Course

Module 1

Module 1: Introduction to Finance and Time Value of Money (7.5 hours)

• Data Sources in Finance – A Walkthrough.
• Demystifying Company Annual Reports
• Financial Management – Goals, Principles,
• Risk Return Trade-off Agency
• Profit Vs Wealth Maximization
• Organization of the Finance Function and Role of Finance Managers
• Nature and Society as stakeholders in financial decision-making
• Time value of Money: Future Value and Present Value

Module 2

Module 2: Capital budgeting decisions (7.5 hours)

• Capital Budgeting
• Process, concepts of discounted cash flow
• Appraisal Techniques
• Payback period,
• Accounting Rate of Return,
• Net Present Value,
• Internal Rate of Return,
• Modified Internal Rate of Return,
• Profitability Index or Cost Benefit Ratio
• Estimation of Project Cash Flows
• Sources of Long-Term Finance
• Cost of Capital – specific costs and Weighted Average Cost of Capital

Module 3

Module 3: Financing Decisions (7.5 hours)

• Capital Structure Decision
• Leverage Analysis
• EBIT-EPS analysis
• Dividend Decision
• Dividend Policy and Firm Value – dividend discounting valuation models
• Gordon model
• Walter model
• Modigliani-Miller hypothesis

Module 4

Module 4: Working Capital (7.5 hours)

• Working Capital Policy & estimation of net working capital
• Estimation of net working capital
• Cash and Liquidity Management, cash budget
• Credit Management
• Inventory Management
• Sources of Short term / Working Capital finance.

Course Description

This course builds on the main concepts taught in the financial Accounting course in the 1st trimester. The course helps the students understand the basic framework of Financial Management. The focus of the course is to help the finance manager in making management decisions for maximizing shareholders’ wealth.

Course Outcomes& Learning Levels

At the end of this course, students will be able to:

1. Outline basic concepts of Financial Management (Understand)
2. Compare investments and select the best investment alternative (Apply)
3. Evaluate different sources of finance and decide the optimal capital structure (Analyze)
4. Plan the working capital requirements for business operations(Evaluate)

Evaluation Pattern 

*Based on assignments / Tests / Quizzes / Case Studies / Project / Term paper / Field visit report. 

Text Book and Materials

• I. M. Pandey. (2011). Financial Management (Edition 12), Pearson India, 7th Reprint 2023. ISBN: 9789390577255[IP]
• Harvard Business School Simulation and Cases.

Reference Text Books and Materials

1. Fundamentals of Corporate Finance – Richard A Brealey, Stewart C Myers and Alan Marcus – 10^th Edition 2019 – McGraw Hill, India [BMM]
2. Principles of Corporate Finance – Richard A Brealey, Stewart C Myers and Pitabas Mohanty – 12^th Edition 2019 – McGraw Hill – India [BMAM]
3. Corporate Finance – Stephen A Ross, Randolph W Wester field, Jeffrey Jaffe and Bradford D Jordan – 11^th edition 2018 – McGraw Hill – India.
4. Financial Management – Eugene Brigham and Michael C Ehrhardt, 14^th edition 2016, Cengage Learning – India.