The title ‘Financial Management’ to meet the specific need of B.Com. students of BNU and BCU.
The book comprising 7 chapters, the text essentially revolves around three fundamental issues of managing finance: raising funds, investing them judiciously and dispersal of profits, including dividends to shareholders.
Besides being comprehensive on the coverage of the subject, Financial Management has
been following unique pedagogic aids.
1. Each chapter begins with learning objectives.
2. Numerous problems with solutions are appended to each chapter.
3. Self-taught tools comprising fill-in-the-blank statements and true/false statements with
answers at the end of each chapter.
4. Skill-building exercises given the end of the book help students develop skills in the subject by bridging the gap between theory and practice.
The book is free from jargons and verbose. It is written in simple conventional style.
Contents –
1: Introduction to Finance and Financial Management
– Meaning of Finance – Objective of Finance Function – Organisation of Finance Department – Meaning and Definition of Financial Management – Goals of Financial Management – Financial Decisions – Scope of Financial Management – New Role of Finance Manager – Summary – Test Questions – Review Questions
2: Financial Planning
– Meaning and Definition of Financial Plan – Need, Importance of Financial Plan – Steps in Financial Planning – Principles of a Sound Financial Plan – Long-term (Strategic) Financial Plans – Short-term (Operating) Financial Plans – Factors affecting a Sound Financial Plan – Limitations of Financial Plan – Summary – Test Questions – Review Questions
3: The Time Value of Money
– Meaning of Time Value of Money – Time Preference of Money – Techniques of Time Value of Money – Future Value Simple Interest – Compounding Techniques – Future Value of a Single (Amount) Flow – Future Value of Multiple Flow (Uneven Flow) – Discounting Technique – Present Value of a Single Flow – Shorter Discounting Periods – Doubling Period – Thumb Rules 72 and 69 – Summary – Solved Problems – Test Questions – Review Questions – Problems
4: Capital Structure and Leverages (Financing Decision)
– Meaning and Importance Financing Decision Definition of Capital Structure – Factors Determining Capital Structure – Concept of Optimum Capital Structure – Features of Optimum Capital Structure – Computation of Optimum Capital Structure – Patterns of Capital Structure – Computation and Analysis – EBIT – EPS Analysis – Indifference Point – Leverages – Types of Leverages – Summary – Solved Problems – Test Questions – Review Questions – Problems
5: Capital Budgeting (Investment Decision)
– Nature of Fixed Assets – Meaning and Definition of Capital Budgeting – Meaning and Importance of Investment decision – Importance of Capital Budgeting – Difficulties in Capital Budgeting – Classification of Projects – Kinds of Capital Budgeting – Steps in Capital Budgeting – Techniques of Capital Budgeting – Traditional Methods – Discounted Cash Flow (DCF) Methods – Compare and Contrast ‘NPV’ with ‘IRR’ – Summary – Solved Problems – Test Questions – Review Questions – Problems
6: Working Capital Management
– Meaning and Definition of Working Capital – Concept of Working Capital – Types of Working Capital – Distinction between Permanent and Temporary Working Capital – Importance of Working Capital – Objectives of Working Capital Management – Need for Working Capital – Cash Conversion Cycle – Impact of Excess and Inadequate Working Capital – Factors affecting Working Capital – Estimation of Working Capital – Sources of Working Capital – Cash Management – Nature of Cash – Motives for Holding Cash – Objectives of Cash Management – Facets of Cash Management – Receivables Management – Nature of Accounts Receivables – Meaning of Accounts Receivables Management – Objectives of Accounts Receivables Management – Cost of Accounts Receivables Management – Benefits of Accounts Receivables Management – Inventory Management – Meaning and Definition of Inventory – Components of Inventory – Inventory Management Motives – Objectives of Inventory Management – Summary – Solved Problems – Test Questions – Review Questions – Problems
7: Sources of Working Capital
– Financing of Short-term Working Capital – Security Required in Bank Finance – Factoring – Types of Factoring – Financing of Long-term Working Capital – Summary – Test Questions – Review Questions
Skill Development Activities
Appendix
Glossary
