SOM 606: Corporate Finance-I

Objectives
Finance covers any decision made by firms which have financial implications. Thus, there is finance
aspect to almost every decision taken by a firm, no matter which functional area claims
responsibility for it. The objectives of this course are:

To enable you to understand

 the evolution of finance as an independent subject
 the operating environment of finance manager
 differences among profits, funds, and cash
 analysis of corporate financial performance
 financial planning and forecasting
 the concept of working capital and working capital policy
 management of current assets and current liabilities
 financing of working capital

Pedagogy
The course will be based on lectures, discussions, case analysis, and problem solving.

Instructor
Prof. S Narayan Rao, Room No 201 ,Shailesh J Mehta School of Management, IIT Bombay, Powai,
Mumbai, e-mail: narayanr@som.iitb.ac.in

Evaluation
Component Weightage
Assignment 30%
End-term Exam 70%

Text Book (TB)

1. Financial Management: Theory and Practice –Prasanna Chandra, 10th Edition, 2019 (Mc Graw Hills)

References:

1. Fundamentals of Corporate Finance- by Stephen Ross , Randolph Westerfield & Jordan (McGraw Hill Pubs, 11th Edn, 2018)
2. Principles of Corporate Finance-Richard A Brealey &Steward C Myers (McGraw Hill Pubs, 12th Edn, 2018))
3. Corporate Finance-Theory and Practice-Aswath Damodaran(John Wiley & Sons, 2nd Edn, 2007)
4. Fundamentals of Financial Management-Brigham & Houston (Thomson,10th Edn, 2004)

1
 Session Plan

S No. Date/Day Topic/Activity Readings from TB/Cases

1 22 Sept’22 Introduction to Corporate Finance Ch. 1
2 26th Financial System Ch.2
3&4 29th & 3 Oct Funds Flow Analysis Ch.3
Case-1: Khan & Sons
5&6 6th &10th Oct Analysis of Financial Statements Ch 4
Case-2: Assessing a Company’s Financial
Health
7&8 13th &17th Long-term Financial Planning & Growth Ch.5
Case-3: Primo Benzina AG
9 20th Working capital policy Ch.23
10 & 11 27th &31 Oct Cash and Liquidity Management Ch.24
Case-4: Khanna Mfg Company
Case-5: Hampton Machine Tool
12 3rd Nov Credit & Inventory Management Ch.25 & 26
13 & 14th 7th & 10th N0v Sources of Working Capital Ch.20
Case-6: Tire City Inc