COURSE PLAN_FM2_S.SatyaMoorthi

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Course File

2010-11 3rd Trimester

COURSE FILE

Faculty Details

Name of the Faculty : Mr. S. Satya Moorthi

Designation : Assistant Professor

Department : VIT BUSINESS MANAGEMENT

Course Details

Name of the Class : I MBA Batch 1 batch

Branch : MBA Trimester : 3

Title of the Subject : Financial Management II S. Code : MBA 626

Type of the Course : Core Paper No. of Students : 40 approx

Brief Objective of the

Subject: To develop a thorough understanding of the role of a corporate financialmanager, in relation to financial decision making process involving investment,

financing, dividend and working capital management.

Performance Target

Details Planned Actual (to be filled after the coursecompletion)

% of Pass 100

% of First Class 60

Class Average Marks 65

Qualitative Objectives

(if any)

VITU N I V E R S I T Y

(Estd. u/s 3 of UGC Act 1956)



Financial Management – II

L T P C

3 - - 2

Version No.:

Course Prerequisite: Financial Management – I

Objectives: To develop a through understanding of the role of financial manager in relation to dividend

and liquidity decisions.

Expected Outcome: Knowledge about the dividend, working capital requirements, sources of finance,

lease financing and valuation of firms.

CONTENTS

Unit Description Hours

1.aDividend: Approaches – determinants – types of dividend policy –effects and objects

of bonus issue – Dividend theories and Models - Walter’s Model, Gordon’s Model and

MM approach

07

1.bWorking capital requirements: Meaning - concept – kinds – importanceof adequate working capital - determinants of working capital.-management of cash, receivables and inventory

08

2.a

Sources of Finance: Various sources of raising short term and long term funds – kinds

of ownership securities – internal financing – loan financing – innovative sources of finance

05

2.b

Lease Financing and Hire Purchase: Meaning – types – financial evaluation – methods of computation lease rentals – economics 0f leasing – meaning and features of

hire purchase – methods of computing instalment under hire purchase – method of

splitting HP, instalment – leasing Vs. HP

06

2.cValuation of Firms: Need for Valuation – Different Approaches – Asset BasedApproach – Earnings Based Approach – Cash Flow Approach

04

Text Books1. Shashi K. Gupta, R.K. Sharma, (2006), Financial Management , Kalyani Publishers, Mumba

Reference Books:

1. I.M. Pandey, (2005), Financial Management , Ninth Edition., Vikas publishing house Pvt ltd.,

New Delhi.2. Khan and Jain , (2006), Financial Management , Tata McGraw Hill, New Delhi.

Mode of Evaluation: Mid Term, End Term and any of these following components MinProjects / Seminars / Quizzes(announced and / or unannounced case analysis and case

discussion / Term Paper Class Participation / Assessment of Class Notes etcRecommended by the Board of Studies on:

Date of Approval by the Academic Council:



TEACHING PLAN

Session Topic Resource / Material

1 Sources of Finance Overview of Long-term Sources

2 Retained earnings; Equity capital Chapter 21

3 Equity capital Chapter 22

4 Debt and Term Loans Chapter 23

5 Other innovative methods Chapter 24

6 Case & Exercise Hand-outs

7 Short-term sources – features;

trade credit

Chapter 17 & Hand-outs

8 Bank credit & bill discounting Chapter 17 & Hand-outs

9 Lease Financing Chapter 25

10 Hire purchase Finance Chapter 25

11 Venture Capital Financing Chapter 2612 Case & Exercise Hand-outs

13 Working Capital

Management

Overview Chapter 13

14 Cash & Liquidity Management Chapter 14

15 Receivables Management Chapter 15

16 Inventory Management Chapter 16

17 Working Capital Financing Chapter 17



20 Dividend Decisions Dividend Policy Chapter 31

21 Determinants of Dividend Policy Chapter 3122 MM Model Chapter 30

23 Walter’s Model Chapter 30

24 Gordon’s Approach Chapter 30

25 Exercise Chapter 30

26 Valuation of Firms Framework of Valuation Chapter 32

27 Methods of Valuation Chapter 32



30 Summary & Revision

Actual Date of Completion of the Unit and Remarks:

Signature of the PG Coordinator Signature of the Faculty



TEACHING PEDAGOGY

Combination of lectures (aided by ppts), case / live examples, numerical problems, and

assignments & presentations by students.

Text Book:

1. . Khan and Jain, (2007), Financial Management , 5th ed., Tata McGraw Hill, New Delhi.

Reference Books:

2. Prasanna Chandra, Financial Management , 7th ed, Tata McGraw Hill, New Delhi.

3. I.M. Pandey, (2005), Financial Management , 9th ed., Vikas Publishing House, New Delhi.

Additional Resources:

Financial dailies (Economic Times & Business Line) and selected web resources.

E VALUATION PLAN

1. MID TERM EXAM 20 %

2. INTERNAL MARKS 40 %

Comprising of:

a. Class Participation

b. Case Presentation

c. Regular Assignments

d. Surprise Quizzes

3. FINAL EXAMINATION 40 %

Documents

COURSE PLAN_FM2_S.SatyaMoorthi