FM 3 yr syllabus

B com (Hons) III Year

Financial Management

UNIT – I

Introduction: Objective of Financial Management, Scope and Function of Financial Management – Profit maximization, wealth maximization, implication of wealth maximum – Financial decision – Basic consideration – concept of Risk Return – Concept of portfolio Management, Liquidity Vs. profitability: (Theory)

UNIT – II

a) Time value of money, valuation concept, future value of a single cash flow, multiple flows and annuity present value of single cash flow, multiple flows and annuity (problems). Capital Budgeting Evaluation Techniques, pay back, ARR, NPV and IRR methods (problems).

    b) Funds flow and cash flow statements

UNIT – III

a) Capital structure and cost of Capital, various theories of capital structure. Cost of capital (Including problems)

b) Concept and significance of cost capital, specific cost of capital for various sources of finance, cost of debt, cost of pref. Share, cost of equity, cost of retained earnings. Weighted average cost of capital, book value Market value weight.

UNIT – IV

Working Capital Management (including problems). An over view of working Capital Management. Determinants of working Capital, Cash management, Cash Forecasting, and budgeting, management of receivables, optimum credit policy, Aspects of Credit policy. Credit terms standards.

UNIT – V

a) Dividend theories (Theory only): A) Waltor model b) Gordan Model c) MM Hypothesis: Factors Influencing divided policy –legal and Procedural aspects of divided policy.

b) Leverage, Financial Leverage, operating leverage EBIT-EPS analysis (including problems)

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