Course Course Name L-T-P -Credits Year of Introduction

code.
IE366 FINANCIAL MANAGEMENT 3-0-0-3 2016
Prerequisite: Nil
Course Objectives
 To build an understanding of concepts, vital tools and techniques applicable for financial
decision-making by a business firm.
 To understand the use of basic financial management concepts.
 To become familiar with the various types of financing available to a firm.

Syllabus
Nature and Scope of Financial Management; Time Value of Money, Cash Flow Statement and its
Interpretation, Financial Statement Analysis, Sources of Finance, Capital Structure; Dividend
Decision; Fixed and Current, Short-term financial planning, working capital–planning and
management, Capital Budgeting, Basic International Capital Budgeting.

Expected outcome.
The students will be able to
i. Obtain an overview of financial system.
ii. Analyze financial statements using standard financial ratios.
iii. Apply techniques to project financial statements for forecasting long-term
financial needs.
iv. Explain the role of short-term financial needs.
v. Apply time value, risk, and return concepts.

Text Books:
1. Khan, M. Y. and Jain P. K., Financial Management, Text, Problems & Cases, Tata
McGraw Hill Company, New Delhi, 2007.
2. Pandey I. M., Financial Management, Vikas Publishing House Pvt. Ltd., 2009.
3. Prasanna Chandra, Financial Management: Theory and Practice, Tata McGraw Hill,
2011.
References:
1. Bhalla. V. K., Financial Management and Policy: Text and Cases, 9th Edition, Anmol
Publications Pvt. Ltd, 2009.
2. Brigham. Eugene F. and Houston. Joel F., Fundamentals of Financial Management, 10th
Edition, Cengage Learning, 2006.
3. Gitman, L. J., Principles of Managerial Finance, New York, 2006.
4. Sheeba Kapil, Financial Management, Pearson Education, 2010.
5. Van Horne and C. James, Principles of Financial Management, Pearson, 2002.
Course Plan
End Sem.
Module Contents Hours Exam.
Marks
Nature and Scope of Financial Management; Financial
I Objectives; goal of financial management, FM decisions, Time 7 15%
Value of Money, Computation of EMI, Annuity, Annuity Due.
Funds Flow Analysis; Cash Flow Statement and its
II Interpretation, Financial Statement Analysis, Ratio Analysis, 7 15%
Time Series, Common Size Statements, Du Pont Analysis.
FIRST INTERNAL EXAMINATION
 Planning for Sources of Finance (Domestic and International);
Capital Structure; Net Income Approach; Net Operating Income
III Approach; Traditional Approach and MM Approach, Cost of 7 15%
Capital; EBIT – EPS Analysis, Capital Gearing/Debt-Equity
Ratio, Generation of Internal Funds.
Retained Earning Vs. Dividend Decision; Gordon Model;
Walter Model; MM Approach; Lintner Model; Planning of
IV Funds through Management of Assets - Fixed and Current, 7 15%
Short-term financial planning.

SECOND INTERNAL EXAMINATION

Working capital–planning and management. Management of
Cash (Various Theoretical Models), Inventories (Including Risk
V 7 20%
Analysis) and Receivables; Operating Cycle.

Capital Budgeting - Conventional and DCF Methods; capital

budgeting decision criteria, NPV–IRR comparisons, capital
VI 7 20%
rationing, risk analysis. Basic International Capital Budgeting.

END SEMESTER EXAM

End Semester Examination Question Paper Pattern:

Examination duration: 3 hours Maximum Marks: 100

Part A (Modules I and II):

Candidates have to answer any 2 questions from a choice of 3 questions. Each full question
carries a total of 15 marks and can have a maximum of 4 sub questions (a, b, c, d). No two
questions shall be exclusively from a single module. All three questions shall preferably have
components from both modules. Marks for each question/sub question shall be clearly
specified. Total percentage of marks for the two modules put together as specified in the
curriculum shall be adhered to for all combinations of any two questions.

Part B (Modules III and IV):

(Same as for part A marks)

Part C (Modules V and VI):

(Same as for part A, except that each full question carries 20 marks)

Note: If use of tables and charts are permitted for the university examination for this course,
proper direction of the same should be provided on the facing sheet of the question paper.