investment decisions
 Create and evaluate portfolios using different theories and models
 Evaluate and assess investment decisions using capital budgeting techniques
 Analyze the relationship of capital structure and cost of capital of the firm

Mapping of Course Outcomes with Program level outcomes

Following are the Program Outcomes and Program Specific Outcomes of the PGDM course of
DSB-

Program Outcomes (PO) -

PO1: Apply the knowledge of management theories and practices to solve business problems.
PO2: Foster Analytical and critical thinking abilities for data-based decision making.
PO3: Ability to develop Value based leadership ability.
 PO4: Ability to understand, analyze and communicate global, economic, legal, and ethical
aspects of business.
PO5: Ability to lead themselves and others in the achievement of organizational goals,
contributing effectively to a team environment.
PO6: Ability to gain communication skills required for business management.
PO7: Ability to integrate business ethics in decision making
PO8: Ability to consider sustainability of business in formulating business solutions

Program Specific Outcomes (PSO) -

PSO1: Work professionally in industries as change agents by applying knowledge gained in the
program.
PSO2: Think and act as entrepreneur with a view to enhance employment opportunities for the
society at large.
PSO3: Apply technological advances in managerial decision making.
Considering the weights of 1 to 3 as ‘Low’ to ‘High’, all course outcomes are mapped with
Program Outcomes and Program Specific Outcomes as follows-

Program level Outcomes  PO1 PO2 PO3 PO4 PO5 PO6 PO7 PO8 PSO1 PSO2 PSO3
Evaluate returns on
CO 1 financial assets over a
period of time 3 3 NA 1 NA 1 2 2 NA NA 2
Analyze and value
different types of
CO 2
securities – Equity,
Bond and Derivatives 3 3 1 3 3 2 3 2 2 3 3
Estimate risk and
CO 3 return for investment
decisions 3 3 2 3 3 2 3 3 3 3 3
Create and evaluate
portfolios using
CO 4
different theories and
models 3 3 2 3 1 2 3 3 3 3 3
Evaluate and assess
investment decisions
CO 5
using capital
budgeting techniques 3 3 3 3 1 2 3 3 3 3 3
Analyze the
relationship of capital
CO 6
structure and cost of
capital of the firm 3 3 1 2 2 3 3 3 3 3 3

AVG
3 3 1.8 2.5 2 2 2.83 2.67 2.83 2.5 2.83

Required Reading (only one)

Financial Management by IM Pandey, Vikas Publishing (11th Edition)
Teaching & Learning Methods
Learning Methods Link with Course Outcomes
Case Based Discussions 1-6
Lecture 1-6
Problems and Assignments 1-6
Analysis of live and past data from the markets 1-6

Assessment Methods
Components of Assessment Weightage
Continuous
Attendance and Class Participation 20%
Quizzes 10%
Assignments 5%
Projects 15%
Exams
Mid-term 20%
End-term 30%
Final (mid-term & end-term) 50%
Total 100%

Course Content

Session Topic Reading Class Activity

1-2 Introduction Concepts of Ch 1 and 2- IMP Case: Divya Handtools Pvt Ltd
Value and Return
3-4 Valuation of Bonds Ch 3 – IMP Case: Shyamulu Rao’s Investment
Decision
5-6 Valuation of Shares Ch 3 – IMP Case: Hitech Chem Ltd

7-8 Risk and Return Ch 4 – IMP Project: Collect Annual Data of DPS, EPS
and Market Price of share companies and
calculate Annual Returns, Annual
dividends and capital gains percentages,
average rates of return.
9-10 Portfolio Theory and CH 5 – IMP Problem Nos 6,7,8
Capital Asset Pricing
Model (CAPM)
11 Beta Estimation and Cost Ch 6 – IMP Using data from Session 7 and
of Equity Corresponding returns of Sensex of the
periods, Calculate Beta of the companies
12 Cost of Capital Ch 9 – IMP Case: Hindustan Unilever Ltd
13 Valuation of Options Ch 7 – IMP Problem Nos: 20,21,22,23
 14 Derivatives for Risk Ch 33 – IMP Problem Nos 1, 2, 3
Management
15 Capital Budgeting Ch 8 – IMP Case: G.S PetroPull Company
Decisions
16 Complex Investment Ch 11 – IMP Case: Ritesh Foundries Ltd
Decisions
17 Risk Analysis in Capital Ch 12-IMP Case: Richa Foods Company
Budgeting
18 Financial and Operating Ch 14 – IMP Case: Central Equipment Company
Leverage
19-20 Capital Structure: Theory Ch 15 – IMP Case: Samrudh Company Ltd
and Policy

There will be a Mid Term Test which will be conducted after the 10th session through an
additional 21st session.
Attendance and Class Participation will be calculated for 20 teaching sessions. Attendance
for Mid Term will be mandatory.

Note: Students must refer to PGDM Manual for Grading and Assessment Norms, Policies
regarding attendance, plagiarism, academic honesty, disciple etc. They should also refer to
PGDM Manual for Rubrics for Assessment of various components