Financial Management

Lovely Professional University, PunjabCourse Code Course Title Course Planner Lectures Tutorials Practicals CreditsFIN501 FINANCIAL MANAGEMENT 14120::Sumit Goyal 3.0 1.0 0.0 4.0Course Category Courses with numerical and conceptual focus

TextBooks Sr No Title Author Edition Year Publisher NameT-1 FINANCIAL MANAGEMENT SRIVASTAVA R, MISRA

A2nd 2012 OXFORD UNIVERSITY PRESS

Reference BooksSr No Title Author Edition Year Publisher NameR-1 FINANCIAL MANAGEMENT PANDEY I M 10th 2011 VIKAS PUBLISHING HOUSE

Other Reading

Sr No Journals articles as Compulsary reading (specific articles, complete reference)OR-1 Mian Sajid, Working Capital Requirements & determining Factors in Pakistan, ICFAI Journal of Applied finance, Vol 15, No 4, April 2009 , OR-2 Amitabh Gupta, Capital Expenditure & the market value of the firm, ICFAI Journal of Applied Finance, Vol 15, No 12, Dec 2009 ,

OR-3 The Finance Function in Global Corporation, Mihir A Desai, Harvard Business Review, July- Aug 2008 ,

OR-4 A new approach to funding social enterprises by Antony Bugg-Levine, Harvard Business Review, January-February 2012 ,

OR-5 Do you know your cost of capital? By Michael T. Jacobs & Anil Shivdasani, Harvard Business Review, July- August 2012 ,

OR-6 Identifying firm capital structure by Bo Becker, Harvard Business Review, Nov 2011 ,

OR-7 Poddar N., Mittal M., A research paper capital structure determinants of steel companies in India: A panel data analysis, Galaxy International Interdisciplinary Research Journal, Vol.2 (1), JANUARY (2014) ,

OR-8 Daniel T., Capital Budgeting Practices In Developing Countries: A Case Of Rwanda, Research Journal of Finance,Vol. 2(3)March, 2014 ,

Relevant WebsitesSr No (Web address) (only if relevant to the course) Salient FeaturesRW-1 http://pages.stern.nyu.edu/~adamodar/New_Home_Page/PVPrimer/pvprimer.htm A Primer on the Time Value of Money - For Basics of Time Value of

MoneyRW-2 http://www.youtube.com/watch?v=zJCiEIqAxbs Video on Working Capital Management Principal and Approaches

RW-3 http://www.youtube.com/watch?v=GJMad7KTpaw Video on NPV

RW-4 http://www.learnerstv.com/video/Free-video-Lecture-7148-Management.htm Video on role of Finance and the Financial Manager

RW-5 http://www.learnerstv.com/video/Free-video-Lecture-7152-Management.htm Videos on Time value of money

RW-6 http://www.learnerstv.com/video/Free-video-Lecture-7153-Management.htm Videos on Capital Expenditure Analysis

RW-7 http://www.learnerstv.com/video/Free-video-Lecture-7154-Management.htm Capital Expenditure Risk Analysis

RW-8 http://www.learnerstv.com/video/Free-video-Lecture-7156-Management.htm Risk and Return Video Lecture

RW-9 http://www.learnerstv.com/video/Free-video-Lecture-7160-Management.htm Financing Decisions Video

RW-10 http://www.learnerstv.com/video/Free-video-Lecture-7161-Management.htm Corporate Financing Overview Video Lecture

RW-11 http://www.learnerstv.com/video/Free-video-Lecture-7164-Management.htm Dividend Policy Video Lecture

RW-12 http://www.learnerstv.com/video/Free-video-Lecture-7165-Management.htm Capital Structure Video Lecture

RW-13 http://www.learnerstv.com/video/Free-video-Lecture-7166-Management.htm Lease Financing Video Lecture

RW-14 http://www.learnerstv.com/video/Free-video-Lecture-7157-Management.htm Discount Rate Determination Video Lecture

RW-15 http://www.learnerstv.com/video/Free-video-Lecture-7158-Management.htm Project Discount Rate Video Lecture

Week Number

Lecture Number

Broad Topic(Sub Topic) Chapters/Sections of Text/reference books

Other Readings,Relevant Websites, Audio Visual Aids, software and Virtual Labs

Lecture Description Learning Outcomes Pedagogical ToolDemonstration/ Case Study / Images / animation / ppt etc. Planned

Live Examples

Week 1 Lecture 1 Financial Management- Introduction(Financial goal- Profit Maximization vs. Wealth Maximization)

T-1:1R-1:1

RW-4 L1: Introductory lecture L2: Introduction of financial Management, objectives and scope.

L1: To assess the importance of the course. L2: To develop the relationship between financial objectives and organizational strategy.

Discussion using the Power PointPresentation.

Financial Management- Introduction(Objective and scope)

T-1:1R-1:1

RW-4 L1: Introductory lecture L2: Introduction of financial Management, objectives and scope

L1: To assess the importance of the course.L2: To develop the relationship between financial objectives and organizational strategy.

Discussion using the Power point presentation.

Detailed Plan For Lectures

LTP week distribution: (LTP Weeks)Weeks before MTE 8

Weeks After MTE 7

Spill Over 7

Week 1 Lecture 2 Financial Management- Introduction(Objective and scope)

T-1:1R-1:1

RW-4 L1: Introductory lecture L2: Introduction of financial Management, objectives and scope

L1: To assess the importance of the course.L2: To develop the relationship between financial objectives and organizational strategy.

Discussion using the Power point presentation.

Financial Management- Introduction(Financial goal- Profit Maximization vs. Wealth Maximization)

T-1:1R-1:1

RW-4 L1: Introductory lecture L2: Introduction of financial Management, objectives and scope.

L1: To assess the importance of the course. L2: To develop the relationship between financial objectives and organizational strategy.

Discussion using the Power PointPresentation.

Lecture 3 Finance function(Investment Decision)

T-1:1R-1:1

Investment, finance and dividend decisions and the interrelation of the decisions.

Assess the importance of the functions of the finance manager.

Discussion using the Power point presentation

Finance function(Financing Decision)

T-1:1R-1:1

OR-3RW-13




Finance function(Dividend decision)

T-1:1R-1:1

OR-3RW-13




Finance function(Interrelation of Finance Functions)

T-1:1R-1:1

OR-3RW-13



Discussion using the Power Point Presentation

Week 2 Lecture 4 Source of Finance(Short term Sources of Finance)

R-1:20/23/27 RW-13 Short term sources of finance.

Evaluate the financial products and services available for working capital finance.

Discussion using the article and power point presentation.

Annual reports of the companies

Lecture 5 Source of Finance(Long term Source of Finance)

T-1:20 OR-4 Sources of finance for long term(Allocation of Homework 1)

Evaluate the financial products and services available for long term finance.

Discussion using the article and power point presentation.


Source of Finance(Leasing as a Source of Finance)

T-1:20 OR-4 Sources of finance for long term (Allocation of Homework 1)


Discussion using the article and power point presentation


Week 2 Lecture 5 Source of Finance(Venture capital)

T-1:20 OR-4 Sources of finance for long term (Allocation of Homework 1)


Discussion using the article and Power point Presentation


Lecture 6 Concept of Time Value of Money(Present & future value of annuities & Single Amount)

T-1:4R-1:2

RW-5 L: 6, 7 Introduction to the concept , Future Value of the money for Lump sum and Annuity.L:8 Present value of themoney for Lump sum and Annuity.

Assess the role of time value of money for investment and finance purpose.

Discussion through numerical problems and power point presentation

Numerical examples of future value and present value

Week 3 Lecture 7 Concept of Time Value of Money(Present & future value of annuities & Single Amount)

T-1:4R-1:2





Lecture 8 Concept of Time Value of Money(Present & future value of annuities & Single Amount)

T-1:4R-1:2





Lecture 9 Concept of Time Value of Money(Perpetuity)

T-1:4R-1:2

Perpetuity and calculation of EMI's

Calculate the EMI's for loan.

Discussion through numerical problems and Power point presentation

Examples of RD, SIP and EMI's

Week 4 Lecture 10 Cost of Capital(Concept and its Significance)

T-1:13R-1:9

OR-5 Concept and significance of cost of capital.

Analyze the relevance of cost of capital in finance decision.

Discussion using the power point presentation.

Lecture 11 Cost of Capital(Measurement of cost of capital of various source of funds i.e. Equity Shares, Preference Shares, Debentures, Retained Earnings)

T-1:13R-1:9

Calculation of cost of capital of varioussource of funds with and without taxL11: Equity Shares, Retained earningL12: Preference Shares,Debenture

Calculation of the cost of different sources for finance


Annual reports of the companies.

Week 4 Lecture 12 Cost of Capital(Measurement of cost of capital of various source of funds i.e. Equity Shares, Preference Shares, Debentures, Retained Earnings)

T-1:13R-1:9

Calculation of cost of capital of varioussource of funds with and without taxL11: Equity Shares, Retained earningL12: Preference Shares,Debenture

Calculation of the cost of different sources for finance



Week 5 Lecture 13 Cost of Capital(Weighted Average Cost of Capital)

T-1:13R-1:9

Overall cost of capital Calculation of the cost for the capital structure of the company.



Lecture 14 Leverage(Operating Leverage)

T-1:17R-1:14

Meaning, calculation and implication of the operating leverage

Evaluate the impact of fixed cost on the earnings and capital structure of the firm.



Lecture 15 Leverage(Financial Leverage)

T-1:17R-1:14

Meaning, calculation and implication of thefinancial and combined leverage

Evaluate the impact of fixed interest payment on the earnings, capital structure and shareholders wealth of the firm.



Week 6 Lecture 16 Leverage(Combined Leverage)

T-1:17R-1:14

Meaning, calculation and implication of combined leverage and EBIT- EPS analysis.

Evaluate the impact of fixed expenditures on the earnings, capital structure and shareholders wealth of the firm.

Discussion through numerical problems and Power point presentation.


Lecture 17 Homework,Quiz,Test2Lecture 18 Capital Structure Decision

(Introduction,Factors Effecting capital structure decision)

T-1:16R-1:15

OR-6 Meaning, Introduction and Factors Effecting capital structure decision

Evaluate the factors while designing capital structure of the firm.

Discussion through Power PointPresentation

One company will be assigned to each students and he/she has to analyse the capital structure of that company.

Week 7 Lecture 19 Capital Structure Decision(Theories of Capital Structure)

T-1:16R-1:15

L19 to L21: Theories of capital structure.1. Net Operating approach2. Net operating income approach3. Traditional Approach4. Modigliani and Miller approach

L19 to L21: Evaluate the theories of capital structure to achieve the optimal capital structure.

Discussion through Numerical problems and Power PointPresentation

Week 7 Lecture 20 Capital Structure Decision(Theories of Capital Structure)

T-1:16R-1:15




Lecture 21 Capital Structure Decision(Theories of Capital Structure)

T-1:16R-1:15




Week 8 Lecture 22 Capital Structure Decision(Optimum Capital Structure, Understanding debt and equity mix)

T-1:16R-1:15

RW-12 Use of debt along with equity and other sources of finance

Design the optimum capitalstructure for the firm which will maximize the value of the firm.

Discussion through article the Power Point Presentation

SPILL OVERWeek 8 Lecture 23 Spill Over

Lecture 24 Spill Over

MID-TERMWeek 9 Lecture 25 Capital budgeting(Meaning

and Process)T-1:11R-1:8

OR-2 Introduction and process of capital budgeting

Assess the role of capital budgeting in the investment decision

Discussion through article and power point presentation.

Lecture 26 Capital budgeting(Traditional Methods of analyze capital budgeting decisions)

T-1:11R-1:8

RW-6 Payback period, rate of return or accounting rate of return.

Evaluate the investment proposals as per tradition approach.

Discussion through numerical problems andpower point presentation

Lecture 27 Capital budgeting(Traditional Methods of analyze capital budgeting decisions)

T-1:11R-1:8

RW-6 Payback period, rate of return or accounting rate of return.

Evaluate the investment proposals as per tradition approach.


Week 10 Lecture 28 Capital budgeting(Discounting methods of analyze capital budgeting decisions)

T-1:11R-1:8

RW-3 L28-29: Net present value, Internal rate of return, Profitability index, Discounted pay back period

L28-29:Evaluate the investment proposals as per discounting techniques.

Discussion through numerical problems and power point presentation.

Week 10 Lecture 29 Capital budgeting(Discounting methods of analyze capital budgeting decisions)

T-1:11R-1:8

RW-3 L28-29: Net present value, Internal rate of return, Profitability index, Discounted pay back period

L28-29:Evaluate the investment proposals as per discounting techniques.


Lecture 30 Capital budgeting(Simulation Analysis)

T-1:11R-1:8

Risk management techniques of capitalBudgeting i.e Simulation and Scenario analysis.

Explore the importance of risk in capital budgeting decisions.


Capital budgeting(Scenario Analysis)

T-1:11R-1:8

Risk management techniques of capitalBudgeting i.e Simulation and Scenario analysis.

Explore the importance of risk in capital budgeting decisions.

Discussion through Numerical problems andPower Point Presentation

Week 11 Lecture 31 Capital budgeting(Sensitivity Analysis)

T-1:12R-1:8

RW-7 Risk management techniques of capital Budgeting i.e sensitivityanalysis

Evaluate the investment proposals as per sensitivity analysis.

Discussion through article the power point presentation.

Lecture 32 Management of surplus- Dividend policy(Retained earnings and dividend policy)

T-1:18R-1:17/18

RW-11 Introduction, forms of dividend and role of dividend decision in the financial management

Assess the relevance of dividend decision in the value of the firm.


Management of surplus- Dividend policy(Forms of dividend)

T-1:18R-1:17/18

RW-11 Introduction, forms of dividend and role of dividend decision in the financial management

Assess the relevance of dividend decision in the value of the firm.

Discussion using the power point presentation.

Lecture 33 Homework,Quiz,Test3Week 12 Lecture 34 Management of surplus-

Dividend policy(Theories of dividend)

T-1:18R-1:17/18

RW-11 L34 to L36: Relevance and Irrelevance theories of dividend

L34 to L36: Investigate that whether dividend distribution impact the value of the firm.


Lecture 35 Management of surplus- Dividend policy(Theories of dividend)

T-1:18R-1:17/18




Lecture 36 Management of surplus- Dividend policy(Theories of dividend)

T-1:18R-1:17/18




Week 13 Lecture 37 Working Capital Management(Concept and Significance)

T-1:29R-1:27

OR-1 L37 to 38: Introduction, significance, Factors affecting working capital, calculation of operating cycle. (Financing of working capital is already discussed under the short term sources of finance).

L37 to 38: Assess the role of current assets and current liabilities in short term capital decision.

Discussion through power point presentation.

Working Capital Management(Financing of working capital needs)

T-1:21R-1:27

OR-1 L37- 38:Introduction, significance, Factors affecting workingcapital, calculation of operating cycle. Financing of working capital is already discussed under the short term sources of finance. .

L37- 38:Assess the role of current assets and current liabilities in short term capital decision.

Discussion through Power Point Presentation

Lecture 38 Working Capital Management(Financing of working capital needs)

T-1:21R-1:27

OR-1 L37- 38:Introduction, significance, Factors affecting workingcapital, calculation of operating cycle. Financing of working capital is already discussed under the short term sources of finance. .

L37- 38:Assess the role of current assets and current liabilities in short term capital decision.

Discussion through Power Point Presentation

Working Capital Management(Concept and Significance)

T-1:29R-1:27

OR-1 L37 to 38: Introduction, significance, Factors affecting working capital, calculation of operating cycle. (Financing of working capital is already discussed under the short term sources of finance).

L37 to 38: Assess the role of current assets and current liabilities in short term capital decision.

Discussion through power point presentation.

Lecture 39 Working Capital Management(Approaches for working capital management)

T-1:21R-1:27

RW-2 Approaches or policies for working capital management.

Design the finance mix for working capital.

Discussion throughNumericalproblems andPower PointPresentation

Week 14 Lecture 40 Working Capital Management(Estimation of working capital requirement)

T-1:21R-1:27

L40-41: Estimation and calculation of working capital

L40-41: Calculation of working capital requirement for the future.

Discussion through Numerical problems and Power Point Presentation

Week 14 Lecture 41 Working Capital Management(Estimation of working capital requirement)

T-1:21R-1:27

L40-41: Estimation and calculation of working capital

L40-41: Calculation of working capital requirement for the future.

Discussion through Numerical problems and Power Point Presentation

Lecture 42 Working Capital Management(Management of cash, receivable and inventory)

T-1:22/23/24R-1:29/30

L42-43:Introduction to components of working capital management i.e. cash, inventory and receivable

L42-43:Assess the role of cash, receivable and inventory in the working capital management.

Discussion using the Power Point Presentation.

Week 15 Lecture 43 Working Capital Management(Management of cash, receivable and inventory)

T-1:22/23/24R-1:29/30

L42-43:Introduction to components of working capital management i.e. cash, inventory and receivable

L42-43:Assess the role of cash, receivable and inventory in the working capital management.

Discussion using the Power Point Presentation.

SPILL OVERWeek 15 Lecture 44 Spill Over


Week 16 Lecture 46 Spill Over



Scheme for CA:Component Frequency Out Of Each Marks Total Marks

Homework,Test 2 3 15 30

Class participation 1 1 5 5

Total :- 20 35

Details of Academic Task(s)

AT No. Objective Topic of the Academic Task Nature of Academic Task(group/individuals/field

work

Evaluation Mode Allottment / submission Week

HW1 To check the practical learning regrading the concepts of financial management

A specific company from BSE 500 has to be allotted to the group.Students will analyze the whole financial structure of the company as per the movement of course by using the last five years data. They have to incorporate the following points. (1) A brief profile of the company with the thought of management (vision and mission).(2) Analysis of the sources of Finance of the company and their relevant mix for the last five year.(3) They have to make a comparative study of their cost of capital in comparison with any one peer company in last five year and the suggestion where the cost control is required and how it can be achieved.(4) To diagnose the whole capital structure and relevance of the structure model as fitted.(5) Students are required to have an understanding and recommendations as far the capital budgeting decisions of the companies are concerned.

Group 1)Content of the report-10 Data Application and Analysis-10 Recommendations- 10 2) Viva Concept clarity-15 (8 marks for Viva 1 and 7 marks for viva 2) Student'shold on report/in depth awareness of the

2 / 12

Test1 To check the understanding of the students in regard to numerical ability.

The syllabus of the test will be time value of money, cost of capital and leverage.

Individual All questions of 5 marks each or in multiples of 5. Marks should be allotted as per the answer and their should be step marking.

5 / 6

Test2 To check the understanding of the students in regrads to numerical ability

The syllabus of the test will be capital budgeting and capital structure.

Individual All questions of 5 marks each or in multiples of 5. Marks should be allotted as per the answer and their should be step marking.

11 / 12

Class participation1

To enhance the spoken and knowledge Skills of students

Students will give 5 minute presentation on any current issue related to subject/economy.

Individual As per rubrics 1 / 13

Plan for Tutorial: (Please do not use these time slots for syllabus coverage)Tutorial No. Lecture Topic Type of pedagogical tool(s) planned

(case analysis,problem solving test,role play,business game etc)

Tutorial1 Discussion on the Current issues related to Financial Management to build the base for the students.

Role Playing

Tutorial2 Role of Finance Manager, Sources of Finance Problem SolvingTutorial3 Time Value of Money Problem SolvingTutorial4 Cost of Capital Problem SolvingTutorial5 Leverage Problem SolvingTutorial6 Viva for the 1st Assignment in context to the sources of finance and

cost of capital Role Playing

Tutorial7 Capital Structure Problem SolvingTutorial8 Revision Problem Solving

After Mid-TermTutorial9 Capital budgeting Problem SolvingTutorial10 Capital budgeting and risk management techniques Problem SolvingTutorial11 Viva for the 1st Assignment in context to the capital structure and

capital budgeting Role Playing

Tutorial12 Dividend policy Problem SolvingTutorial13 Working capital Policies and discussion on the some of company's

working capital from two or three sectors. Problem Solving

Tutorial14 Estimation of Working Capital Problem SolvingTutorial15 Revision Problem Solving

Documents

Financial Management