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

BIRLA GOA
CAMPUS
INSTRUCTION DIVISION
2019-2020 – First Semestre
Course- Handout

Course: Financial Management (FIN 315)

Instructor in Chief: Dr. Ashwinikumar Mishra

Faculty : 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 it’ s 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?

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 3. Comprehensive Course Plan:

Lecture
Learning Objectives Topics to be covered
No.

Introduction to Accounting theory and process. Generally

1-2 Overview of Accounting
Accepted Accounting Principles (GAAP).

Financial Statement And Balance Sheet, Profit And Loss Account, Statement Of
3-6
Cash Flow. Cash Flow.

Types Of Financial Ratios, Liquidity Ratios, Leverage

Ratios, Turnover Ratios, Profitability Ratios, Valuation
6-9 Financial Statement Analysis Ratios, Study Of Comparison With Industry Averages,
Time Series Analysis And Common Size Analysis.
Prediction of Bankruptcy

Working Capital Policy includes, Characteristics Of

Current Assets, Factors Influencing Working Capital
Working Capital
10-13 Requirements, level of current assets financing policy,
Management
Operating Cycle Analysis. Sources of working capital
finance

Cash budgeting, long term cash forecasting, report for

Cash and Liquidity
control, cash collection and disbursement, Investment of
14-18 Management, Inventory
surplus, Need For Inventories, Order quantity – EOQ
Management
Model, Order Point, Cash and Receivable management

Concept of Present value, Compounding, annuities, loan

19-20 Time Value of money
amortization

Techniques of Capital Budgeting which includes capital

budgeting process, project classification, investment
21-26 Capital Budgeting
criteria, NPV, IRR. Capital Budgeting under inflation and
project selection at capital rationing

Raising long term finance through venture capital, initial

27-28 Long Term Financing public offer, etc. Sources of long term finance such as
equity.

EBIT – EPS analysis, ROI - ROE analysis, Guidelines for

29-31 Capital Structure Decision
capital structure planning.

Cost Analysis, CVP analysis , Key factor and decision

32-37 Short-term decision making making

Dividend Decision and Dividend Policy, methods of valuation, Valuation of

38-40 Bond, Shares
Valuation

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 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 icmai.in

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 Percentage
Project & Assignments/case study 20% ( Open Book)
Quiz 2 Nos ( One will be surprise quiz) 10%
Mid Term 30%
End Exam: (Comprehensive) 40%
Total 100%

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 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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