Financial Management

Course Code: BBA 223

Credit Hour: 3

Course Group: Core Courses

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Introduction: Concept of finance and financial management, The finance functions, The objectives of financial management, Maximizing shareholders’ Wealth values and other goals, Changing role of financial management.

Financial statement analysis: Financial statements, Ratio analysis, Uses and implications. Financial forecasting, Cash budget.

Operating and financial leverage: Leverage in business, Operating leverage, financial leverage Working capital management, Nature, sources, forecasting the working capital need, Financing and control of working capital. Management of cash, marketable securities and accounts receivable.

Source of Financing and Instruments used therein: Short term financing, Trade credit, Bank credit, Financing through commercial papers, Account receivable financing, inventory financing.

Concepts in valuation: The time value of money, why money has time value, compound and present value of single amount and annuity, determining the annuity value, determining the yield on an investment.

Cost of Capital: Definitions, Concepts, Significance of cost of capital, Specific cost of capital: debt, preference, stock, equity, retained earnings, weighted average cost of capital, Uses of cost of capital.

Capital Budgeting: Meaning of capital budgeting, Importance of capital budgeting, capital budgeting process, Relevant cash flows and estimates, Evaluation techniques, (PB, ARR, NPV, IRR, profitability index), Selection strategy, Capital rationing.

Risk analysis and capital budgeting: Definition of risk, Concept of risk averse, Actual measurement of risk, Risk and capital budgeting process.

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Text Book:

M. Y. khan and P. K. Jain, Financial Management: Text and Problems, Tata McGraw, New Delhi

Reference Books:

E. F. Brigham, Financial Management: theory and practice, Dryden press, Hinsdale M. Pandey, Financial Management, Vikas publishing house Pvt Ltd., New delhi J.J Hampton , Financial Decision Making, Prentice- Hall international Inc., Englewood Cliffs