FinancialManagementII

Classof Credit : 2011 : 3 AcademicYear Semester Sessions : First : II : 33

CourseCode : SLFI502

Objective
Toprovidetoolsforfinancialanalysis,understandingofcapitalbudgetingdecisions,capitalstructure &dividenddecisionsandworkingcapitalmanagement. REFERENCEBOOKS FinancialManagement
th FinancialManagement:Theory &Practice,9 e

AUTHOR/PUBLICATION ICFAI EugeneFBrighametal.TheDrydenPress 1999 MYERS,BREALEY.TataMcgrawHill2007 JamesCVanHorne.PrenticeHall,India StephenA.Rossetal.McGrawHillPublishing 2007 Chandra,Prasanna.TataMcGrawHill2005 IMPandey VikasPublishingHousePvtLtd Besant,Raj.TataMcGrawHill 2002 RaviM.Kishore.Taxmann's 2009
nd

th PrinciplesofCorporateFinance,8 e th FinancialManagementandPolicy,12 e

EssentialsofCorporateFinance,6 e
th FundamentalsofFinancialManagement,4 e th FinancialManagement,9 e

th

CorporateFinancialManagement: rd AnIntroduction,3 e
th FinancialManagement,7 e

CorporateFinance:TheoryandPractice,2 e

Damodaran,Aswath. Wiley 2001)

DetailedSyllabus
Financial Forecasting: Sales Forecast Preparation of ProForma Income Statement andBalance SheetGrowthandExternalFundsRequirement EFR Leverage: MeasuringandanalyzingtheimplicationsofLeverageOperatingLeverage,Financial LeverageandTotalLeverage. Capital Structure Theories: Net Income Approach Net Operating Income Approach Traditional Approach ModiglianiMiller Model (MM), Miller Model Criticisms of MM and MillerModelsFinancialDistress&AgencyCostAsymmetricInformationTheory. Capital Structure Policy: Business & Financial Risk A Total Risk Perspective Business & FinancialRiskAMarketRiskPerspectiveDeterminantsofCapitalStructureDecisionApproach toEstimating the TargetCapital Structure VariationsinCapitalStructures,EBIT/ EPSAnalysis andROI/ROEAnalysis DividendPolicy:TraditionalPositionWalterModelGordonModelMillerModiglianiPosition andRationalExpectationsModel. EstimationofWorkingCapitalNeeds:ObjectivesofWorkingCapital(ConservativevsAggressive Policies), Static vs Dynamic View of Working Capital Factors Affecting the Composition of Working Capital Independence among Components of Working Capital Operating Cycle ApproachtoWorking Capital.

DetailedSyllabus TheClassof2011

SecondSemester

Inventory Management: Nature of Inventory and its Role in Working Capital Purpose of Inventories Types and Costs of Inventory Inventory Management Techniques Pricing of InvestmentsInventoryPlanningandControl. Receivables Management: Purposeof ReceivablesCostofMaintainingReceivablesCredit Policy Variables (Credit Standard, Credit Period, Cash Discount, Collection Program), Credit EvaluationandMonitoring Receivables. Financing Current Assets: Behaviours of Current Assets and Pattern of Financing AccrualsTradeCreditProvisionsShortTermBankFinance PublicDeposits, Commercial PaperFactoring Treasury Management And Control Cash Management: Meaning of Cash Need for and Objectives of Cash Management Cash Forecasting andBudgets Cash ReportsandEfficient Cash Management. Multinational Financial ManagementNeeds of Importer, Needs of Exporter intermsofForeignexchangeBidaskrates,Spot TTbuyingsellingForwardratesCrossrates rollofBanks/Forex dealers Introduction to Cost Concepts: Interface of Financial Accounting with Cost Accounting, Cost Types of costs Historical Costs, Future Costs, Standard Costs, Period Cost, Prime Cost, Direct & Indirect Cost, Opportunity Cost, Imputed Cost, Programmed Cost, Joint Cost, Sunk Cost, Discretionary Cost, Out of Pocket Cost, Differential Cost, Capacity Cost, Conversion Cost, CommittedCostCostUnitCostCenter. Cost Accounting: Cost accumulation cost object cost assignment cost classification cost tracing cost allocation cost application cost driver variable cost and fixed cost costs in financial statements mechanics of cost accumulati on cost behaviour and cost estimation techniquesofcosting. PreparationofCostsheet:PrimeCost,Overheads,Costsheet Cost Volume Profit Analysis: The Relationship of Costs and Profits with Volumes Use of CVP Analysis Marginal Costing Marginal Costing and Absorption Costing Distinguished BreakevenPointContributionMarginApproach. Decisions involving Alternate choices: Nature of managerial decision making characteristics of cost for decision making concept of differential costs decision to make or buy decision to accept a special order decision to drop a product line decision regarding equipment replacementdecisionregardingsellingorfurtherprocessing. CurrentDevelopments CasesandExercises HeroHondasDividendPolicy Intel:ManagingWorkingCapital Dressen(Abridged)(A) AlliedIrishBanks:TheCurrencyDerivativesFiasco TheFallofUnitedWesternBank

(Source:CaseStudiesinManagement VolumeVIII)

DetailedSyllabus TheClassof2011

SecondSemester

SuggestedScheduleofSessions Topic FinancialForecasting (includingcasediscussion) Leverage CapitalStructureTheoriesandPolicy CasesonCapitalStructureTheoriesandCapitalStructurePolicy DividendPolicy CasesonDividendPolicy EstimationofWorkingCapitalNeeds (includingcasediscussion) InventoryManagement ReceivablesManagement CasesonWorkingCapitalManagement,Inventory Managementand ReceivablesManagement FinancingCurrentAssets (includingcasediscussion) TreasuryManagementAndControl (includingcasediscussion) IntroductiontoCostConcepts CostAccounting PreparationofCostsheet CostVolumeProfitAnalysis Decisions involvingAlternatechoices CurrentDevelopment Total No.ofSessions 3 2 3 1 1 1 2 2 2 2 2 1 1 2 2 2 3 1 33

DetailedSyllabus TheClassof2011

SecondSemester