FINANCIAL MANAGEMENT (FM)

MBA –I SEM-II

MODULE –I

Chapter-1 Nature of Financial Management

1. Finance Functions & meaning

2. Objectives of Financial Management (Profit Maximization V/s Wealth

Maximization)

3. Role of Finance Manager

4. Agency Problem

5. Functions of Financial System (Prasanna Chandra)

6. Classification of Financial Markets (Prasanna Chandra)

7. Reserve Bank of India & SEBI (Prasanna Chandra)

Chapter-2 Concepts of Time Value of Money

1. Meaning of Time Value of Money

2. Relationship between Nominal rate of Interest & effective rate of interest

3. Future Value & sinking Fund Factor

4. Present Value & Capital Recovery Factor

Chapter-3 Valuation of Bonds & Shares

1. Concept of YTM & YTC

2. Valuation of Equity Shares – Dividend Capitalization

3. Valuation of Equity Shares – Super Normal Growth Rate (Multi-stage growth)

4. Concept of Duration

5. Relationship between Bond Maturity & Interest Rate

MODULE-II

Chapter 27 Principles of Working Capital Management

1. Concept of Working Capital

2. Operating & Cash Cycle

3. Factors affecting Working Capital

4. Permanent & Variable Working Capital

5. Approaches or Strategies to Working capital

Chapter 28 Receivables Management

1. Credit Policy

2. Credit Standards

3. Collection effort

4. Factoring – Meaning, Features, Types, Pros & Cons

Chapter 29. Inventory Management

1. Objectives of Inventory Management

2. Techniques of Inventory Management

3. EOQ

4. ABC Analysis

5. JIT

Chapter 30. Cash Management

1. Motives of Holding cash

2. Cash Budget

3. Lock-Box System

4. Miller-Orr Model

5. Baumol Model

Ch 31. Working Capital Finance

1. Trade Credit

2. Types of Bank Finance

3. Regulation of Bank Finance

4. Tandon Committee (MPBF)

5. Commercial Paper
MODULE III

Chapter 8. Capital Budgeting Decisions

1. Nature of Investment Decisions

2. Types of Investment Decisions

3. Techniques of Capital Budgeting

4. NPV v/s IRR

5. Concept of MIRR

Chapter 9. Cost of Capital

1. Significance of Cost of Capital

2. Capital Asset Pricing Model – CAPM

3. Concept of Risk free return, Beta

Chapter 10. Determining Cash flows for Investment Analysis

1. Cash Flow v/s Profit

2. Concept of Incremental Cash Flows

3. Concept of Incremental Depreciation & Salvage Value concept in

Replacement Decisions

Chapter 11. Complex Investment Decisions

1. Concept of AEV

2. Concept of Capital Rationing

MODULE IV

Chapter 14. Financial & Operating Leverage

1. Meaning & Measures of Financial Leverage

2. Financial Leverage & Shareholder’s Return ( Financial Leverage & EPS, Risk-
Return Trade off)

3. Meaning of Operating Leverage & Combined Leverage

4. Meaning of Indifference Point with example

Chapter 15. Capital Structure Theory & Policy

1. NI Approach

2. NOI Approach

3. Traditional View

4. MM Hypothesis (including Arbitrage process with example)

Chapter 20. Long-term Finance

Features, Pros & Cons of:

 1. Equity shares,

2. Preference Share

3. Debentures

4. Term Loans

Chapter 22. Asset Based Financing

1. Meaning of Lease financing & its types

2. Financial Lease v/s Operating Lease

3. Concept of Leveraged Lease

4. Lease financing v/s Hire Purchase

5. Hire Purchase Financing

Chapter 23. Venture Capital Financing

1. Meaning & Stages of Venture Capital financing

2. Features of Venture capital

3. Process of Venture Capital

4. Methods of Disinvestment ( Exit Strategy)

MODULE V

Chapter 17. Dividend Theory

1. Walter’s Model

2. Gordon’s Model

3. MM Hypothesis

Chapter 18. Dividend Policy

1. Objectives of Dividend policy

2. Forms of Dividend

3. Reasons for Paying Dividend

4. Stability of Dividends

5. Share Split

6. Bonus Shares

7. Share Buybacks