Syllabus - Financial Management (CB702)

Introduction to Financial Management - Goals of the firm, Financial Environments.

Time Value of Money: Simple and Compound Interest Rates, Amortization, Computing more than once a year, Annuity Factor.

Valuation of Securities: Bond Valuation Preferred Stock Valuation, Common Stock Valuation, Concept of Yield and YTM.

Risk & Return: Defining Risk and Return, Using Probability Distributions to Measure Risk, Attitudes Toward Risk, Risk and Return in a Portfolio Context, Diversification, The Capital Asset Pricing Model (CAPM).

Operating & Financial Leverage: Operating Leverage, Financial Leverage, Total Leverage, Indifference Analysis in leverage study.

Cost of Capital : Concept , Computation of Specific Cost of Capital for Equity - Preference – Debt, Weighted Average Cost of Capital – Factors affecting Cost of Capital 4L. Capital Budgeting : The Capital Budgeting Concept & Process - An Overview, Generating Investment Project Proposals, Estimating Project, After Tax Incremental Operating Cash Flows, Capital Budgeting Techniques, Project Evaluation and Selection - Alternative Methods.

Working Capital Management: Overview, Working Capital Issues, Financing Current Assets (Short Term and Long Term- Mix), Combining Liability Structures and Current Asset Decisions, Estimation of Working Capital.

Cash Management: Motives for Holding cash, Speeding Up Cash Receipts, Slowing Down Cash Payouts, Electronic Commerce, Outsourcing, Cash Balances to maintain, Factoring. Accounts Receivable Management: Credit & Collection Policies, Analyzing the Credit Applicant, Credit References, Selecting optimum Credit period.