Type Code Subject Name L-T-P Credits Marks

OE Financial Management 3-0-0 3 100

Silicon Institute of Technology, Bhubaneswar

Objectives To offer the students relevant, systematic, efficient and actual

knowledge of financial management that can be applied in practice
with making financial decisions and resolving financial problems

Pre-Requisites (if any) Basic knowledge on concepts of finance

Teaching Scheme Regular classroom lectures with use of ICT as needed. Each session
is planned to be interactive with real-life examples.

Teacher’s Assessment Institute Assessment

Quiz Surprise Test(s) Assignment(s) Mid-Semester End-Semester Total
05 05 05 25 60 100

Evaluation Scheme

Detailed Syllabus
Module # Topics Hours
Introduction: Business Finance- Concept, types and scope; Financial
management- objectives, functions and scope; Interface of financial
Module 1 management with other functional areas; Role of Finance Manager; 10 Hours
Financial forecasting and Financial planning; Risk and Return-
concept, Relationship between risk and return, Risk Diversification.

Investment decisions: Capital Budgeting Process; Techniques of

Capital Budgeting- Discounted and Non- Discounted Cash Flow
Methods; Capital Rationing; Risk Evaluation and Sensitivity
Module 2 8 Hours
Analysis. Estimation of cash flow for new project and replacement
projects, Risks in capital budgeting,

Financing Decisions: Sources of long-term financing, Estimation of

components of cost of capital, Methods for calculating Cost of
Module 3 Equity, Cost of Retained Earnings, Cost of Debt and Cost of 8 Hours
Preference Capital, Weighted Average Cost of Capital (WACC).
 Dividend Decisions: Dividend and its forms, objectives of dividend
policy, relevance and irrelevance. Factors affecting the dividend
policy, Dividend payout procedures, Types of dividends, Measures of
Module 4 6 Hours
dividend policy, Theories of dividend decisions-Walter’s Approach,
Gordon’s Approach, MM Approach.

Working Capital Decisions: Concepts of working capital, sources of

short-term finance, working capital estimation, Cash budgeting, long
term cash forecasting, optimal cash balance, investment of surplus
fund. Inventory Management‐need for inventory, order quantity‐EOQ
model, monitoring and control of inventory, Receivables
Module 5 10 Hours
Management‐Meaning and objective, cost and benefit of receivable
management, factors influencing the size of investment in
receivables, credit evaluation of individual accounts, monitoring
accounts receivable

Total 42 Hours

Text Book:

T1. M. Y. Khan and P.K. Jain, Financial Management, 7th Edition, McGraw Hill Education,
2017.

Reference Books:

R1. R. A. Brealey, S. C. Myers and F. Allen, Principles of Corporate Finance. 12th Edition,
McGraw Hill India, 2018.

R2. C. Prasanna, Financial Management Theory & Practice, 10th Edition, Tata McGraw Hill,
2019.

R3. J. C. Vanhorne, J. M. Wachowicz Jr, Fundamentals of Financial Management, 12th

Edition, Pearson Education Limited, 2004.

R4. L. J. Gitman, Principles of Managerial Finance, 13th Edition, Pearson Education limited,
2017.

R5. I. M. Pandey, Financial Management, 11th Edition, Vikas Publishing House, 2016.
 Online Resources (s):

1. https://bbamantra.com/financial-management-introduction-part-1/

2. http://www.finance4nonfinancemanagers.com/financemanagement/introduction-to-financial-
management/
3. https://www.accountingtools.com/articles/what-is-capital-budgeting.html

4. https://cleartax.in/s/capital-budgeting

5. https://www.businessmanagementideas.com/financial-management/cost-of-capital/cost-of-
capital-concept-components-importance-example-formula-and-significance/19601

6. https://efinancemanagement.com/dividend-decisions

7. https://efinancemanagement.com/working-capital-financing/working-capital-management

Course Outcomes: On completion of this course, the students will be able to

CO1 Understand the concept of financial management and its application
CO2 Evaluate engineering projects through different accounting tools
CO3 Calculate the cost of capital and other financial indicators of different projects
CO4 Assess the factors affecting dividend decisions and its policy

CO5 Apply techniques in managing working capital

Program Outcomes relevant to the Course:

PO6 The engineer and society: Apply reasoning informed by the contextual knowledge to
assess societal, health, safety, legal and cultural issues and the consequent
responsibilities relevant to the professional engineering practice
PO7 Environment and sustainability: Understand the impact of the professional
engineering solutions in societal and environmental contexts, and demonstrate the
knowledge of, and need for sustainable development.
PO8 Ethics: Apply ethical principles and commit to professional ethics and responsibilities
and norms of the engineering practice.
PO9 Individual and team work: Function effectively as an individual, and as a member or
leader in diverse teams, and in multidisciplinary settings.
PO10 Communication: Communicate effectively on complex engineering activities with
the engineering community and with society at large, such as, being able to
comprehend and write effective reports and design documentation, make effective
presentations, and give and receive clear instructions
PO11 Project management and finance: Demonstrate knowledge and understanding of the
engineering and management principles and apply these to one’s own work, as a
member and leader in a team, to manage projects and in multidisciplinary
environments.
 PO12 Life-long learning: Recognize the need for, and have the preparation and ability to
engage in independent and life-long learning in the broadest context of technological
change.

Mapping of CO’s to PO’s: (1: Low, 2: Medium, 3: High)

Course PO1 PO2 PO3 PO4 PO5 PO6 PO7 PO8 PO9 PO10 PO11 PO12
CO1 1 1 1 3 1
CO2 1 1 3 1
CO3 1 1 3 1
CO4 1 2 1 3 1
CO5 1 1 1 3 1