MBA 711: FINANCIAL MANAGEMENT
Credit Hours: 2
Course Description
The course is designed to equip MBA students with the basics of corporate financial management,
theories and techniques. The primary objective is to provide a framework, concepts, and tools for
analyzing financial decisions based on fundamental principles of modern financial theory. The
approach is rigorous and analytical.
Topics covered include financial analysis and planning as well as cash flow techniques, corporate
capital budgeting, both under certainty and uncertainty; valuation of long term securities. The course
will also analyze corporate financial policy, including capital structure, cost of capital, dividend policy,
and working capital management as well as other additional topics, to be included, according to
individual instructors.
Content:
Chapter 1: Introduction to Financial Management
Meaning and scope of Finance
Types of Finance
Finance Function
Financial Manager Role in a
Business Enterprise
Financial Goals of a Business
Enterprise
Financial Goals of a Business
Enterprise
Goal Conflict Agency Problem
Organization of Finance
Function
Chapter 2: Concepts of Time, Value and Return in Financial Management
2.1 Time Preference for Money
2.2 Required Rate of Return
2.3 Future Value, Present Value, Net Present Value
2.4 Yield
Chapter 3: Valuation of Securities
3.1 Bonds Values and Yields – computational methods
3.2 Valuation of Preference Shares
3.3 Valuation of Equity Shares
Chapter 4: Capital Budgeting
4.1 Investment decisions – Meaning and Significance
4.2 Types of Investment Decisions
4.3 Investment Evaluation Criteria
4.4 Capital Budgeting Techniques: Net Present Value Method, IRR, PBP
4.5 Capital Rationing an d Conflict Ranking
Chapter 5: Cost of Capital, Capital Structure and Leverage Analysis
5.1 Meaning and Significance of Cost of Capital
5.2 Computation of Cost of Debt, Cost of Preference Capital, Cost of Equity
5.3 Cost of Equity and CAPM
5.4 Weighted Average Cost of Capital
5.5 Capital Structure and Leverage
5.6 Financial, Operating and Combined Leverages
Chapter 6: Dividend Policies and Decisions
6.1 Dividend and Dividend Policy
6.2 Computation of POR,PER and Dividend Yield
6.3 Dividend Plolicy: Conflicting viewpoints
6.4 Constraints on Paying Dividends
6.5Stable Dividend Policy-Merits and Dangers
6.6 Forms of Dividends
Chapter 7: Working Capital and Cash Management
7.1 Working capital - Meaning and Concept
7.2 Operating and cash conversion cycle
7.3 Determinants of Working Capital
7.4 Significance of Working Capital Management
7.5 Approaches to Working Capital Management
7.6 Facets of Cash Management
7.7 Motives of holding cash
7.8 Cash Planning and Forecasting Techniques
7.9 Investing Surplus Cash Profitably - Criteria and Options
Chapter 8: Receivables and Inventory Management
8.1 Credit Management - Meaning and Objectives
8.2 Decision Variables of a Credit Policy
8.2 Decision Variables of a Credit Policy
8.3 Kinds of Credit Policies
8.4 Nature of Inventory - Motives for Holding Inventory
8.5 Objectives of Inventory Management
8.6 Inventory Management Techniques - EOQ - Maintenance of Stock Levels
8.7 Inventory Control Systems
Chapter 9: Working Capital Financing
9.1 Trade Credit
9.2 Accrued Expenses and Deferred Income
9.3 Bank Finance - Different Forms of Bank Finance
9.4 Commercial Paper
9.5 Factoring Accounts Receivable
Chapter 10: Long - Term and Asset - Backed Financing
10.1 Long - Term Finance:
Shapers - Preferred and Equity
Debentures
Term Loans - Convertible Debentures
10.2 Asset - Backed Finance:
Leasing and Hire Purchase.
MODE OF TEACHING-LEARNING PROCESES
A combination of the following major methods of delivery will be used for each course of the MBA
Program:
Online lectures,
Online Class discussion,
Independent work sheet exercise
Demonstration,
Case studies,
Virtual team discussion and Problem Based Learning.
Supported with delivery of recorded video-lecture to the students.
Assessment Scheme:
Online reflection and participation (individual or virtual group)…………...10
Individual and virtual group assignments…………………………………..20
Term paper …………………………………………………………………20
Online Final Exam…………………………………………………………...50
Text Book
Ross S, Westerfield. R., and Jaffe, J., &Kakani, RK. (2014). Corporate Finance. 10th ed. India:
McGraw H
Reference Books
Ross S, Westerfield. R., and Jordan, BD. (2000).Corporate Finance. 5th ed. USA: McGraw Hill.
Ross S, Westerfield. R., and Jaffe, J., &Kakani, RK. Corporate Finance. 10th ed. USA: McGraw
Hill.
Brealey, Myers & Allen.(2008). Corporate Finance. 9th ed. USA: McGraw Hill.
Brealey, Myers & Marcus.(2001). Corporate Finance. 3rd ed. USA: McGraw Hill.
Brealey, Myers & Marcus.(2012). Fundamentals of Corporate Finance. 7th ed. USA: McGraw
Hill.
Brealey, Myers & Marcus.(2001). Corporate Finance. 3rd ed. USA: McGraw Hill.
