Course Outline: Financial Management - II

Credit: 1.5 , Core Course

Area: Finance
Program: PGDMBFS
Term III Academic Year 2020-21
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Instructor(s) Name Prof Sanjay Dhamija
Room no. 403
Email sdhamija@imi.edu
Phone (Extn no.) 132 / 9811756347
Meeting Hours 2:30 pm – 3:30 pm on Monday (or any other day
with prior appointment)
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1. COURSE DESCRIPTION

Financial Management is a managerial activity that is concerned with the planning and controlling
of the firm’s financial resources. The finance functions mainly comprise of investing, financing
dividends and working capital decisions. In Term-II, the course Financial Management-I, covered
the topics of Introduction to financial management, time value of money concepts, cost of capital,
capital budgeting techniques, concept of leverage and capital structure theories and decisions. This
course would focus on dividend distribution and working capital management. The course is
aligned with the PGDMBFS programme learning goals of developing analytical and problem
solving skills and knowledge in functional areas of management with the objective of preparing
students for cross-functional positions in Industry. Students will gain an insight into pertinent
finance theories and their applications through classroom discussion

2. COURSE OUTCOMES (COs)

After going through the course, the students would be able to:

Course Outcome 1 (CO1): To explain key concepts, terms and theories of corporate finance
relating to dividends and working capital management
Course Outcome 2 (CO2): To solve problems related with dividends, estimating working capital,
cash budgets, inventories and receivable management .
Course Outcome 3 (CO3): To critically evaluate various methods of rewarding shareholders,
their rationale and impact and management of working capital .
3. MAPPING OF THE PROGRAM OUTCOMES (POs) & COURSE OUTCOME (COs)

Program Outcomes (POs) CO1 CO2 CO3

PO1: Student should be able to write well organized and
grammatically correct business reports and letters.
PO2: Student should be able to make effective oral presentations.
PO3: Student should be able to demonstrate critical thinking skills
by understanding the issues with a strong focus on banking and
financial services, evaluating alternatives on the basis of multiple 3 3
perspectives and presenting a solution including conclusions and
implications.
PO4: Student should be to demonstrate problem solving skills by
understanding and defining the problem related primarily to
banking and financial services, analyzing it and solving it by 3 3 3
applying appropriate theories, tools and techniques from various
functional areas of management.
PO5: Student should be able to illustrate the role of responsible
leadership in management.
PO6: Student should be able to identify social concerns and ethical
issues in management.
PO7: Student should be able to identify challenges faced by banks
and financial institutions at the global level.
PO8: Student should be able to take decisions in the global
business environment with special focus on banking and financial
institutions

4. PEDAGOGY

The course will be primarily taught through a combination of class lectures, discussions, solving
numerical problem and case studies. Cases methodology would be used to enable the students to
evaluate alternatives and take decisions in real life business situations The students are expected
to come prepared for the class by reading prescribed text, completing the task assigned and
analyzing the case studies. They should actively share and discuss the latest happenings of the real-
world relevant to the course topics. The students are also encouraged to make use of MS Excel for
problem solving and analysis.
5. COURSE EVALUATION COMPONENTS (CECs)

Component 1: Quizzes (40%)

The quizzes will be compulsory and will be spread across the entire course. If any student misses
any quiz, no makeup quiz will be given later.

Component 2: Assignment/Class participation (10%): Students will be evaluated for their

active contribution in class discussions, relevance of contribution and overall conduct during
classes and submission of assignments.

Component 3: Group Project (10%)

The class will be divided into smaller groups. Each group will be assigned project work involving
the application of finance concepts.

Component 4: End Term (40%)

End term exam will assess subject understanding through application of concepts to analyze real
life business situations.

6. MAPPING BETWEEN COs, POs and CECs

Course Evaluation Components (CECs)

COs POs Quiz Assignment/Class Group End-term
participation Project
CO1 PO4 ✓ ✓ ✓ ✓
CO2 PO3
✓ ✓ ✓
PO4
CO3 PO3
✓ ✓ ✓
PO4

7. RESOURCES

7.1 Textbook

• Financial Management and Policy: James C Van Horne/ Sanjay Dhamija, 12th Edition

7.2 Reference Books

• Financial Management Principles and Applications: S. Titman, A.J. Keown, J.D. Martin,
13th edition, Pearson, 2018.
 • Fundamentals of Financial Management: Eugene F. Brigham and Joel F. Houston, 13th
edition, South-Western, Cengage Learning, 2016
• Principles of Corporate Finance: Megginson, Smart and Gitman, South-Western,
Cengage Learning
• Principles of Corporate Finance: Brealey/ Myers /Allen / Mohanty, Tata McGraw- Hill
• Corporate Finance – Financial Management in a Global Environment: Booth, L.,
Cleary, W.S. and Drake, P. P., Wiley India

7.3 Online References (if any)

• Corporate websites for annual reports

• moneycontrol.com
• in.finance.yahoo.com

8. SESSION PLAN
Session Topic Chapter/
No. Readings
1 Dividend Decision Chapter 13
• Dividend Theories – Relevance and Irrelevance

2 Dividend Decision Chapter 13

• Determinants of dividend policy and factors affecting it Discussion –
Dividend Policy of Maruti
Suzuki Limited, Infosys
Limited, Birla Corp and
Bharati Airtel

3 Dividend Decision Chapter 13

• Types of dividends – Bonus, Split, Buy back of Case study: Dividend Policy
shares, of Infosys Ltd.

4 Dividend Decision Chapter 13

• Types of dividends –Bonus Debentures, Rights Issue Discussion –

o Rights Issue by ING

Vyasa Bank
o Bonus Debentures by
NTPC Ltd/ HUL/
Britannia
Session Topic Chapter/Readings
No.
5 Working Capital Management Decision Ch 18 : Titman, Keown and
• Nature, scope and planning of working capital Martin
• Types of Working Capital Case Study - Dell Working
• Estimating Cash Cycle and Operating Cycle Capital
• Trade Credit as spontaneous source of finance
6 Working Capital Management Decision Chapter 18
• Introduction of inventory management
• Objectives and techniques
7 Working Capital Management Decision Chapter 17
• Introduction to receivable management
• Credit policy
• Credit terms
8 Working Capital Management Decision Chapter 17
• Collection policies
• Taking credit policy decisions
9 Working Capital Management Decision Chapter 16
• Introduction of cash management Cash Management
• Objectives and techniques Need Cash?
• Cash budget Look Inside Your Company
• Investment of surplus cash
10 Working Capital Management Decision Case Study: Butler Lumber
& Co

9. ACADEMIC INTEGRITY & CLASS RULES

a) Plagiarism is the use of or presentation of ideas, works that are not one’s own and which
are not common knowledge, without granting credit to the originator. Plagiarism is
unacceptable in IMI and will invite penalty. Type and extent of penalty will be at the
discretion of the concerned faculty.

b) Cheating means using written, verbal or electronic sources of aid during an examination/
quiz/ assignment or providing such assistance to other students (except in cases where it is
expressly permitted by the faculty). It also includes providing false data or references/list
of sources which either do not exist or have not been used, having another individual write
your paper or assignment or purchasing a paper for one’s own submission. Cheating is
strictly prohibited at IMI and will invite penalty as per policies of the Institute.