Financial Management

Financial Management Book For B.Com (Hons.) II Year of Awadhesh Pratap Singh University, Devi Ahilya University, Rani Durgavati Vishwavidyalaya, Dr. Harisingh Gour University, Barkatullah University, Jiwaji University, Vikram University

Management education in our country has recently experienced a sea-change in its curriculum, wherein electives in finance and marketing have been enlarged. In fact, finance has assumed greater significance for all those pursuing a management course or its ally. It is now a well-established fact that the success of any business concern depends on inter-alia upon the efficiency with which funds are being managed. As such, management students must have an opportunity to gain effective knowledge of various aspects of finance i.e., procurement and utilization of funds in an optimal way. That is why there is a separate paper/subject of `Financial Management’ almost in every curriculum As a teacher of Accounting and Finance, I have gathered from the students interaction that there is a need of a text which must provide a comprehensive understanding of principles, problems, techniques of financial management, i.e., of financing, investment, and dividend decisions. It is this need which prompted me to write a text in a very simple style in a native context.

Some pedagogical features of the Financial Management Book are :

1. Comprehensive presentation of the concepts and relevant theories;
2. Illustrative problems for the better understanding of the principles and techniques;
3.  Use of charts and figures to bring more clarity;
4. Exercises and problems to help the students in better learning and understanding.

Financial Management Syllabus For B.Com (Hons.) II Year of Awadhesh Pratap Singh University, Devi Ahilya University, Rani Durgavati Vishwavidyalaya, Dr. Harisingh Gour University, Barkatullah University, Jiwaji University, Vikram University

Unit-I: Financial Management: Meaning and definition, nature, scope and importance of Finance; Financial Goal—Profit vs. Wealth maximization; Financial function Traditional and modern concept – Investment, Financing and Dividend Decisions, Responsibility of Financial Manager.

Unit-II: Investment Decision: Concept, Types of Investment, Methods of Evaluation—PBP, NPV, IRR, ARR & PI Methods.

Unit-III: Cost of Capital: Meaning and Significance of Cost of Capital; Calculation of Cost of Debt, Preference Capital, Equity Capital and Retained Earnings; Combined Cost of Capital (Weighted); Cost of Equity and CAPM.

Unit-IV: Capital Structure Theories: meaning and definitions, capital structure theories (net income approach theory, net operating income theory, Modigliani and Miler theory, and traditional theory) optimum capital structure, determination of capital structure.

Unit-V: Operating and Financial Leverage: Measurement of leverage: Effects of operating and financial leverage on profit; Analyzing alternate financial plans; Calculation of operating financial and combined leverage, Degree of Operating and Financial Leverage.

Financial Management Book Contents

1. Financial Management
2. Financial Planning
3. Capitalisation
4. Capitalisation (Investment Decision)
5. Cost of Capital
6. Operating and Financial Leverage
7. Capital Structure(Concept and Planning)
8. Capital Structure(Theories and Determinants)
9. Dividend Decisions