Financial Management and Economics for Finance

Introduction to Financial Management Function
Objective and scope, Role and purpose, Financial management environment, Functions of finance executives in an organization, Financial distress and insolvency.
Financial Analysis through Ratios
(a) Users and Sources of Financial Analysis
(b) Calculation and Interpretation of ratios
Analyzing liquidity
- Analyzing leverage
- Analyzing solvency
- Analyzing efficiency/ activity
- Analyzing profitability
(c) Limitations of ratio analysis
Financing Decisions
Sources of Finance
(a) Different Sources of Long term debt and Equity Finance their and Characteristics of , Method of raising Long Term Finance
(b) Different Sources of short term Finance
(c ) Internal Fund as a source of finance
(c) International sources of finance
(d) Other sources of finance- Sale and Lease back, Convertible debt, venture capital, grants etc.

Lease Financing
(a) Concept, Classification, Significance and Limitations of Lease Financing
(b) Financial Evaluation of Leasing Decision
Cost of Capital
(a) Significance, Factors of cost of capital
(c) Measurement of costs of individual components of capital
(d) Weighted average cost of capital (WACC)
(e) Marginal cost of capital
(f) Effective Interest rate
Capital Structure Decisions
(a) Significance, Determinants of capital structure
(b) Capital structure planning and designing
(c) Designing of optimum capital structure
(d) Theories of Capital Structure and value of the firm.
(f) EBIT- EPS Analysis, Breakeven- EBIT Analysis.
(g) Under/ Over Capitalization.
Leverages
(a) Types of Leverages- Operating, Financial and Combined
(b) Analysis of leverages

Capital Investment and Dividend Decisions
(a) Objective of capital investment decisions
(b) Methods of Investment appraisal
• Payback period, Discounted payback period
• Accounting Rate of Return (ARR),
• Net Present Value (NPV) - The meaning of NPV, Strengths and limitations of NPV method, The impact of taxation on the NPV analysis, The impact of Inflation on the NPV analysis, The working capital adjustment in an NPV analysis, Capital rationing, Equivalent Annual Costs, Adjusted present value
• Internal Rate of return (IRR)- Limitations of the IRR method, Multiple IRRs,
• Modified internal Rate of Return (MIRR)- Definition and explanation of MIRR, The process for calculating MIRR, Strengths of the MIRR approach.
• Profitability Index
Adjustment of Risk and Uncertainty in Capital Budgeting Decision
(a) Probability Analysis
(b) Certainty Equivalent Method
(c) Risk Adjusted Discount Rate
(d) Monte Carlo Simulation
(e) Decision Tree Analysis
(f) Scenario Analysis
(g) Sensitivity Analysis
Dividend Decisions
(a) Basics, Forms of dividend and Determinants of dividend
(b) Relevancy and Irrelevancy of Dividend Policies- Traditional Approach, Walter’s model, Gordon’s model, Modigliani and Miller (MM) Hypothesis

Management of Working Capital
(a) The management of working capital
(b) The Working capital financing decisions
(c) The working Capital Cycle (operating Cycle),
(d) Assessment of working capital requirement
(e) Management of Accounts Receivables (Debtors)
(f) Factoring and Forfaiting
(g) Management of Accounts Payables (Creditors)
(h) Management of Inventory
(i) Management of Cash, Treasury management
(j) Banking norms of working capital finance
Determination of National Income
(i) Macro Economic Aggregates and Measurement of National Income
(ii) The Keynesian Theory of Determination of National Income

Public Finance
(i) Fiscal functions: An Overview.
(ii) Market Failure
(i) Government Interventions to Correct Market Failure
(ii) Fiscal Policy
The Money Market
(i) The Concept of Money Demand:
(ii) Important Theories of Demand for Money
(i) The Concept of Money Supply
(ii) Monetary Policy
International Trade- I
(i) Theories of International Trade
(ii) Trade Policy – The Instruments of Trade Policy
(iii) Trade Negotiations
(iv) Exchange Rates and its economic effects
(v) International Capital Movements: Foreign Direct Investment