LOVELY PROFESSIONAL UNIVERSITY Term: 2nd Course No. MGT 333Course Title: Basic Financial Management L: 3 T: 1 P: 0 Textbook: 1.

Pandey, I.M. Financial management, Vikas Publication House, New Delhi(2007), 9th edition References: 2. Ch 1,Ch 20, Gupta,Shashi K, Kalyani Publications, New Delhi(2007), 6th Edition. 3. Ch 27, 28 , Khan. MY and PK Jain, Financial Management, Tata McGraw Hill, New Delhi(2007), 5th edition. 4. Ch 1, Ch 17, Chandra, Prasana, Financial Management, Tata McGraw Hill, New Delhi(2007), 6th Edition. Other readings: S. No Journal articles as compulsory reading (Complete reference) 5 Narayan Rao Sapar ;An Empirical Study on the Determinants of the Capital Structure of Listed Indian Firms; Social Sciences research network http://papers.ssrn.com/sol3/papers.cfm?abstract_id=433120 Manoj Anand ; Working Capital Performance of Corporate India; ICFAI Journal of Applied Finance, Vol. 13, No. 1, pp. 46-81, January 2007 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=958669 Manoj Anand; Factors Influencing Dividend Policy Decisions of Corporate India; ICFAI Journal of Applied Finance, Vol. 10, No. 2, pp. 5-16. February 2004, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=621981 Dr. Lokanandha Reddy Irala ;Financial management practices in India-Social Science Research Network http://papers.ssrn.com/sol3/papers.cfm?abstract_id=964132 Salient Features Updated finance articles Latest Finance papers Latest finance news and finance glossary Articles related to Corporate Finance Insight into editorials, forums,interviews related to finance

Relevant websites: S. Web address (Exact page address) No 9 10 11 12 13 www.financialmanagement.org http://papers.ssrn.com/sol3/results.cfm http://www.bloomberg.com/invest/glossary/bfglosf.htm http://businessfinancemag.com/corporate-finance http://economictimes.indiatimes.com/opinionshome/897228639

Detailed Plan for Lectures

Lecture No.

Topics to be discussed: Outline of the Lecture

Chapters / Sections of Textbook / Other reference1

Assignment / Task to be assigned to students 3 DoS4

Pedagogical Date aid Delivered2 Demonstratio n/ case study / images/ animations etc5.

1. 2. 3.

Meaning of Financial Management, Profit Maximization objectives, EPS Wealth Maximization Objective, Pros and cons Scope of Financial Management: Traditional and modern Approach Finance Functions an overview of Investment decision, Financing Decision, Liquidity decision Finance Functions: Dividend Decision, Risk and return Trade off in terms of finance functions

1/Ch 1 2/Ch 1 1/Ch 1 2/Ch 1 1/Ch 1 2/Ch 1 Ref. 8 1/Ch1 4/Ch 1 1/Ch1 4/Ch 1 Case Study: Bharat Heavy Electronics Ltd

Case Study: Anandnagar Electricity Company

4.

5.

6. 7. 8.

Source of Finance Long term sources: Equity shares Features Long Term Sources: Preference Shares; Features Long term Sources- Debentures, Term Loans; Terms and features relevant to present scenario, Medium Term Sources Sources of Finance: Short Term Sources Sources of Finance: Short Term Sources

1/Ch 20 4/Ch 17 1/Ch 20 2/ Ch 20 1/Ch 20 2/ Ch 20 2/ Ch 20 3/Ch 27,28 2/ Ch 20 3/Ch 27,28

9. 10.

Case Study: Delight furniture Company

11.

Cost of Capital: Time Value of Money: Present Value (Basics using tables) Time Value of Money: Future Value, Net Present Value (Basics using tables) Cost of Capital: Concept and its

1/Ch 2 1/Ch 2 2/Ch 2 1/Ch 9 Excel Application: Calculating PV,FV,NPV

12.

13.

14. 15. 16. 17.

significance Cost of Capital: measurement of cost of capital of various sources of funds; Cost of Debt Cost of Capital: Cost of Preference Cost of Capital: Cost of Equity, Cost of Retained Earnings Cost of Capital: Weighted Average Cost of Capital Capital Structure Decision: Define ,Understanding debt and equity Capital Structure Decision: Concept of Financial Leverage, Effect on EPS Capital Structure Decision: Theories of Capital Structure; Net Income Theory Capital Structure Decision: Traditional Theory Capital Structure Theory: Irrelevance theory :Net Operating Income Capital Structure Theory: M&M Theory

1/Ch 9 1/Ch 9 1/Ch 9 1/Ch 9 Case Study: Hindustan Lever Ltd

18. 19. 20. 21. 22.

1/Ch14 2/Ch 17 1/Ch14 2/Ch 17 1/Ch 15 2/Ch 17 1/Ch 15 2/Ch 17 Ref No 5 1/Ch 15 2/Ch 17 1/Ch 15 2/Ch 17

23.

Case Study: Central Equipment Comapany CaseStudy: Samrudh Company Ltd

24.

Capital Budgeting :Define, Type of Investment Projects, Importance Capital Budgeting :Analytical study of various methods : Net Present Value Method Discounting Methods: Internal Rate of Return Profitability Index Method, Non Discounting Methods:

1/Ch 8

25. 26.

1/Ch 8 1/Ch 8 Excel Application: IRR and NPV Comparision

27.

1/Ch 8

28.

Accounting Rate Non Discounting: Pay Period, Discounted Payback Period Working Capital : Concept, Types, Determining working capital requirement Factors Working Capital Basics of receivables: Forming Credit Policy Working Capital Inventory management: EOQ, Reorder Point Working Capital cash management: Motives, Management Dividend Policy; Concept, Forms of dividend, Determinants of forming Dividend Policy Dividend Policy; , Theories of dividend: Walter Theory Dividend policy: Gordon Theory

1/Ch 8

Case Study: Gupta BricksBulls Trench Kiln

29. 30. 31. 32. 33. 34. 35.

1/Ch 27 Ref No 6 1/Ch 28 1/Ch 29 1/Ch 30 Ref No 7 1/Ch 18 2/Ch 25 1/Ch 17 2/Ch 25 1/Ch 17 2/Ch 25 Excel Application: Gordon, Walter Models 1/Case study(Reliable Taxmill Ltd)

36.

Dividend Policy: M& M Theory

1/Ch 17 2/Ch 25

1. 2. 3. 4. 5.

Additional material for spill over (for at least 2XL lectures) Financial Planning Cash Budget Preparation Financial Statement Analysis: Income Statement/Balance Sheet Ratios Electronic Commerce Stock Splits, Stock Repurchase

Notes: 1. Use S. No of the reading above 2. To be filled in on the date of delivery of lecture by the instructor 3. Put assignment number from Assignment Table (below) against the lecture in which planned to be assigned (by co-ordinator). 4. To be filled in on the date of assignment (by the instructor) 5. Do not write Lecture, OHP, LCD projector etc. Details of Assignments Planned:

Assignment No. A1

Details Prepare a Business Plan, giving an outlay of expenditure required, justifying the purpose; also determining sources of Finance

Nature of Assignment Group Assignment

Expected outcome Create a mindset of starting a business, in which all the concepts of FM can be used till the end of the term.

A2

Numerical Questions on Cost of Test Based on Capital and taking test based on assignment assignment for evaluation Numerical Questions on Capital Test Based on Budgeting and capital Structure Assignment Theories Study Dividend Policy of a company for last 5 years, highlighting Percent, Type and form of dividend given Individual Assignment

Application of cost of capital formulae Practice of Numerical Questions from Paper point of view Linking to the present scenario of companies in the payment of dividend

A3

A4

Term paper to be allotted by lecture no.: 9 Scheme of CA: (out of 100) Component Attendance Quiz Term paper Assignments Case Based Presentation Frequency 2 1 4 2

Due date of term paper:2 wks before the close of term

Marks out of 100 10 20 10 40 20

List of suggested topics for Term Paper

S. No 1 Topic Outline detailed information regarding the assigned company in terms of its background, history, management; Company position relative to industry Change in its share price over a year Capital Structure for last 3 years; Dividend Policy for last 5 years; Liquidity position; Financial Credibility through balance sheet, Profit and loss A/C Credit Rating of company

 IPO issues made by company during last 5 years Track and report news relevant to company chronologically (date wise) and its impact on share price of company. (Note:This term paper may be assigned to any number of students allotting a different company to each student.)

List of Cases
Case No. 1. Title Bharat Heavy Electricals Ltd. (BHEL). Anandnagar Electricity Company Reference Pandey I.M , Financial Management, Vikas Publications , 9th Edition, p.16. Pandey I.M , Financial Management, Vikas Publications , 9th Edition, p.15 Pandey I.M , Financial Management, Vikas Publications , 9th Edition, p.444 Pandey I.M , Financial Management, Vikas Publications ,9th Edition, p. 413 Pandey I.M , Financial Management, Vikas Publications ,9th Edition, p. 350 Pandey I.M , Financial Management, Vikas Publications ,9th Edition, p. 395 Pandey I.M , Financial Management, Vikas Publications ,9th Edition, pp.310312.

2.

3.

Delight furniture Company Ltd.

4.

A.C. Company Ltd.

5.

Samrudh Company Ltd

6.

Reliable Taxmill Ltd

7.

Central Equipment Company.

8.

Gupta Bricks- Bulls Trench Kiln and Vertical Shaft Brick Kiln.

Srivastawa Rajiv and Misra Anil, Financial Management, Oxford, 1st Edition, pp.296-297, 330-331

Proposed changes from the standard pedagogy for the course:

Prepared by ( instructional planner: Name, Signature & date)

Comments of HOFD (Chief Academic Officer) Signature & Date

Report

Signature & Date

Comments of Dean of Faculty

Signature & Date

Report
Lectures: - (to be filled by the instructor and submitted at the end of term of HOS through HOD) S. No Innovation introduced [ New pedagogy, new Topic and lecture number where demonstration, case study, teaching aid, etc. introduced NOT part of the instructional Plan

General Comments of the Instructor about the suitability of IP

Conduct of Tutorials Tutorial No. 1 2 3 4 5 6 7 8 9 10 11 12 Syllabus coverage report

Syllabus coverage by one week before MTE Satisfactory / Lagging by ___ lectures. Syllabus coverage by two week before ETE Satisfactory / Lagging by ___ lectures.

Date

Topics covered in the Tutorial

Activities (like quiz, case study, doubt clearing, any other)

____________________
Signature of Instructors & date

________________
Signature of HOD & date