FINANCIAL MANAGEMENT(BCOM 501-18)

Teacher

Free

Course Objective: To provide an in-depth understanding of the core finance functions and
decisions in the area of corporate financial management. Further provide a practical and
problem insight for effective financial decision-making.

UNIT-I
Introduction to Financial Management: Meaning, Scope and Objectives of Financial Management. Functions and role of a financial Manager.
Time Value of Money– Compounding Techniques and Discounting Techniques.
Cost of Capital: meaning, significance and determination of Cost of Capital, Components
of Cost of Capital.
UNIT II
Capital Structure: meaning and features of capital structure decision. Factors affecting
capital structure. Theories of capital structure.
EBIT – EBTEPS –analysis .Financial and Operating Leverages
UNIT III
Capital Budgeting Decision: Meaning and Nature of investment decisions; process of
capital budgeting, investment evaluation criteria: Discounted and Non-Discounted Methods
(Pay-Back Period, Average rate of return, Net Present Value, Benefit Cost Ratio and Internal
Rate of Return. Capital rationing.
Dividend Policy Decisions – Determinants of dividend policy – types of dividend policy–
forms of dividend. Dividend theories: Walter’s Model- Gordon’s Model- MM’s Hypothesis
(problems)
UNIT IV
Working Capital Management: Planning and forecasting of working capital, importance of
adequate working capital- excess or inadequate working capital – determinants of working
capital requirement. sources of working capital Cash management, receivable management
and inventory management.