Syllabus (COMMERCE)

Course Type: MAJ-13

Semester: 7

Course Code: BCOMMAJ13T

Course Title: Financial Management

(L-P-Tu): 5-0-1

Credit: 6

Practical/Theory: Theory

Course Objective: The subject aims to help the students: 1. To understand the principles of finance, including sound financial decision-making, financial planning and leverages, and capital structure strategies. 2. To know the necessary technical knowledge and skills to evaluate companies' financial performance and position effectively. 3. Acquire the capabilities to identify and analyse financial issues, devise sound solutions, and make effective financial decisions.

Learning Outcome: learners will be able to: 1. Develop a better understanding of investments, financial analysis, and financial planning. 2. Increased ability to leverage financial tools to make business decisions. 3. Learn to create financial plans that optimize the use of resources and secure a company’s financing. 4. Acquire the ability to identify financial risks and create strategies to manage those risks.

Subject: Financial Management

Unit 1: Introduction (Lectures: 10)

Nature, scope, functions and objective of Financial Management, Time value of money, Risk and return, Valuation of securities – Bonds and Equities.

Unit 2: Investment Decisions (Lectures:10 )

The Capital Budgeting Process, Cash Flow Estimation, Payback Period Method, Accounting Rate of Return, Net Present Value (NPV), Net Terminal Value, Internal Rate of Return (IRR), Profitability Index, Capital Rationing (Basic concepts only).

Unit 3: Financing Decisions (Lectures: 15)

Cost of Capital: Sources of long-term financing, Estimation of components of cost of capital. Methods for Calculating cost of equity capital, Cost of Retained Earnings, Cost of Debt and Cost of Preference Capital, Weighted Average cost of capital (WACC) and Marginal cost of capital.

Unit 4: Capital structure: (Lectures: 15)

Theories of Capital Structure (Net Income, Net Operating Income, MM Hypothesis, Traditional Approach); Determinants of Capital Structure, Optimum capital structure.

Unit 5: Dividend Decisions (Lectures:10 )

Meaning and nature, Theories for Relevance and irrelevance of dividend decision for corporate valuation; Walter’s Model, Gordon’s Model and M-M Theory, Cash and stock dividends; Dividend policies in practice.

Unit 6: Financial Leverage (Lectures:10 )

Leverages; Financial, Operating and composite leverages. EBIT-EPS Analysis. Lease Financing, Venture Capital Financing

Reading References:

Agarwal, O.P., Financial Management, Himalaya Publishing House.

Avadhani, V.A., Investment Management, Himalaya Publishing House.

Banerjee, B., Fundamentals of Financial Management, PHI Learning.

Bhalla, V.K., Investment Management, S. Chand & Co.

Bhat, Sudhindra, Financial Management, Excel Books.

Brigham, Eugene F. & Houston, Joel F., Fundamentals of Financial Management, Cengage Learning.

Chandra, Prasanna, Financial Management, McGraw Hill Education.

Kapil, Financial Management, Pearson Education.

Khan, M.Y. & Jain, S.P., Financial Management, Tata McGraw Hill.

Kishore, Ravi. M., Financial Management, Taxmann.

Kulkarni, P.V. & Satyaprasad, B.G., Financial Management, Himalaya Publishing House.

Pandey, I.M., Financial Management, Vikas Publishing House.

Parasuraman, N.R., Financial Management: A Step by Step Approach, Cengage Learning.

Paul, S.K., Financial Management, New Central Book Agency, Kolkata.

Periasamy, F., Financial Management, Mc-Graw Hill Education.

Rustagi, R.P., Fundamentals of Financial Management, Taxmann.

Saxena, V.K. & Vashist, C.D., Basics of Financial Management, Sultan Chand.

Sharan, Fundamentals of Financial Management, Pearson Education.
Srivastava, R.M., Financial Management, Himalaya Publishing House.

Srivastava, R. & Misra, A., Financial Management, Oxford University Press.

Van Horne, Fundamentals of Financial Management ,Pearson Education.