BANASTHALI VIDYAPITH

FMS-WISDOM

Handout for the semester: January - May 2022

Class: BBA IV Sem & BA IV Sem Course Title: Basics of Financial Management
Course Teacher: Mr. Nitin Bansal (MGMT202)
Class Timings: To be informed later on Estimated Contact Hrs: 60
Google Classroom Code: rbh3dky
Credits: 4, Max. Marks : 100 (CA: 40 + ESA: 60) Teacher’s Email: nitinbansal@banasthali.in

About the Course:

The course on Basics of Financial Management aims at developing an understanding of how the corporates manage their
funding and also focuses on developing the analytical skill of the students with respect to the financial statements of an
organization.

Course Objectives:

 To introduce the students to the basics of  To understand the practicality of the

financial management. capital structure planning, cost of
capital, dividend policies and working
 To understand the role of financial manager capital.
to give them an input into various concepts.
 To develop an understanding about
techniques of financial analysis.

Course Contents:
Unit I
Overview of financial management, Principles, nature and scope of financial management, Profit maximization
v/s wealth maximization, Stakeholder wealth maximization.

Unit II
Fundamental Valuation: Time value of money, Rationale, Future value of a single amount, Future value of an
annuity, Present value of a single amount, Present value of an annuity, Concept of risk & return, Types of risk,
Diversification, Concept and advantage.

Unit III
Financial Analysis- Techniques of financial analysis, Ratio analysis: advantages, Liquidity ratios, Turnover
ratios, Profitability ratios, Leverage ratios.

Unit IV
Working Capital Management: Nature and concept, Factors influencing working capital, Computation of
working capital, Leverage: Concept, DOL, DFL, DTL.
Unit V
Capital Budgeting: Meaning and importance, Cash flows v/s accounting profit, evaluation techniques – Pay
Back Period, NPV, IRR, Cost of capital: basic concepts, measurement of specific costs- Cost of Equity and
Debt.

Learning Outcomes:

Upon completion of the course, the student will be able to:

 Aware about capital structure and theories of capital structure.

 Understand the cost of capital in wide aspects.
 Understand working capital management.

Suggested Readings (SR):

1. Avadhani. (2010). Financial Management (8 ed), New Delhi, Himalyan Publication.

2. Chandra. (2015). Financial Management (11 ed), New Delhi, Tata McGraw Hill.
3. Jain, K. &. (2007). Financial Management (7 ed), New Delhi, Tata McGraw Hill.
4. Kishore. (2016). Financial Management (8 ed), New Delhi, Taxman.
5. Chandra, P. (2017). Investment Analysis and Portfolio Management (5 ed.). New Delhi: McGraw Hill

Suggested E-Learning Resources (ER):

1. Helfert, A. (2001). Financial Analysis and Tools and Techniques. Retrieved from
http://alqashi.com/book/book17.pdf
2. Saha, D. (2019). Working Capital Management.ppt. Retrieved from
https://www.scribd.com/doc/98098428/WORKING-CAPITALMANAGEMENT-ppt.

Innovative approach:

Presentations, online quiz, online videos and interactive materials on portals like YouTube, invetsopaedia, ICSI Portal,
etc. Use of Google Classroom, easy online submissions and interactions.

Course Plan:

No. of sessions = 45, No. of contact hours = 60

Unit 1

Learning Objectives:

i. To enable students to understand the concept of financial management.

ii. Enlighten them about the various techniques available for analysing the company’s financial position.

iii.
Online class Principles, nature and scope of financial management
1-2 & Interaction SR 2,4
 Online class Basic overview of the various techniques of financial
3 & Interaction analysis. SR 2,4

Online class
4 & Interaction Profit maximization v/s wealth maximization SR 2,4

Online class
5-6 & Interaction Stakeholders wealth maximization SR 2,4

Unit 2

Learning Objectives:

i. To enable students to understand the concept of time value of money.

ii. To enable students to understand the concept of risk and return.

iii.
Online class Concept of time value of money SR 5
7-8 & Interaction https://psu.instructure.com/courses/1806581/
pages/introduction-what-is-time-value-of-money

Online class Future value of a single amount

9 & Interaction SR 5
(Post-read:
Questions for
practice)

Online class Present value of a single amount

10 & Interaction SR 5
(Post-read:
Questions for
practice)

Online class Future value of annuity

11 & Interaction SR 5
(Post-read:
Questions for
practice)

Online class Present value of annuity

12 & Interaction SR 5
(Post-read:
Questions for
practice)

Online class Concept of risk and return

13-14 & Interaction SR 5

Online class Types of risk

15 & Interaction SR 5
 Online class Concept of diversification and advantages
16-17 & Interaction SR 5

Unit 3

Learning Objectives:

i. To understand the techniques of financial planning.

ii. To inculcate a sense of understanding of the factors essential for financial decision.

Online class
18-19 & Interaction Techniques of financial analysis. SR 3

(Post-read: https://youtu.be/TZZFBkbC2IA
Questions for
practice)

Online class
20-25 & Interaction Ratio analysis and practice. SR 3

(Post-read: https://youtu.be/TZZFBkbC2IA
Questions for
practice) Online Rapid-fire quiz for quick flashback and
(Google form understanding of the unit.
quiz)

Online class
26-28 & Interaction Financing decision – Operating leverage, financial SR 2,4
leverage and combines leverage

LIVE questions practice at the end.

Unit 4

Learning Objectives:

i. To understand the concept of working capital and how it is computed.

ii. To develop an understanding about how an optimal financial mix can be determined.

Online class
29-31 & Interaction Working Capital Management: Nature, Concept, Need and SR 2,4
determinants of working capital.
 Online class Determination of financial mix.
32 & Interaction SR 2

(Post-read:
Questions for
practice)

Online class
33-34 & Interaction Computation of working capital. SR 1, 2, 4

(Post-read: https://youtu.be/4sNJera9D
Questions for
practice)

Online class
35-37 & Interaction Financing decision – Operating leverage, financial SR 2,4
leverage and combines leverage

LIVE questions practice at the end.

Unit 5

Learning Objectives:

i. To understand the concept of Investment decision through capital budgeting method.

ii. To develop an understanding of project selection techniques using analytical skills.

Online class
38-39 & Interaction Capital budgeting techniques: Traditional and discounted SR 2,4
cash flow method
(Post-read:
Questions for https://youtu.be/Klgx-XFsTAw
practice)

Online class Project selection under capital rationing

40 & Interaction SR 2
Case Study based questions.
(Post-read:
Questions for
practice)

Online class
41-42 & Interaction Measurement of cost of capital – Dividend Approach and SR 1, 2, 4
CAPM.
(Post-read:
Questions for
practice)

Online class
43-45 & Interaction Measurement of cost of capital –CAPM. SR 2

(Post-read:
 Questions for
practice)

Evaluation:

Continuous Assessment

Component Weight Date of Submission* Date of Announcement of Topic* Remarks

(%)

Internal 1 10 Submission by 31 January, Topics shall be allotted in the class

2022 by 13 January, 2022

Periodicals 1 10 9-14 February, 2022* Unit 1 & some topics of unit 2 -

Internal 2 10 Submission by 10 March, Topics shall be allotted in the class -

2022 by 22 February, 2022

Periodical 2 10 22-27 March, 2022* Remaining topics of unit 2 and Unit -

3

End Term Assessment

Component Weight Tentative Date Syllabus Remarks

(%)

Semester Exam 60 01-14 May, 2022* Complete Syllabus. -

*Tentative Dates

Mr. Nitin Bansal

(Signature of the Teacher/s)

(Signature of the HOD) (Signature of the Dean)