No. of Lecture Hrs/week: 04
Total No. of Lecture Hrs. 56
Practical Component: 01 Hr/ Week
Exam Hrs. 03
IA Marks: 50
Exam Marks: 100
Working capital management
Determination of level of current Assets Sources for financing working capital. Bank
finance for working capital (No problems on estimation of working capital) Working capital
financing: Short term financing of working capital, long term financing of working capital.
Working capital leverages
Forecasting cash flows – Cash budgets, long-term cash forecasting, monitoring collections and
receivables, optimal cash balances – Baumol model, Miller-orr model, and stone model.
Strategies for managing surplus fund.
Credit management through credit policy variables, marginal analysis,
evaluation: Numerical credit scoring a n d d i s c r i m i n a t e anal ysi s . Control o f a c c o u n t s
recei v abl es , Factoring.
Determinations of inventory control levels: Ordering, reordering, danger level. EOQ model.
Pricing of raw material. Monitoring and control of inventories, ABC Analysis.
Capital structure decisions
capital structure & market value of a firm. Theories of capital structure
NOI approach, Modigliani Miller approach, traditional approach. Arbitrage
process in capital structure. Planning the capital structure: EBIT and EPS analysis. ROI &
ROE analysis. Capital structure policy.
Theories of dividend policy: relevance and irrelevance dividend decision. Walter‟s &
Gordon‟s model, Modigliani & Miller approach. Dividend policies – stable dividend, stable
payout and growth. Bonus shares and stock split corporate dividend behavior. Legal and
procedural aspects of dividends Corporate Dividend Tax.
Special issues in financial management
Corporate financial modelling Agency problem and consideration. Effect of inflation on Asset
value, firm value, returns Financial planning – Basis of financial planning, sales forecast method,
pro-forma P & L account method, pro-forma balance sheet method, determination of External
Financing Requirement (EFR).