GUJARAT TECHNOLOGICAL UNIVERSITYMASTER OF BUSINESS ADMINISTRATION Year 2017-18 (Semester: –II) (W.E.F. Academic Year 2017-18) Subject Name: FINANCIAL MANAGEMENT (FM) Subject Code: __3529203___ Subject Credits: 3 Total Marks: 150 1. Course Objectives: a) Finance function assumes strategic importance as it is charged with the responsibility of maximizing the value of the firm. The course content will equip the students with conceptual understanding of finance and its practical application. b) The course also intends to make students gain the practical knowledge of various financial decisions of the organisation with the help of selected numerical problems available in various suggested text books. c) The course will help the students in applying the concepts of Financial Management in their role as Financial Managers. 2. Course Duration: The course duration is of 36 sessions of 75 minutes each. 3. Course Contents: Module No. of Marks Modules with its Contents/Chapters No. Sessions (out of 70) Overview of Financial Management - Meaning, Objectives, Scope and Functions of Financial Management (Financial Decisions), Finance and Related Disciplines, Financial Goal: Profit Maximization versus Shareholders’ Wealth Maximization, Role of the Financial Manager; I 08 14 Time value of Money- Concepts, Compounding, Discounting, Annuities; Valuation of Bonds and Shares; Sources of Long-Term Finance- Equity Shares, Preference Shares and Debentures Understanding Investment Decisions (Capital Budgeting Decisions) – Meaning, Features, Types and Importance of II Investment Decisions; Discounted Cash Flow (DCF) and Non-discounted Cash Flow Techniques; Financial and Combined Leverage. Traditional Approach. Dividend policy.Issues.NI Approach. Internal Select Scrip or bonds and do the valuation of its Evaluation) V Securities. Concept of the Opportunity Cost of Capital. Determinants of Working Capital. Operating Cycle. Risk Diversification: Systematic and Unsystematic Risk. Optimum Credit Policy. ABC Inventory Control System. MM Theory with and without Taxes. Dividend Theory. Risk-Return Trade-off Leverage . Weighted Average Cost of Capital (WACC). IV 08 14 Cash Management – Need. Working Capital Finance Policies. Preference Capital and Equity Capital. MM Theory of Dividend Irrelevance Working Capital Management. Cash Forecasting. Determining the Optimum Cash Balance under Certainty (Baumol’s Model) and Uncertainty (The Miller- Orr Model). working capital policy and cash budgeting etc. Cash Management Cycle. Issues in Working Capital Management.Cost of Debt. Study the investment decisions. . Component Costs of Capital . Estimating Working Capital Needs. Capital Asset Pricing Model (CAPM). Costs associated with Inventory. Credit Policy Variables Application: (30 Marks Select suitable organization and study: of CEC The role and functions of Finance department. 10 21 Cost of Capital – Significance. NOI Approach. III 10 21 Understanding Dividend Decision . Objectives and Determinants of Dividend Policy. Understanding Financing Decisions (Capital Structure Decisions) . Inventory Management –Significance and Objectives.Dividend Relevance .Operating.Walter’s Model and Gordon’s Model.Concepts of Working Capital.Nature and Goals of Credit Policy. Receivable Management. Forms of Dividend. Inventory Management Techniques (EOQ). (b) Solving the numerical according to the requirements of the chapters (c) Projects/Assignments/Quiz/Class Participation. Evaluation: The evaluation of participants will be on continuous basis comprising of the following Elements: Continuous Evaluation Component A comprising of Presentation. Publication 1 I M Pandey Financial Vikas Latest Edition Management Publication 2 Chandra Prasanna Financial Tata McGraw Latest Edition Management.4. Class (Internal Assessment. Teaching Methods: The course will use the following pedagogical tools: (a) Selected cases covering major courses. etc. Author Name of the Book Publisher Year of No. journals and books published by different authors may be prescribed. Hill theory and Practice 3 Khan and Jain Financial Tata McGraw Latest Edition Management Hill Note: Wherever the standard books are not available for the topic appropriate print and online resources. 5. Reference Books: Sr. 7. Publication 1 Ravi Kishore Financial Management – Taxmann Latest Edition Problems and Solutions Oxford Rajiv Srivastava & 2 Financial Management Higher Latest Edition Anil Misra Education 3 Himalaya 14th Revised Kulkarni. Ehrhardt Financial Management Cengage 14th Edition . Satyaprasad Financial Management Publication Edition 4 P C Tulasiyani Financial Management S. Projects.50 Marks) test/ Quiz. MCQs etc) B Mid-Semester examination (Internal Assessment-30 Marks) C End –Semester Examination (External Assessment-70 Marks) 6. Chand Latest Edition 5 Brigham. Author Name of the Book Publisher Year of No. Text Books: Sr. Discounted Cash Flow 9-11 (DCF) Expected: Discussing and Solving Numerical Examples Non-discounted Cash Flow Techniques 12-13 Expected: Discussing and Solving Numerical Examples Cost of Capital – Significance.Cost 14-16 of Debt. Risk-Return Trade-off Leverage . Times of India 2. Risk Diversification: Systematic and 17-18 Unsystematic Risk. Journals: Finance India. 21-24 NOI Approach. Scope and Functions of Financial Management (Financial Decisions). Objectives.Operating. Traditional Approach. Financial and Combined Leverage 19-20 Expected: Discussing and Solving Numerical Examples Understanding Financing Decisions (Capital Structure Decisions) . Preference Shares and Debentures Understanding Investment Decisions (Capital Budgeting Decisions) – Meaning.Meaning. List of Journals/Periodicals/Magazines/Newspapers.Dividend Relevance - Walter’s Model and Gordon’s Model. etc.Issues. Weighted Average Cost of Capital (WACC). Component Costs of Capital . Financial Goal: Profit Maximization versus Shareholders’ Wealth Maximization. Global Journal of Finance & Management. Discounting. capital market. Websites pertaining to companies. Annuities 3-4 Expected: Discussing and Solving Numerical Examples Valuation of Bonds and Shares 5-6 Expected: Discussing and Solving Numerical Examples 7-8 Sources of Long-Term Finance. News Paper: Business Standard. Dividend Theory. 6 Vyuptakesh Sharan Fundamentals of Financial Pearson 3rd Edition Management 7 R P Rastogi Financial Taxmann Latest Edition Management 8. RBI etc. 1-2 Overview of Financial Management . Objectives and Determinants of 25-28 Dividend Policy. Compounding. Session Plan: (36 sessions of 75 minutes) Session Topics to be covered Nos. 9. Economic Times. Finance and Related Disciplines. Types and Importance of Investment Decisions. 3. Features. Journal of Business & Financial Affairs etc. Role of the Financial Manager Time value of Money.NI Approach. MM Theory with and without Taxes Expected: Discussing and Solving Numerical Examples Understanding Dividend Decision . MM Theory of Dividend Irrelevance . 1. Preference Capital and Equity Capital Expected: Discussing and Solving Numerical Examples Capital Asset Pricing Model (CAPM). Forms of Dividend. Concept of the Opportunity Cost of Capital.Equity Shares.Concepts. Credit Policy Variables **************************************** . Estimating Working Capital Needs.Nature and Goals of Credit Policy. Cash Management Cycle. Working Capital Finance Policies Inventory Management –Significance and Objectives. Issues in Working Capital Management. 34-35 Determining the Optimum Cash Balance under Certainty (Baumol’s Model) and Uncertainty (The Miller-Orr Model) Receivable Management. Cash Forecasting. Costs associated with Inventory. ABC Inventory Control 32-33 System Expected: Discussing and Solving Numerical Examples Cash Management – Need. 29-31 Determinants of Working Capital. Operating Cycle. Inventory Management Techniques (EOQ). Working Capital Management.Concepts of Working Capital. Optimum Credit 36 Policy.