Financial Management Syllabus - BHM (TU)
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Course Description
Course Objective
This course aims to provide students basic understandings of fundamental concepts and principles of financial management. It deals with how effectively financial resources are raised and used in business .This course also equips the students with fundamental tools and techniques of financial management that are useful to undertake financial decisions.
Course Description
This course contains introduction to financial management, time value of money, cost of capital, inventory management, capital structure and leverage, short-term financing, basics of capital budgeting decisions.
Unit Contents
Course Details
Unit 1: Introduction to financial management LH 3
Nature and functions of financial management, the goal of the financial management, the agency problem.
Unit 2: Time value of money LH 10
Concept and significance of time value of money, Cash flow timeline, Future value and compounding, present value and discounting, finding discount rate and number of periods, annuity, solving inters rate in annuities , present value of perpetuity, uneven cash flow streams, semi-annual and other compounding, amortized loans.
Unit 3: Cost of capital LH 5
Concepts and uses of cost of capital, component cost of capital: Cost of debt, cost of preferred stock, cost of retained earnings, cost of common stocks, Weighted Average Cost of capital.
Unit 4: Inventory management LH 4
Purpose and significance of inventory management, Basic inventory costs, The economic order quantity model , re-ordering level, safety stock , minimum stock level, maximum stock level, ABC analysis system and perpetual inventory system.
Unit 5: Capital structure and leverage LH 8
Capital structure and financial structure, Optimal capital structure and WACC, Business risk and financial risk, Degree of operating leverage, financial leverage and total leverage, factors affecting capital structure decisions.
Unit 6: Short -term financing LH 8
Need of short-term fund, sources of short- term financing, accruals and deferred income, trade credit, short-term bank loans, cost of bank loans, commercial paper, inventory financing , account receivable financing.
Unit 7: Basics of Capital Budgeting Decisions LH 10
Concepts and significance of capital budgeting, Process of capital budgeting decisions, Classification of capital projects, Capital Budgeting technique: payback period, discounted payback period, accounting rate of return, net present value, IRR, profitability index, Evaluating techniques.
Text and Reference Books
References
Brigham, E. F. & Houston, J. F. Fundamentals of Financial Management, New Delhi: Cengage Learning, Thomson South Western
Pandey, I. M. Financial Management, New Delhi: Vikash Publishing House
Gitman, L.J. Principles of financial management, New Delhi: Pearson Education, Prentice Hall
Van Horne, J.C. & Wachowicz, J. R. Fundamental of financial management, New Delhi: Pearson Education Prentice Hall
- Short Name N/A
- Course code FIM 311
- Semester Fourth Semester
- Full Marks 100
- Pass Marks 45
- Credit 3 hrs
- Elective/Compulsary Compulsary