DEPARTMENT - INSTITUTE OF MANAGEMENT (FINANCE)

COURSE PACK
for
FINANCIAL MANAGEMENT - MBA234

MBA234 -  FINANCIAL MANAGEMENT

Total Teaching Hours For Semester :

30 No of Lecture Hours/Week : 3

Max Marks :
100
:3

Course Description and Course Objectives:

In this course, the focus shifts from recording and analyzing the financial books to using the accounting information efficiently for managerial effectiveness.
While financial accounting provides information for external users, financial management forms a useful tool for internal users namely the managers. 
Students learn concepts of financial management such as time value of money, cost of capital, capital structure, dividend policy and sources of finance and
further learn to use these concepts for decision making.

Course Outcomes

1. Students are able to apply the important elements of finance concepts for running a business.
2. Students are able to evaluate decision facilitating roles of accounting information.
3. Students are able to solve business problems of the real world pertaining to basic elements of financial management
4. Students are able to appreciate the ethical and social dimensions of managing finance in business.

Level of Knowledge: Basic, Applied / Working

Unit-
1
Hours:0

Overview of Corporate Finance (Self Learning Module)

Scope of finance, Finance functions, financial manager’s role, financial goal

Profit maximization vs. wealth maximization, Organization of finance function.

Unit-
2
Hours:4

Time Value of Money

Time preference for money; Future value of a single cash flow & annuity, Present value of a single cash flow of a single cash flow and annuity, Simple interest
& compound interest, Capital recovery & loan amortization, Stated vs. effective rate of interest

Unit-
3
Hours:4

Cost of Capital

Concept of opportunity cost of capital, Method of calculating cost of capital- cost of debt, preference & equity capital, CAPM model, Determination of
weighted average cost of capital (WACC), Weighted marginal cost of capital.

Unit-
4
Hours:7

Investment Decision
Objectives: Nature of investment decision, Type of investment decision, Investment evaluation criteria, Compare & contrast NPV & IRR. Determining cash
flows for investment analysis: Cash flows v/s profit Incremental cash flows, components of cash flows.

Unit-
5
Hours:4

Working Capital Management

Needs for investing in current assets, Concept of working capital management. Approaches in working capital, Factors affecting working capital management
Estimation of working capital requirement, Receivable management, Working capital finance decision.

Unit-
6
Hours:6

Capital Structure and Dividend Policy

Introduction, planning the capital structure, capital structure theory (in brief), Factors in determining capital structure decisions. EPS / EBIT analysis and EPS/
ROE analysis.

Dividend theories (Walter, Gordon, M&M), Dividend policies in practice, Bonus shares.

Unit-
7
Hours:5

Sources of Finance

Sources of Long-term Finance:Shares, Debentures and term loans; Raising long-term finance- IPO, Right issue, Private placement etc. International sources of
finance – ECB, FCCB, ADR, GDR etc (only the product and not the process of raising money).

Essential References:

1. Brigham & Houston, 14th Ed.,  Fundamental of Financial Management,  CENGAGE Learing

2.  Chandra, P. (2010). Fundamentals of Financial Management. Tata McGraw-Hill Education.

3.  Khan, M. Y., & Jain, P. K. (2010). Financial Management. Tata Mac Graw Hill Publishing Co. Ltd.

        4.  Pandey,I M(2010).Financial Management.(10e)Vikas Publishing House Pvt Ltd.

Recommended References:

1. Banerji, A.S.K. (2002). Financial Management and Policy. S.Chand & Co.

2. Brealey, R. A. (2007). Principles of Corporate Finance. Tata McGraw-Hill Education.

3. Madhu, V. (2002). Multinational Financial Management. Excell Books Publications.

4. Pandey, I.M. (2010). Financial Management (10th ed.).Vikas Publication House.

5. Shah, P. P. (2005). Financial Management+ with CD Indian text edition. Dreamtech Press.

6. Van, Horne James, C. (2002). Financial Management & policy (12th ed.). Pearson Education India.

Additional Information

Evaluation Pattern

Evaluation Pattern:

 a. CIA 1 - 10% Marks (One Assignment, group or individual)

b. CIA 2 - 25% Marks (Written Exam for 2 Hrs)

c. CIA 3 - 30% Marks (15% One Assignment, 15% Quiz)
 
d. Attendance - 5%
e.End term exam - 30% (2 hours exam)