BIRLA INSTITUTE OF TECHNOLOGY AND SCIENCE, PILANI, K. K.

BIRLA GOA
CAMPUS
INSTRUCTION DIVISION
2014-2015
Course Handout
Course: Financial Management (FIN 315)
Instructor in Chief:
Faculty

Dr. Debhashish Patnaik

Prof. Rammohan Menon.

1. Scope & Objective Of The Course

Every business encounters certain inherent questions such as
What capital investments should one make? i.e., what kinds of real estate,
machineries, R&D Programmes, I.T. infrastructure, and so on should one
invest in?
How should one raise money to pay for the proposed capital investments?
i.e., what will be the mix of equity and debt in your financial planning?
How will one handle the day-to-day financial activities like collecting
receivables and paying your suppliers?
While these are not the only concerns of Financial Management, they certainly are
the central ones. This course shall discuss the theories, analytical methods and
practical considerations that are helpful in addressing issues in Financial
Management, the understanding of which has become of great significance in
recent times.
2. After completing this course the students shall be able to:

Build understanding of central ideas and theories of modern finance.

Develop familiarity with analytical techniques helpful for financial decision
making
Develop an understanding of the environment in which financial decisions are
taken.
Identify, evaluate and implement investment decisions such as to make
optimum use of the capital employed.

Analysis of cost and key factors to optimize return

On a more basic level you should also be able to answer the following
questions:
What is Capital budgeting? And its relevance.
How critical is working capital management? And what are its essential
components.

How is financial performance analysed?

What is time value of money? How does it influence investment options?

3. Comprehensive Course Plan:

Lectu
re
No.

Learning Objectives

Topics to be covered

1-3

Overview of Accounting

Introduction to Accounting theory and process.

Generally Accepted Accounting Principles (GAAP).

4-9

Financial Statement Taxes

And Cash Flow.

Balance Sheet, Profit And Loss Account, Statement

Of Cash Flow.

Financial Statement
Analysis

Types Of Financial Ratios, Liquidity Ratios,

Leverage Ratios, Turnover Ratios, Profitability
Ratios, Valuation Ratios, Study Of Comparison With
Industry Averages, Time Series Analysis And
Common Size Analysis. Prediction of Bankruptcy

14-16

Working Capital
Management

Working Capital Policy includes, Characteristics Of

Current Assets, Factors Influencing Working Capital
Requirements, level of current assets financing
policy, Operating Cycle Analysis. Sources of
working capital finance

17-18

Cash and Liquidity

Management, Inventory
Management

Cash budgeting, long term cash forecasting, report

for control, cash collection and disbursement,
Investment of surplus, Need For Inventories, Order
quantity EOQ Model, Order Point, Monitoring and
Control of Inventories.

19-21

Time Value of money

Concept
of
Present
value,
annuities, loan amortization

22-24

Capital Budgeting

Techniques of Capital Budgeting which includes

capital budgeting process, project classification,
investment criteria, NPV, IRR.

25-28

Long Term Financing

Raising long term finance through venture capital,

initial public offer, etc. Sources of long term
finance such as equity.

29-31

Capital Structure Decision

EBIT EPS analysis, ROI - ROE analysis, Guidelines

for capital structure planning.

32-35

Short-term decision
making

Cost Analysis, P/V ratio, Break Even Pont, Key

factor

10-13

Compounding,

36-40

Dividend Decision and

Valuation

Dividend Policy, methods of valuation, Valuation of

Bond, Shares

4. Instructional Materials
The reading of some parts of the book is compulsory. As additional bibliography,
the following textbooks have been recommended for further study and reference:
1. Text Book Financial Management Text Problems and Cases, by M.Y.Khan and
P.K.Jain
2. Further Readings
(i)
Financial Management Theory and Practice,
by Dr. Prasanna
Chandra
(ii)
Fundamentals of Financial Management, by Dr. Prasanna Chandra
(iii)
Managerial Finance, by Lawrence Gitman
The following websites are suggested to refer for some valuable input for the study and
analysis.
1. http://www.sebiedifar.nic.in
2. http://www.icai.org
3. http://www finance.yahoo.com
4. http://www moneycontrol.com
5. http://www businessfinancemag.com
6. http://www cpafinder.com/accounting
7. http://www indialedger.com
8. http://www india-financing.com
9. http://www icwai.org/icma.org

5. Conduct of Course
This course will be conducted in a lecture, Presentations, case study and problem
solving approach. The professor discusses the concepts, underlining principles and
the application of those theories and principles to the practical applications of real
life.

6. Evaluation method
Elements in grading of the students performance in the course will be based on the
following criteria:
Activity
Project & Assignments/case study
T-1
T-2
End Exam: (Comprehensive)
Total

Percentage
10%
20%
20%
50%
100%

7. Examinations & Quizzes

Examinations and quizzes will test your understanding of the textbook readings and
problems. Not all the assignment will be collected for grading.

8. Participation
Much of our success in this course is dependent upon an active learning climate in
the classroom. You should be willing to give your opinions, question the concepts
presented, and present your analysis of the problems and cases we will cover in
class. You will also be asked to participate in work groups in class assignments and
in a project. Class participation will also be affected by your involvement in your
groups.

9. Disclaimer
This is only Tentative Course Outline. The professor reserves the right to modify the
schedule, if deemed necessary.
Any changes to the course-outline will be
announced in advance.

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