Masters of Business Administration:FINANCIAL MANAGEMENT

Course Objectives:
To Lay a Conceptual Framework for Financial Management
To develop the ability in the students to apply theoretical concepts to Practical life problems

Course Contents
Unit 1 Introduction to Financial Management
Meaning, Nature and Scope
Objectives of Financial Management
Basic concepts of Break Even Point, Margin of Safety, Profit Volume ratio.
Time Value of Money
Computation of Present and future value of a Single cash flow
Computation of Present and future value of an Ordinary annuity
Computation of Effective rate of Interest, Present value of a Deferred annuity

Unit 2 Capital Budgeting
Evaluation of Projects using DCF and Non DCF methods and simple problems based thereon on the Methods like:
Payback Period method
Discounted Payback
Payback reciprocal
Internal Rate of Return
Net Present Value
Profitability Index
Accounting rate of return




Unit 3 Cost of Capital
Simple problem based on Computation of Cost of Individual source of finance (Equity, Debt and Preference) and Weighted average cost of capital (WACC) using Book value and Market value Weights.
Unit 4 Leverage Analysis
Meaning and Significance of Leverages
Simple problem based on the Computation of Operating, Finance and Combined/Total/Composite Leverage

Unit 5 Ratio Analysis
Meaning of Terms like Liquid/Quick Assets, Net worth, Capital employed, Shareholder’s funds/Equity/Proprietor’s funds etc.
Meaning, Computation and Significance of the Following Ratios
Current ratio
Quick ratio
Gross Profit and Net Profit ratio
Return on Investment
Return on Equity
Return on Capital Employed
Earning per share
Price-Earning Ratio, Dividend Pay out ratio, Retention ratio
Inventory and Debtors Turnover ratio
Capital Employed and working capital Turnover ratio
Debt-Equity ratio, Debt-service coverage ratio

Unit 6 Cash Flow and Fund Flow
Simple problems based on Preparation of Cash flow and Fund flow Statement

Unit 7 Sources of Finance and Introduction to Working Capital
Introduction to Short Term and long term sources of Finance
Meaning and Conceptual framework of working capital
Analyzing Equity, Debt and Preference on the basis of Risk, Cost and Control
Theoretical Questions based on working capital