Techniques of Financial Analysis

Paper Code: 
ATG143
Credits: 
4
Contact Hours: 
60.00
Max. Marks: 
100.00
Objective: 

• To introduce researchers to the elements of financial analysis tools.
• To enhance their problem-solving and decision making abilities in financial specialization.

12.00
Unit I: 
Financial Statement Analysis:

Financial Statement Analysis: Introduction; meaning and objectives, types of financial analysis, devices used in analyzing financial statements: comparative statements, comparative balance sheet, comparative income statement.

Trend Analysis: Trend percentages: computation of trend percentages

12.00
Unit II: 
Ratio and Cash Flow Analysis

Ratio analysis: Meaning and rationale, basis of comparison, types of ratios, importance and limitations .

Cash Flow Analysis:

Introduction, concept of cash, actual and notional, use of cash flow, construction of cash flow statement

12.00
Unit III: 
Capital Structure and Leverages

Capital Structure: Concept, factors affecting capital structure, Theories of Capital Structure: Net Income Theory, Net Operating Income Theory, Traditional Theory, Modigliani-Miller Theory, Modern theories of capital structure.

Financial and Operating Leverage – Introduction; Meaning of Financial Leverage;  Measures of Financial Leverage;  Calculation of Earnings Per Share (EPS) and Return on Equity (ROE); Financial and Operating Leverages

12.00
Unit IV: 
Capital budgeting and Cost of Capital

Capital budgeting; concepts, role and relevance, methods of capital budgeting.

Cost of Capital: concept add limitations, sources of capital, calculation of cost of capital of all sources, weighted average cost of capital

12.00
Unit V: 
Standard Costing and Variance Analysis

Standard Costing and Variance Analysis: Meaning of standard cost and standard costing, advantage, limitations and applications, Variance Analysis-Material, Labour, Overhead and Sales Variance

Essential Readings: 
  • Principles of Financial Management: N.P. Agarwal and R. K. Tailor, Pointer Publishers, Jaipur
  • Financial management : I M Panday (Vikas Publishing House)
  • Corporate Financial management: Basant Raj (Tata McGraw Hills)
  • Financial Management: S C Kucchal ( Chaitnaya Publishing House)
  • Chandra, P., “Financial Management- theory and practice”, (Tata Mc Graw Hill).
  • Rustagi, “Fundamentals of Financial Management”,( Galgotia Publishing House,Delhi)
  • Khan M.Y- Indian Financial Management, Tata Mc Graw Hill, India
  • Maheshwari S.N –Financial Management, Sultan Chand and Sons, New Delhi
  • Horne, J.C. Van., “Fundamentals of Financial Management”, 9th ed. (New Delhi Prentice Hall of India 1995).

 

References: 

 

  • Financial Management – Khan and Jain(Tata McGraw Hill)
  • Management Accounting – S. K. Singh( Sun India Publications)
  • Business System -  N.P. Agarwal and R.K. Tailor( RBSA Publishers)
  • Management Accounting – S. N. Maheshawari(S. Chand & Sons.)
Academic Year: 
2018-2019
  • Printer-friendly version
  • PDF version