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Financial Management Syllabus - MBA (PU)

  • Short Name N/A
  • Course code FIN 531
  • Semester Third Trimester
  • Full Marks 100
  • Pass Marks 60
  • Credit Hrs 2
  • Elective/Compulsary Compulsary

Financial Management

Chapter wise complete Notes.

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Course Description

Course Description

The aim of this course is to familiarize students with an overview of the principles, methods and practices of financial decision making in firms.  Major topics that will be covered include:  Nature of financial management: finance in organizational structure of the firm, value maximization goal as a financial decision criterion, financial functions and agency problems. Financial management concepts: financial statements and cash flows, time value of money; Securities valuation: bond and stock valuation. Strategic investment decision making: estimation of cash flows, estimation of cost of capital, evaluation of cash flows. Strategic financing decision making: operating and financing leverage, EBIT-EPS analysis, breakeven and indifference charts. Dividend policy decision making: nature and types of dividend policy, determinants, stock dividends and stock splits.

Course Objective

The objective of this course is to familiarize students with concepts, theories and practices of financial management of the corporation. It also aims at imparting analytical and problem solving skills in students for making investment, financing and dividend decisions.

Learning Objectives

After completion of this course, students will be able to

  • Define the meaning of financial management
  • Apply the concepts of time value of money in financial planning
  • Interpret the financial statements and their uses
  • Carry out financial analysis using ratios and other tools
  • Value the equity and debt securities
  • Compute and use the cost of capital in managerial decision making
  • Apply the techniques of capital budgeting in investment decision making
  • Evaluate the impact of use of debt in valuation of the company
  • Evaluate the dividend scheme and decisions

Unit Contents

Course Outline

SN

Topics and subtopics

Text

LH

1

Nature of Financial Management: Finance in organizational structure of the firm; Value maximization goal as a financial decision criterion; Finance functions; Agency problems, Corporate governance. Ethics in finance.

BE, Ch 1 and 13

2

2

Time Value of Money: Time line; Present value and future value; Annuity and perpetuity; Amortized loan.

BE, Ch4

3

3

Financial Statement Analysis: Nature and need of financial analysis; financial ratio analysis and their types; DuPont equation; comparative ratios and benchmarking; uses and limitations of ratio analysis; common size statement; index analysis; trend analysis; qualitative factors in financial analysis.

BE, Ch3

4

4

Security Valuation and Cost of Capital: Bonds and their valuation; Common stocks and their valuation; Component cost of capital: debt, preferred stock and common stock; Weighted 6average cost of capital.

BE, Ch 5, 7and 9

5

5

Strategic Investment Decision Making: Overview of capital budgeting decision; Project classifications; Estimation of cash flows; Evaluation of projects: payback period, discounted payback period, NPV, PI, IRR and MIRR; Comparison of projects with unequal lives

BE, Ch 10

4

6

Strategic Financing Decision Making: Operating and financing leverage, EBIT-EPS analysis, breakeven and indifference charts.

BE, Ch 15

2

7

Dividend Policy Decision Making: Dividend policy and Factors influencing dividend policy; Dividend payment procedure; Dividend payout schemes; Stock dividends, stock splits, stock repurchase and their impact in stock price and capital structure.

BE, Ch 18

2

Text and Reference Books

Reading Text Book

BE  Brigham, E. F. and Ehrhardt, M. C. (2015). Financial Management: Theory and Practice, 14th eds., New Delhi: Cengage Learning India Pvt. Ltd.

Pedagogy

The pedagogy will be a combination of lectures, case study and project works. One lecture hour consists of one and half hour. Students are expected to attend classes only by going through the course materials prescribed in the session plan as well as additional reading materials provided. At the beginning of each class, students are required to share the business and financial news of that day. The students are also expected to have enough preparation for the discussion in the class during lecture, dealing with numerical problems and case study.

 

Evaluation

Following is the breakup of the internal assessment for this course. As per the rule of Pokhara University, internal assessment has been given 60 percent weight in the final grading. The weight is distributed as follows:

Evaluation Method

Weight

Marks

1. Class Presentation and Participation

10%

6

2. Case Study

15%

9

3. Project Work and Presentation

30%

18

3. Home Assignment

15%

9

4. Mid-Term Examination

30%

18

Total

100%

60
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