Course Objectives

On completion of this course the participants are expected to

• To learn the financial tools needed to make good business decisions
• To enable the basic insights of corporate finance theory
• To emphasize the application of theory to real business decisions

UNIT I

Meaning, Nature, Scope and Objectives of Financial Management - Role of Financial Manager. Time value of Money - Risk-Return relationship - Sources of finance.

UNIT II

Capital Budgeting: Definition-Concept – importance – Factors affecting capital Investment decisions- methods of appraisal - Capital Rationing - Risk analysis in Capital Budgeting (Probability and Decision Tree Analysis).

UNIT III

Cost of Capital: Definition- Computation for each source of finance and weighted average Cost of capital. Leverages - Operating leverage - Financial leverage - Composite leverage.

UNIT IV

Capital Structure: Meaning – Importance –Optimal capital structure - Theories of capital structure- Factors determining the capital structure, Dividend Policy: Dividend Decision and valuation of Firms –Determinants of Divided Policy- Types of Dividend policy – Forms of dividend.

UNIT V

Working Capital Management: Definition and Concept of working capital- Kinds and importance of working capital- Factors affecting Working Capital requirements – Management of working capital - Forecasting Working Capital requirements - Cash Management - Receivables Management - Inventory Management.

Learning Resources

• Working Capital Management: Definition and Concept of working capital- Kinds and importance of working capital- Factors affecting Working Capital requirements – Management of working capital - Forecasting Working Capital requirements - Cash Management - Receivables Management - Inventory Management.
• I.M.Pandey, “Financial Management”, 9th Edition, 2006, Vikash Publishing House Pvt Ltd., New Delhi.
• ShashiK.Gupta, R.K.Sharma, “Financial Management Theory and Practice”, 5th revised enlarged Edition, 2006, Kalyani Publishers, New Delhi.
• Dr.S.N.Maheshwari, “Financial Management Principles and Practice”, 1st Edition, 2005, Sultan Chan & Sons, New Delhi.
• Prasanna Chandra, “Financial Management–Theory & Practice”, 7th Edition, 2004, Tata Mc GrawHill, New Delhi