IBS Hyderabad (Academic Year – 2021-22)

Course Handout: MBA (21-23)

Course Code : SLFI501 Semester : I
Course Title : Financial Management - I Room No : F-003
Faculty Name : Dr. Nitya Nand Tripathi Mobile No : 91977 943551
Consultation Hours (Day/time) : Monday/Tuesday/ 12:15-01:30 Email : Nityanand.tripathi@ibsindia.org

Course Description:
The course would add to the conceptual knowledge of the students through the discussion of important financial topics such as financial system; time value of
money; risk and return; cost of capital; equity valuation; bond valuation; capital budgeting; and the estimation of cash flows. The course would further help the
students examine the important tools and techniques useful in enhancing their critical thinking and developing decision-making skills in the context of a
corporate firm. The course also requires the students to complete a comprehensive project on risk-return characteristics of a firm in a real life scenario that
would enhance their report writing and presentation skills.
Course Objectives
At the end of the course, students are expected to:
• Apply various tools and techniques in the financial decision making activity.
• Comprehend the nature and scope of financial management and different types of financial markets.
• Appraise the time value of money, risk and return concepts through numerical.
• Assess firm’s cost of capital and do valuation of bonds and equities.
• Evaluate the project’s financial feasibility using various capital budgeting tools/techniques.
Learning Outcomes
• Develop in-depth qualitative and quantitative skills useful for financial decision-making.
• Critically think through a problem and generate a set of alternatives
• Comprehend the functioning of financial markets.
• Apply technical and digital literacies through applications of technology for decision making real life situations.
• Evaluate the cost of capital of a firm and project feasibility.
• Compute the intrinsic value of securities to make buy or sell decisions.
• Identify and implement strategies for maximizing shareholders’ wealth in a firm.
Recommended Text Book:
➢ Fundamentals of Corporate Finance by Stephen A. Ross, Randolph W. Westerfield, Jeffrey Jaffe, Bradford D. Jordan, and Ram Kumar Kakani, 12th
Edition, 2021, Mc Graw Hill Education (India) Private Limited
 IBS Hyderabad (Academic Year – 2021-22)
Suggested reference books:
• Financial Management – Illustrations (Volume-II) by Prasanna Chandra, M Y Khan and P K Jain, 1st Edition, 2017, Mc Graw Hill Education (India)
Private Limited
• Principles of Corporate Finance by Richard A. Brealey, Stewart C. Myers, Franklin Allen, 12th Edition, 2017, Mc Graw Hill Education (India)
Private Limited
Digital Tools
• NSE, BSE, RBI, and SEBI, FIMMDA websites to show various money market and capital market instruments
• Database: CMIE Prowess to analyze firm specific data
• Software: MS Office especially MS-Excel

Sessio Case/ Reading NPTEL Video Links Title and proposed by

Topic Learning Outcomes Chapters
n No. article
Recognize/Distinguish three
major decision making areas
pertaining to finance. Basics of Financial
Introduction
Appreciate the interface of 1. https://www.youtube.com/watch?v=Sx- Management-Part-1
01-02 to Financial Chapter 1
finance department with other dy96_tCQ Dr. A. Thillai Rajan,
Management
functional areas. Department of Management
Comprehend the roles and Studies, IIT Madras.
responsibilities of FM/CFO.
Depict the components of 1. https://www.youtube.com/watch?v=WOozU 1. Organization and Function
financial system. iNRd5M of Equity and Debt
Introduction Understand the characteristics, Chapter 1 Markets, IIT Kharagpur.
03-04 to Financial functions and types of financial and Faculty 2. https://www.youtube.com/watch?v=bp76hN 2. Markets for Investment,
Markets markets and instruments. Notes EIjAs IIT Kharagpur.
Narrate the role of financial 3. https://www.youtube.com/watch?v=dw8vrz 3. Project Finance Markets-
intermediaries and regulators. uvr7Y II, IIT Madras
Conceptualize and calculate the Calculating risk
mean, variance, standard and return of 1. https://www.youtube.com/watch?v=fGrS8f 1. Mod-01 Lec-03 Risk and
Risk and
deviation, co-variance, investments in a RilS4 Return, IIT Kharagpur
Return - Chapters-
5-10 correlation. portfolio (Part A
Concept and 11, 12
Estimating beta of securities. & B) (ICMR Case 2. https://www.youtube.com/watch?v=H9hvD 2. Mod-01 Lec-04 Risk and
Applications
Evaluate the risk & returns on Code: FINC/110 KLI-hQ Return (Contd.), IIT
individual securities & portfolio. and FINC/111) Kharagpur
 IBS Hyderabad (Academic Year – 2021-22)
1. https://www.youtube.com/watch?v=pbvsjM 1. Mod-04 Lec-09 Analysis of
Recognize the significance of LPcYY Project Viability Time value
ABC Wealth
time value of money. of Money, IIT Madras
Time Value Advisors (IBS
Enumerate various types of cash 2. https://www.youtube.com/watch?v=BP_hD 2. Mod-08 Lec-07 Time Value
of Money – Case
11-15 flows (single and multiple). Chapter-4 Ok5YEk of Money, IIT Guwahati
Concept and Development
Distinguish concepts of present 3. https://www.youtube.com/watch?v=CpC9E 3. Mod-20 Lec-21 Time Value
Applications Centre; Case
& future value of money. 0oc2Cc of Money, IIT Kharagpur
Code: FM0009)
Annuities & perpetuities.
Sessions 1 to 15
16 TEST-1
Chapters covered - 1, 4, 11, 12
Bond pricing theorems. 1. https://www.youtube.com/watch?v=8kE9W 1. Introduction to Bond
RIL Bonds
Bond Comprehend different methods AN1JE0 Analysis, IIT Kharagpur
17-19 (Faculty Chapter-8
Valuation of bond valuation, YTM and 2. https://www.youtube.com/watch?v=S1eUrr8 2. Bond Pricing and Yield, IIT
developed case)
principles of bond valuation. b3Ms Kharagpur
Understand different methods of 1. https://www.youtube.com/watch?v=PROdG 1. Valuation of Equity Shares
equity valuation like CAPM, BUvbjs – I, IIT Kharagpur
Equity dividend discount model, P/E
20-21 Chapter-9
Valuation and realized yield. 2. https://www.youtube.com/watch?v=Y7uxhL 2. Valuation of Equity, IIT
Analysis of intrinsic value of 3rMoI Kharagpur
equity share.
Conceptualize and calculate Ambuja Cement:
Cost of specific cost(s) of capital / Cost of Capital
Capital – weighted average cost of capital. (IBS Case 1. https://www.youtube.com/watch?v=Ev3cDv 1. Analysis of Project
22-24 Chapter-13
Concept and Identify cheapest source of Development LyzaM Viability Cost of Capital, IIT
Applications capital and arrive at marginal Centre; Case Madras
cost of capital. Code: FM0011)
Sessions 17 to 24
25 TEST-2
Chapters covered - 8, 9, 13
Rationale.
Capital Workshop mode
Estimation of project cash flows. 1. https://www.youtube.com/watch?v=3R9Wb 1. Financial Evaluation of
26-27 Budgeting – through templates Chapter-6
Cash flows vs. Accounting 7Zsqv8 Capital Decisions, IIT Delhi
Principles & spread sheets
profit.
 IBS Hyderabad (Academic Year – 2021-22)
Apply various discounted capital Evaluation of 1. https://www.youtube.com/watch?v=XQa8F 1. Mod-04 Lec-11 Analysis of
budgeting techniques like NPV, Capital yOoJ_w Project Viability Capital
Capital IRR, Benefit cost Ratio; and Investment Budgeting Techniques-I, IIT
Budgeting – non-discounted techniques like Projects (IBS Madras
28-30 Chapter-5
Tools and Payback period and ARR Case 2. https://www.youtube.com/watch?v=2Ow8J 2. Project Appraisal: Part II,
Techniques methods. Development UgRC1Q IIT Delhi
Understand the limitations of Centre; Case
capital budgeting. Code: FM0016)
Parameters for evaluation: Show the student how to:
1. Variance, standard deviation, and Access and collect the data
Using company’s data from
covariance, beta, estimating required return from databases like Prowess.
PROWESS database, each
using CAPM; Evaluate the risk & returns on Perform calculations in excel,
student is required to perform
individual securities as well as portfolio. report writing and presentation
31-33 Project Work risk-return analysis and
Apply risk and return in real life scenarios. using power point.
weighted average cost of
2. Computation of cost of equity, cost of
capital computation
debenture, cost of term loan, cost of
preference capital and weighted average cost
of capital
Expectations from Students
a. Students must report to the respective sessions well before the announced time. Latecomers will not be permitted to join the class after the scheduled
time. If late, the attendance for that session will be marked as absent.
b. Read the Case Study / material well prior to the class discussion. He/she is also expected to read the chapter indicated in the course plan as the faculty
directs. In the class discussion student is expected to participate actively and contribute to individual and group learning. Evaluation is based on active
participation.
Evaluation Timelines
Component Component Number Expected slot / due date Marks declaration by Weightage
th th
Test I 1 15 session 17 session 15
Project report (Test) II 2 22nd session 24th session 20 (15+5)
Test III 3 25th session 27th session 15
rd rd
Class Participation 4 33 session 33 session 10
End exam At the end of the semester As per schedule As per schedule 40
Total 100