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DEPARTMENT OF MANAGEMENT SCIENCES

INDIAN INSTITUTE OF TECHNOLOGY KANPUR

Syllabus: Financial Management (MBA607)

MBA607: Financial Management Dr. Suman Saurabh

Semester 2023-24-II sumans@iitk.ac.in
IIT Kanpur Department of Management Sciences (DoMS)

This course on Financial Management takes the finance managers (CFOs) in a company as its viewpoint. The
finance manager is entrusted with the responsibility to manage the finances for the day-to-day operations of the
company as well as adequately plan the firm’s requirement of capital to achieve long-term growth. The course
will begin with the basic building blocks in finance and study the tools of financial analysis and planning. A
detailed emphasis will be on the three crucial corporate finance decisions: investment, financing, and payout.
Capital budgeting techniques, working capital management, capital structure decisions, initial public offering
(IPOs) of debt and equity instruments will comprise the bulk of this course. This applied course will primarily
employ lectures, media articles, blogs, and case studies to introduce financial tools needed to take these corporate
decisions. We will learn about the world of corporate finance and financial management by engaging in projects
simulating the real-world experience of the Valuation of a firm. We ultimately are aiming to pick the skillsets
needed to be a) a finance manager in a firm, b) be an equity research analyst, and c) an investment banker.

A. Course Contents

Introductory ideas: Role of financial management, Fundamentals of financial statement

Tools of corporate finance:
Major corporate finance decisions:
Business valuation:
Advanced topics:
analysis;
Time value of money, Basics of Valuation, Ratio analysis;
Capital budgeting techniques, Investment decision, Project analysis,
Financing decision, Capital structure, Leverage and cost of capital,
Payout decision, Dividend theory, Working capital management;
Valuation of firms;
IPOs, Venture capital, Private Equity, Hedge funds, Startup financing &
Valuation

B. Administrative Structure
Prerequisite
• Accounting and Finance (MBA601)

Contact Information and Office Hours

• Instructor: Suman Saurabh
o Email: sumans@iitk.ac.in

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o Phone: 0512-259-2015
o Office: Room No. 312, Department of Management Sciences (DoMS) Building
o Office hours: Mondays (03:30 pm – 05:00 pm) or by appointment
• Teaching Assistants: To be announced (office hours by appointment)

Schedule and Classroom

• Tuesdays and Wednesdays, 12:00 pm – 13:15 pm [Classroom: C5, DoMS 3rd Floor]

Course Material
• Course lecture notes
o Lectures notes and other supporting material will be shared at HelloIITK platform
(https://hello.iitk.ac.in/mba607sem22324/#/home)

• Textbooks
o HW: Fundamentals of Financial Management, 13th Edition
J. Van Horne and John M. Wachowicz

o BES: Case Studies in Finance – Managing for Corporate Value Creation, 6th
Edition, McGraw Hill
Robert F. Bruner, Kenneth M. Eades, and Michael J. Schill
o BMAM: Principles of Corporate Finance, 11th Edition
Richard A. Brealey, Stewart C. Myers, Franklin Allen, and Pitabas
Mohanty
• Additional material
o Handouts and other online resources will be shared through email alias (MBA607@iitk.ac.in)
and/or at HelloIITK.

C. Requirements and Grading

Attendance Policy
• You are expected to attend all the classes. Attendance record will count towards some weightage in the
class participation score.

Evaluation Policy

Component Weight Detail

Class participation (CP) 20% • Attendance, active engagement and participation in
class
• Individual contributions in case and project
presentations
• Submission of periodic additional CP assignments and
satisfactory performance in surprise quizzes

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Course Project & Case 30%
presentation (group)
• Detailed instructions about the assignments and
projects will be shared through email.
• Assignments and Projects will need to be submitted at
the specified Google Drive link or HelloIITK
assessment section before the deadline.
• Late submissions will result in a 50% deduction in
the score obtained in the respective component.
• The grading for these components will have six scales
(+++, ++, +, -, --, ---).

Mid-Term Exam 25% • The mid-term and end-term exam date for the course
End-Term Exam 25% will be shared on the DOAA website.

Grading Policy
• Final grades will be based on an individual’s relative performance in the class.

D. Course Policies

• Make-up exams:
o DOAA guidelines on make-up exams will be followed. To be excused from the mid-term or end-
term exam, you must contact the instructor at least a day before the exam and be prepared to
furnish the documented evidence of the reason for missing out on writing the exam on the
scheduled date.

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E. Course Outline

• The following is a tentative course outline. There may be minor deviations in the sequence of topics. The
alterations could be on account of pace, material difficulty, and student preparedness & interest in the
class discussions. You are also advised to follow the class announcements and email regarding the
course schedule.

Class # Topic Resource

Introduction to Financial Management
1 Introduction, Role of a financial manager Handouts
2 Financial management: Treasurer versus Illustrations
Controller HW Ch1
Introduction to Financial Statements Analysis
3-4 Case: The Thoughtful Forecaster [I] BES Ch6
Elements in Financial Statement Analysis Illustrations
Project Briefing: Phase 1
The Investment Decision
5-6 Capital Budgeting and Capital Rationing BMAM Ch2,5
7-8 Application of NPV in Business Decisions BMAM Ch6
Case: The Investment Detective [G] BES Ch17
Advanced Issues in Capital Budgeting
9 Case: Worldwide Paper Company [G] BES Ch18
Project Analysis BMAM Ch10
10 Case: Target Corporation [G] BES Ch19
11-12 Real Options and Decision Trees BMAM Ch10
Project Briefing: Phase 2
Managing the Operations: Working Capital & Financing
13-14 Working Capital Management HW Ch8
15-16 Receivables Management HW Ch10
17 Inventory Management HW Ch10
18 Cash and Payables Management HW Ch9, 11
19 Short Term Financing HW Ch11
Project Briefing: Phase 3
Finance and Strategy: The linkage

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20 Finance and Strategy BMAM Ch11

The Financing Decision
21 Financing Decision BMAM Ch14
22 IPOs BMAM Ch15
Case: JetBlue Airways IPO Valuation [G] BES Ch28
23 Debt Policy BMAM Ch17
Project Briefing: Phase 4
24 Leverage and Cost of Capital BMAM Ch18
Case: Nike Inc.: Cost of Capital [G] BES Ch14
25 Financing and Valuation BMAM Ch19
26 Optimal Leverage and Financial Distress BMAM Ch18,19
Case: California Pizza Kitchen [G] BES Ch33
The Payout Decision
27 Payout Policy BMAM Ch16
Emerging trends in Corporate Finance
28 Financial Management and Strategy: Best Handouts
Practices

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