Name of Institute: Indus Institute of Management Studies (IIMS)

Name of Faculty: Mrs Nirali Dave

Course code: BC0502

Course name: Fundamental of Financial Management
Pre-requisites Fundamental of Financial Management
Credit points: 6 Credits
Offered Semester: B.com V

Course Coordinator(1 to 15 weeks)

Full Name: Mrs Nirali Dave
Department with siting location: IIMS
Telephone:9428609964
Email:[email protected]
Consultation times: 2 to 4PM

Course Lecturer(1 to 15 weeks)

Full name: Mrs Nirali Dave
Department with siting location: 4th Floor, Bhanwar Building.
Email: [email protected]
Consultation times: 2 to 4 PM

Students will be contacted throughout the Session via Mail with important information
relating to this Course.
Course Objectives
 The objective of this course is to inform the students about the basic concepts of financial
management and contemporary theory and policy in order to master the concepts, theories and
technique of financial management, what represents the condition of profitable business
operations and survival respectively development of business subjects and the economy as a
whole.
 Students should acquire the basic knowledge by means of combining theoretical cognitions and
practical attitudes to enable them the understanding of financial problems in business practice
after completed the studies.
 The purpose of the course is to offer the students relevant, systematic, efficient and actual
knowledge of financial management that can be applied in practice with making financial
decisions and resolving financial problems.

Course Outcomes (CO)

CO1 To provide introduction to Financial Management. Time value of money, Risk and Return
(Capital Asset Pricing Model), Valuation of securities shares and bonds.
CO2 To Make them understand different methods of investment decision .
CO3 To make them understand the cost of capital in wide aspects
CO4 To provide knowledge about dividend policies and various dividend models.
CO5 To enable them to understand working capital management
CO6 To make them understand working capital management in inventory, cash receivables,
sources of short term and long term finances.

Subject Fundamental of Financial Management B.Com V 2021

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Course Outline
UNIT -I [15]
Introduction
Nature, scope and objective of Financial Management, Time value of money, Risk and return
(including Capital Asset Pricing Model), Valuation of securities – Bonds and Equities
Investment Decisions
The Capital Budgeting Process, Cash flow Estimation, Payback Period Method, Accounting Rate of
Return, Net Present Value (NPV), Net Terminal Value, Internal Rate of Return (IRR), Profitability
Index, Capital budgeting under Risk – Certainty Equivalent Approach and Risk- Adjusted Discount
Rate.
UNIT – II [15]
Financing Decisions
Cost of Capital and Financing Decision: Sources of long-term financing Estimation of components
of cost of capital. Methods for Calculating cost of equity capital, Cost of Retained Earnings, Cost of
Debt and Cost of Preference Capital, Weighted Average cost of capital (WACC) and Marginal cost
of capital. Capital structure –Theories of Capital Structure (Net Income, Net Operating Income,
MM Hypothesis, Traditional Approach). Operating and financial leverage; Determinants of capital
structure
UNIT-III [15]
Dividend Decisions
Theories for Relevance and irrelevance of dividend decision for corporate valuation; Cash and stock
dividends; Dividend policies in practice
UNIT-IV [15]
Working Capital Decisions
Concepts of working capital, the risk-return trade off, sources of short-term finance, working capital
estimation, cash management, receivables management, inventory management and payables
management.
Method of delivery
Lectures, and Presentations

Study time
Six hours per week

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CO-PO Mapping (PO: Program Outcomes)

PO1 PO2 PO3 PO4 PO5 PO6

CO 1 3 - 2 - 3 3
CO 2 3 - 2 3 3 2
CO 3 3 3 2 3 2 3
CO 4 1 - 2 1 2 1
CO 5 3 2 - 3 - -
CO6 3 2 - 3 - -

Blooms Taxonomyand Knowledge retention(For reference)

(Blooms taxonomy has been given for reference)

Figure 1: Blooms Taxonomy

Figure 2: Knowledge retention

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Graduate Qualities and Capabilities covered
(Qualities graduates harness crediting this Course)

General Graduate Qualities Specific Department of

ManagementGraduate Capabilities
Informed 1 Professional knowledge, grounding &
Disciplinary Knowledge awareness

Independent learners 2 Information literacy, gathering &

Solution to the problem’s adjustments processing

Problem solvers 4 Problem solving skills

Thinking • critical • creative • practical
Effective communicators 5 Written communication
Develop the ability to reflect on issues on 6 Oral communication
hand. Through active participation 7 Teamwork
enhance the skills to communicate
verbally and in writing and develop
practices expected of today’s
professionals.
Responsible 10 Sustainability, societal &
Learning • capacity for life-long learning • environmental impact
flexibility • adaptability

Practical work:
Understand Derivatives followed by Indian Stock Market by assignment/visit.
Lecture/tutorial times:

Lecture Monday 3.10 - 4.10pm Room B404

Lecture Tuesday 9.00- 10.00am Room B404
Lecture Tuesday 1.00- 2.00pm Room B404
Lecture Wednesday 3.10 - 4.10pm Room B404
Lecture Thursday 9.00- 10.00 am Room B404
Lecture Friday 1.00- 2.00pm Room B404

Attendance Requirements

The University norms states that it is the responsibility of students to attend all lectures,
tutorials, seminars and practical work as stipulated in the Course outline. Minimum
attendance requirement as per university norms is compulsory for being eligible for mid
and end semester examinations.

Details of referencing system to be used in written work

Assignment
Case Study

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Text books
 Khan and Jain. Basic Financial Management, McGraw Hill Education
 Prasanna Chandra, Fundamentals of Financial Management. McGraw Hill Education
 Pandey, I.M. Financial Management. Vikas Publications.

.
Reference Books:
 Singh, Surender and Kaur, Rajeev. Fundamentals of Financial Management. Mayur
Paperback, New Delhi.
 Levy H. and M. Sarnat . Principles of Financial Management. Pearson Education
 James C. Van Horne and Sanjay Dhamija, Financial Management and Policy, Pearson
Education
 Brigham and Houston, Fundamentals of Financial Management, Cengage Learning
 Singh, J.K. Financial Management- text and Problems. Dhanpat Rai and Company,
Delhi.
 Rustagi, R.P. Fundamentals of Financial Management. Taxmann Publication Pvt. Ltd.
 Bhabatosh Banerjee, Fundamentals of Financial Management, PHI Learning

ASSESSMENT GUIDELINES
Your final course mark will be calculated from the following:

Assignment 1 15 % (week 2) Objectives (1-2)

Attendance 5%
CIE 40% Objectives (1-2)
Final exam (closed book) 40% Objectives (1-2)

SUPPLEMENTARY ASSESSMENT
Students who receive an overall mark less than 40% in Internal or end semester will be
considered for supplementary assessment in the respective components (i.e Internal or
end semester) of semester concerned. Students must make themselves available during
the supplementary examination period to take up the respective components (mid
semester or end semester) and need to obtain the required minimum 40% marks to clear
the concerned components.

Practical Work Report/Laboratory Report:

A report on the practical work is due the subsequent week after completion of the class by
each group.

Late Work
Late assignments will not be accepted without supporting documentation. Late
submission of the reports will result in a deduction of -% of the maximum mark per
calendar day

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Format
All assignments must be presented in a neat, legible format with all information sources
correctly referenced. Assignment material handed in throughout the session that is
not neat and legible will not be marked and will be returned to the student.

Retention of Written Work

Written assessment work will be retained by the Course coordinator/lecturer for two weeks
after marking to be collected by the students.

University and Faculty Policies

Students should make themselves aware of the University and/or Faculty Policies
regarding plagiarism, special consideration, supplementary examinations and other
educational issues and student matters.

Plagiarism - Plagiarism is not acceptable and may result in the imposition of severe
penalties. Plagiarism is the use of another person’s work, or idea, as if it is his or her own
- if you have any doubts at all on what constitutes plagiarism, please consult your Course
coordinator or lecturer. Plagiarism will be penalized severely.

Do not copy the work of other students.

Do not share your work with other students (except where required for a group
activity or assessment)

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.

Course schedule(subject to change)

Teaching
CO Learning
Week # Topic & contents
Address Activity
ed (TLA)
Introduction CO1
Nature, scope and objective of Financial Management, Lecture and
Week 1
Time value of money, Risk and return (including Capital Presentation
Asset Pricing Model),
. CO1
Lecture and
Weeks2 Valuation of securities – Bonds and Equities
Presentation
Investment Decisions CO2
Week 3 The Capital Budgeting Process, Cash flow Estimation,
Payback Period Method, Accounting Rate of Return,
Net Present Value (NPV), Net Terminal Value, Internal CO2
Rate of Return (IRR), Profitability Index, Capital
Lecture and
Week 4 budgeting under Risk – Certainty Equivalent Approach
Presentation
and Risk- Adjusted Discount Rate.

Cost of Capital and Financing Decision: Sources of CO3

long-term financing Estimation of components of cost of Lecture and
Week 5
capital. Methods for Calculating cost of equity capital, Presentation
Cost of Retained Earnings,
Cost of Debt and Cost of Preference Capital, Weighted CO4
Average cost of capital (WACC) and Marginal cost of
capital. Capital structure –Theories of Capital Structure
(Net Income, Net Operating Income, MM Hypothesis, Lecture and
Week 6
Traditional Approach). Operating and financial Presentation
leverage; Determinants of capital structure

CO4
Theories for Relevance and irrelevance of dividend Lecture and
Week 7
decision for corporate valuation; Presentation
Cash and stock dividends; Dividend policies in practice Co5
Week8

Working Capital Decisions CO5

Concepts of working capital, the risk-return trade off, Lecture and
Week 9 sources of short-term finance. Presentation

CO1,2 Lecture and

Week 10 Revision
Presentation

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 Lecture and
Week 11 Mid Sem Exam
Presentation
CO6
working capital estimation, cash management, Lecture and
Week 12
receivables management,Revision Presentation
CO6
working capital estimation, cash management,
Week 13
receivables management,
inventory management and payables management. CO6
Week 14

CO5,6
Week 15 Revision

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