MMB 704 Financial Management L T P J S C

4 4
Course Owner
Course Pre-requisite(s)
Course Co-requisite(s)
Alternate Exposure
Dept of Finance Syllabus version 1.0
Contact hours 60
Date Approved

This course is designed to provide fundamental knowledge on financial management. The course will introduce
learners to - planning and acquisition of funds; effective utilization and allocation of the funds received or
acquired; and distribution of profits in a business.

Course Objectives
1. To introduce time value of money and risk return trade off.
2. To familiarize students with assumptions and concepts underlying the decision making.
3. To impart knowledge on capital structure, capital budgeting, working capital and dividend decisions.
4. To impart critical thinking skills in the area of capital budgeting and capital structure

UNIT - I Introduction to Financial Management No of Hours : 10

Nature, Scope, Goals and organization of finance function -The finance function and its interlinkages with other functional
areas of management -Finance Vs Accounting, Corporate Finance Vs Financial Management - Time value of money – PV and
FV in case of lumpsum, Annuities and Uneven Cashflows- Introduction to measurement of Risk and Return. (Numerical
Problems)

Learning Outcomes:
After completion of this unit, the student will be able to:
 Solve problems on future value of money in the context of personal finance L3
 Solve problems on present value of money in the context of personal finance including calculation L3
EMIs.
 Comprehend the linkage of finance function with other functions L2
 Discuss the risk and return in the context of personal investment decision L2
Pedagogy tools: Blended learning, Case let, video lectures, self reading

UNIT - II Cost of Capital and Capital Structure No of Hours :13

Cost of Capital and Capital Structure (Financing Decision): Sources of Finance for Business
–Classification of markets- Concept of Cost of Capital –Cost of equity, debt and WACC- Theories of Capital Structure –
Factors affecting Capital Structure Decision- Introduction to leverage- Types of leverages and Measurement. (N.P)

Learning Outcomes:
After completion of this unit, the student will be able to
 Solve for Cost of Equity, Debt and Preference capital L3
 Propose the capital structure alternative using 1) EBIT and EPS approach 2) WACC L5
 Comprehend the theories of capital structure L2
 Analyze operating, financial, and combined leverages for decision making L4
 Identify the sources of Long term and Short term finance L2
Pedagogy tools: Blended learning, Case let, video lectures, self-reading

UNIT - III Investment Decision No of Hours :14

Investment Decisions (CAPEX): Phases of Capital Expenditure Decisions, Capital Budgeting Process - Estimating cash flows
for capital budgeting - Capital Budgeting Techniques for decisions making – Introduction to Risk Adjusted Capital Budgeting
Techniques ( N.P)

Learning Outcomes:
After completion of this unit, the student will be able to
Analyze using capital budgeting techniques for decision making L4
Estimate cashflows for capital budgeting decisions L3
 MMB 704
Course Owner
Course Pre-requisite(s)
Course Co-requisite(s)
Alternate Exposure
Financial Management L T P J S C
4 4
Dept of Finance Syllabus version 1.0
Contact hours 60
Date Approved

Comprehend the phases in capital expenditure decisions L2

Pedagogy tools: Blended learning, Case let, video lectures, self-reading

UNIT - IV Working Capital Management No of Hours:13

Working Capital Management: Meaning of Working capital – Factors influencing working capital – Estimating
working capital requirement- Managing various components of Working Capital: Cash and Marketable
securities management; Accounts Receivable and inventory management- EOQ- Reorder levels – Inventory
cycle - Operating cycle – Cash Conversion cycle – Sources of financing working capital (N.P)

Learning Outcomes:
After completion of this unit, the student will be able to
 Estimate working capital requirement L3
 Prepare Cash Budgets L5
 Propose a credit policy using the accounts receivable information L5
 Solve for Operating cycle, Cash Conversion Cycle L3
 Understand the factors influencing working capital management L2

Pedagogy tools: Blended learning, Case let, video lectures, self-reading

UNIT - V Dividend Decision No of Hours:10

Dividend Decisions: Factors influencing dividend decisions-Classification of dividends – Theories of Dividend –Walters and
Gordon Model- MM Model.(N.P)

Learning Outcomes:
After completion of this unit, the student will be able to
 Comprehend factors influencing dividend decisions L2
 Understand the classification of dividend and their influence on EPS L2
 Illustrate the use of Gordon and Walters Model for dividend decision L3
 Distinguish the assumptions of relevance and irrelevance approach L4
Pedagogy tools: Blended learning, Case let, video lectures, self-reading

Textbook(s):
1. I.M. Pandey, Financial Management, Vikas Publication House, New Delhi
2. James C Van Horne and Sanjay Dhamija, Financial Management and Policy, 12th Edition, Pearson Publications
3. Richard A Brealey, Stewart C Myers, Franklin Allen and Pitabas Mohanty, Principles of Corporate Finance, Tata
McGraw Hill, New Delhi

Additional Reading
Reference Book(s): (All latest editions preferable)
1. Jonathan Berk, Peter DeMarzo, and Ashok Thampi, Financial Management, Pearson Education in South Asia,
2. Prasanna Chandra, Financial Management Theory and Practice, Tata Mcgraw Hill Publishing Company Ltd., New
Delhi.
3. Damodaran, Corporate Finance Theory and Practice, John Wiley & Sons
4. Rajiv Srivastava and Anil Misra, Financial Management, Oxford University Press
5. James C Van Horne, and John M. Wachowicz, Fundamentals of Financial Management, PHI
6. Financial Management, M Y Khan and P K Jain (8th ed.) McGraw Hill
 MMB 704 Financial Management L T P J S C
4 4
Course Owner Dept of Finance Syllabus version 1.0
Course Pre-requisite(s) Contact hours 60
Course Co-requisite(s) Date Approved
Alternate Exposure

Journal(s):
1. Indian Journal of finance
2. Journal of finance
3. The Review of Financial Studies

Websites:
1. https://ocw.mit.edu/courses/sloan-school-of-management
2. Corporate Finance - Course (nptel.ac.in)

Programme Objectives PSO

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3
CO1 1 1
CO2 2 1
CO3 1
CO4 3 1 2

1-Low, 2- Medium and 3- High Correlation