We have great pleasure in presenting First edition “Financial Management” written for students of PG courses. The related matters are written in a simple and easily understandable.
This volume is an attempt to pro vide the students with thorough understanding of Financial Management. We have presented the subject matter in a systematic manner with liberal use of charts and diagrams where ever necessary so as to make it interesting and sustain students’ interest.
Contents –
Unit – 1 Introduction to Financial Management
Learning Objective
Structure
Introduction
Meaning of Finance
Meaning of Financial Management
Definition of Financial Management
Goals of Financial Management
Profit Maximization and Wealth Maximization
Scope of Financial Management
Functions of Financial Management
Role of Finance Manager in India
Self-Activities
Key Words
Multiple Choice Questions
Review Questions
References
Unit – 2 Financial Planning
Learning Objective
Structure
Introduction
Financial Planning
Meaning of Financial Planning
Need of Financial Planning
Importance of Financial Planning
Steps in Financial Planning
Principles of a Sound Financial Plan
Factors Affecting Financial Plan
Self-Activities
Key Words
Multiple Choice Questions
Review Questions
References
Unit – 3 Time Value of Money
Learning Objective
Structure
Introduction
Meaning of Time Value of Money
Time Preference of Money
Techniques of Time Value of Money
Compounding Technique
Future Value of Single Flow
Multiple Flow and Annuity
Discounting Technique
Present Value of Single Flow
Multiple Flow and Annuity
Self-Activities
Key Words
Multiple Choice Questions
Review Questions
References
Unit – 4 Cost of Capital
Learning Objective
Structure
Introduction
Cost of Capital
Meaning of Computing Cost of Capital
Methods of Computing Cost of Capital
Cost of Equity Capital
Cost of Preferred Capital
Cost of Debt
Weighted Average Cost of Capital
Self-Activities
Key Words
Multiple Choice Questions
Review Questions
Practical Problems
References
Unit – 5 Financial Decision
Learning Objective
Structure
Introduction
Financial Decision
Meaning and Definitions of Financial Decision
Principles of Financial Decisions
Meaning of Capital Structure
Definition of Capital Structure
Factors Determining the Capital Structure
Concept of Optimum Capital Structure
EBIT
EPS Analysis
Leverages
Meaning of Leverages
Definition of Leverages
Types of Leverages
Operating Leverage
Financial Leverage
Combined Leverages
Self-Activities
Key Words
Multiple Choice Questions
Review Questions
References
Unit – 6 Capital Budgeting
Learning Objective
Structure
Introduction
Meaning of Capital Budgeting
Definition of Capital Budgeting
Features of Capital Budgeting
Significance of Capital Budgeting
Steps in Capital Budgeting Process
Techniques of Capital Budgeting
Traditional Methods
Pay Back Period
Accounting Rate of Return
DCF Methods
Net Present Value
Internal Rate of Return
Profitability Index
Self-Activities
Key Words
Multiple Choice Questions
Review Questions
References
Unit – 7 Dividend Decision
Learning Objective
Structure
Introduction
Dividend Decisions
Valuation of Firms
Determinants of Dividend Policy
Dividend Theories
Relevance and Irrelevance
Walter
Gordon
Modigliani-Miller Hypothesis
Bonus Issues
Stock Split
Self-Activities
Key Words
Multiple Choice Questions
Review Questions
References
Unit – 8 Working Capital Management
Learning Objective
Structure
Introduction
Meaning of Working Capital
Definition of Working Capital
Types of Working Capital
Operating Cycle
Determinants of Working Capital Needs
Estimation of Working Capital Requirements
Dangers of Excess
Inadequate Working Capital
Merits of Adequate Working Capital
Sources of Working Capital
Self-Activities
Key Words
Multiple Choice Questions
Review Questions
References
Unit – 9 Cash, Receivables and Inventory Management
Learning Objective
Structure
Introduction
Cash Management
Motives of Holding Cash
Goals of Cash Management
Importance of Cash Management
Functions of Cash Management
Benefits of Cash Management
Techniques of Cash Management
Receivable Management
Importance of Receivables Management
Objectives of Receivables Management
Factors Influencing the Size of Receivables
Techniques of Receivables Management
Inventory Management
Motives of Inventory Management
Techniques of Inventory Control
Self-Activities
Key Words
Multiple Choice Questions
Review Questions
References
Unit – 10 Financial Risk and Strategy
Learning Objective
Structure
Introduction
Meaning of Financial Risk
Types of financial risks
Risk–return trade-off
Value at Risk (VaR)
Contemporary issues in financial risk
Financial crises
FinTech-related risks
Cyber risk
ESG risk
Self-Activities
Key Words
Multiple Choice Questions
Review Questions
References