Fundamentals of Financial Management MBA

About This Course

FUNDAMENTALS OF FINANCIAL MANAGEMENT
Author:
Dr.Biswo Ranjan Mishra
Edited By:
Dr.Sujit Kumar Acharya Dr.Rashmi Ranjeeta Das
UTKAL UNIVERSITY Directorate of Distance & Continuing Education Bhubaneswar

SYLLABUS
(Core-12)
FUNDAMENTALS OF FINANCIAL MANAGEMENT
Objective: To familiarize the students with the principles and practices of financial management.
Contents:
Unit – I: Introduction& Basic Concepts
Important functions of Financial Management, Objectives of the firm: Profit maximization vs. Value maximization, Role of Chief Financial Officer. Financial environment in which a firm has to operate, Time Value of Money: concept and reasons, Compounding and Discounting techniques, Concepts of Annuity and Perpetuity. Risk-return relationship (Concepts only)
Unit – II: Sources of Finance and Cost of Capital/ Financing Decisions
Different sources of finance; long term and short term sources, Cost of capital: concept, relevance of cost of capital, Implicit and Explicit cost, specific costs (its computation) and weighted average cost (its computation) , rationale of after tax weighted average cost of capital, marginal cost of capital (its computation).
Unit – III: Capital Expenditure Decisions / Long term Financial Decisions & Dividend Decisions
Capital Expenditure Decisions / Long term Financial Decisions
Objectives of Capital Budgeting Process, Concept of Cash flow, Methods of long term Investment decisions - Discounted Payback Period, Net Present Value, Profitability Index, Average Rate of Return / Accounting Rate of Return, Internal Rate of Return (Including relative merits and demerits of each of the methods)
Dividend Decisions
Meaning, Nature and Types of Dividend, concept of pay-out ratio, retention ratio Decisions and growth, Dividend policies and formulating a dividend policy, Dividend Theories: Walter’s Model, Gordon’s Model
Unit – IV: Working Capital Management/ Liquidity Management
Meaning and various concepts of Working Capital, Management of Working Capital and Issues in Working Capital, Estimating Working Capital Needs; Operating or Working Capital Cycle, Policies relating to Current Assets – Conservative, Aggressive and Balance, Various sources of finance to meet working capital requirements
Learning Outcome:

After the completion of this paper, students will be able to understand finance in a better way along with giving them insight to practical management of long and short finance for real business houses.
Text Books Recommended
1. Rostogi, Fundamentals of Financial Management, Taxmann Publications
2. Fundamental of Financial Management, Sharma, Gupta, Kalyani Publishers, New Delhi.
Suggested Readings
1. Fundamentals of Financial Management, Vandana Dangi, V.K. Global Pvt. Ltd., New Delhi
2. Parasuraman – Financial Management: A Step by Step Approach, Cengage Learning 3. Pandey, I.M. Financial Management. Vikas Publications.
4. Financial Management, Himalaya Publishing House
5. BhallaV.K – Financial Management – S.Chand
6. Horne, J.C. Van and Wackowich. Fundamentals of Financial Management. 9tged. New Delhi Prentice Hall of India.