Lovely Professional University,Punjab

Format For Instruction Plan [for Courses with Lectures and Tutorials

Course No MGT517

Cours Title FINANCIAL MANAGEMENT

Course Planner 13500 :: Anushital Sinha

Lectures Tutorial Practical Credits 4 1 0 5

Text Book:

1 PandeyI M, Financial Management, 9th Ed, Vikas Publishing House Pvt. Ltd, 2006.

Other Specific Book:

2 Srivastava Rajiv and Misra Anil, 1st Ed, Oxford University Press, 2008. 3 3. Chandra Prasanna, Financial Management: Theory and Practice, 7th Ed, Tata Mc Graw Hill, 2008

Other Reading Sr No Jouranls atricles as compulsary readings (specific articles, Complete reference) 4 Mian Sajid, Working Capital Requirements & determining Factors in Pakistan, ICFAI Journal of Applied finance, Vol 15, No 4, April 2009 5 Amitabh Gupta, Capital Expenditure & the market value of the firm, ICFAI Journal of Applied Finance, Vol 15, No 12, Dec 2009 6 Umashankar Saha, (2009) Managing the role of Venture capital in the development of brain capital Based Software Entrepreneurship in Kolkata, FINANCE INDIA, Vol XXIII No. I, Mar 2009. 7 Yamini Aggarwal, Capital structure Decision; A behavioural study on multiple objective framework, FINANCE INDIA, Vol XXIII No. 2, June 2009. 8 Ralph Pallion, EVA- Candid or Optimism- A panglossian & empirical Study, FINANCE INDIA,, Vol XXIII No.4, Dec 2008. 9 Balarm Dogra, An Empirical study on Capital structure of SMEs in Punjab, ICFAI Journal of Applied finance, Vol 15, no 3, mar 2009 10 Cashing in on factoring,Glenn Baker,NZ Business; Jun 2008; 22, 5; ABI/INFORM Trade & Industry,pg.38 http://proquest.umi.com/pqdweb? index=8&did=1555055831&SrchMode=1&sid=3&Fmt=6&VInst=PROD&VType=PQD& 11 MANAGEMENT ACCOUNTING - FINANCIAL STRATEGY,William Parrott. Financial Management. London: Oct 2009. pg. 44, 3 pgs http://proquest.umi.com/pqdweb?index=11&did=1893840261&SrchMode=1&sid=3&Fmt=6&VInst= 12 Estimating the cost of capital: considerations for small business,Ralph Palliam. The Journal of Risk Finance. London: 2005. Vol. 6, Iss. 4; pg. 335, 6 pgs http://proquest.umi.com/pqdweb?index=10&di 13 The Finance Function in Global Corporation, Mihir A Desai, HBR, July- Aug 2008, Page 108 Relevant Websites 1 Approved for Spring Session 2010-11

Sr. No. (Web adress) (only if relevant to the courses)

Salient Features

14 http://pages.stern.nyu.edu/~adamodar/New_Home_Page/PVP A Primer on the Time Value of Money- for Basics of Time Value of Money rimer/pvprimer.htm 15 http://pages.stern.nyu.edu/~adamodar/New_Home_Page/Acc A Primer on Financial Statements- for An understanding of the basic financial statements. Primer/accstate.htm

Detailed Plan For Lectures

Week Number Lecture Number Lecture Topic Chapters/Sections of Homework to be Assigned Pedagogical tool Textbook/other to students Demonstration/case reference study/images/anmatio n ctc. planned

Part 1
Week 1 Lecture 1 Financial Management: Meaning, Nature & Scope ->Reference :1,1/ Ch-1 ->Reference :2,2/Ch1 case: It Makes or Breaks Chap 1/ Book 2/ Page 3

Lecture 2

Finance Function: Financial Decisions in a Firm, Financial Managers Role Goal of Financial Management, Risk Return trade Off, Agency Problem, Organization of Finance Function Time Value of Money: Why Time Value, ->Reference :1,1/ Ch-1 ->Reference :2,2/Ch1

case:The Anandnagar Electricity Co. Chap 1/ Book 1/ Page 15 case:Bharat Heavy Electricals Ltd. (BHEL). Chap 1/ Book 1/ Page 15 ->Reference :1,1/ Ch-1 HomeWork 1 Allocation ->Reference :2,2/Ch 4 ->Reference :3,3/Ch 6 case:De Confounding 2Ajay With Compounding Chap 4/ Book 2/ Page 75

Lecture 3

Lecture 4

Approved for Spring Session 2010-11

Week 2

Lecture 5

Future Value of a Single Amount, Future Value of an Annuity.

->Reference :1,1/ Ch-1 ->Reference :2,2/Ch 4 ->Reference :3,3/Ch 6

Excel Application: F V of Single Sum, FV of Annuity. Excel Application: PV of Single Sum, PV of Variable Cash

Lecture 6

Present Value of a Single Amount,

->Reference :1, 1/ Term Paper 1 Allocation Ch-1 ->Reference :2,2/Ch 4 ->Reference :3,3/Ch 6

Lecture 7

Present Value of an Annuity

->Reference :1,1/ Ch-1 ->Reference :2,2/Ch 4 ->Reference :3,3/Ch 6

Lecture 8

Perpetuity, Growth Rate

->Reference :1,1/ Ch-1 ->Reference :2,2/Ch 4 ->Reference :3,3/Ch 6

case:Bharat Engg. Works. Chap 4/ Book 2/ Page 91

Week 3

Lecture 9

Sources of finance: Equity Shares, Preference Shares Sources of finance: Equity Shares, Preference Shares Debentures, Term Loans

->Reference :1,1/Ch 20 HomeWork 1 Submission ->Reference :3,3/Ch17 -18 ->Reference :1,1/Ch 20 ->Reference :3,3/Ch17 -18 ->Reference :1,1/Ch 20 ->Reference :2,3/Ch17 -18

Lecture 10

Lecture 11

Lecture 12

Venture capital,

->Reference :1,1/Ch 23 ->Reference :3,3/Ch 17 ch18 ch24 ->Reference :1,1/Ch 23 ->Reference :3,3/Ch 24

Week 4

Lecture 13

Leasing as a source of finance

Approved for Spring Session 2010-11

Part 2
Week 4 Lecture 14 Short term sources: Trade Credit, Accrued Expenses, Bank a Finance, Commercial papers, factoring Short term sources: Trade Credit, Accrued Expenses, Bank a Finance, Commercial papers, factoring Cost of Capital; Concept & Significance. ->Reference :1,1/Ch 9 HomeWork 2 Allocation ->Reference :2,2/Ch 13 ->Reference :3,3/ Ch 14 Week 5 Lecture 17 Cost of Debt: Redeemable & Irredeemable ->Reference :1,1/Ch 9 ->Reference :2,2/Ch 13 ->Reference :3,3/ Ch 14 Lecture 18 Cost of Debt: Redeemable & Irredeemable ->Reference :1,1/Ch 28 ch 31

Lecture 15

Lecture 16

Lecture 19

Cost of preference Shares

->Reference :1,1/Ch 9 ->Reference :3,3/ Ch 14 ->Reference :1,1/Ch 9 ->Reference :2,2/Ch 13 ->Reference :3,3/ Ch 14

Excel Applications

Lecture 20

Cost of equity, Cost of Retained earnings

Week 6

Lecture 21

Weighted average cost of capital, Determining the Proportions.

->Reference :1,1/Ch 9 ->Reference :2,2/Ch 13 ->Reference :3,3/ Ch 14

case:Solidaire Infrastructure Chap 9/ Book 1/ Page 193

Lecture 22

Types of Risk; Systematic, Unsystematic, Calculation of Beta

->Reference :1, 1/ Ch 4 HomeWork 2 Submission -5 ->Reference :2,2/ Ch 5 ->Reference :3, 3/ Ch 8 Approved for Spring Session 2010-11

Week 6

Lecture 23

Risk & Return: Risk and Return of a Single Asset,

->Reference :1, 1/ Ch 4 -5 ->Reference :2,2/ Ch 5 ->Reference :3,3/ Ch 8 ->Reference :1,1/ Ch 4 Quiz 1 -5 ->Reference :2,2/ Ch 5 ->Reference :3,3/ Ch 8 ->Reference :1,1/ Ch 4 -5 ->Reference :2,2/ Ch 5 ->Reference :3,3/ Ch 8 ->Reference :1,1/ Ch 35 ->Reference :3,3/ Ch 33 ->Reference :1, 1/ Ch 4 -5 ->Reference :2, 2/ Ch 5 ->Reference :3,3/ Ch 8

case: The Ringmaster Cisrcus & Sehwag Chap 5/ Book 2/ Page 93

Lecture 24

Capital Asset pricing Model

Week 7

Lecture 25

Capital Asset pricing Model

Lecture 26

Economic value Added

case:Cadila Health care company Chap 35/ Book 1/ Page 740

Lecture 27

SML

Lecture 28

Revision

MID-TERM Part 3
Week 8 Lecture 29 Leverage: Financial & Operating leverage ->Reference :1, 1/ Ch14 ->Reference :2, 2/ Ch 17 ->Reference :3,3/ Ch14 ->Reference :1,1/ Ch14 ->Reference :2,2/ Ch 17 ->Reference :3,3/ Ch14 case:Goodwill Garagegood with Debt PartI Chap 17/ Book 2/ Page 400 case: Larsen & Turbo Ltd. Chap 14/ Book 1/ Page 303 case:Goodwill Garagegood with Debt PartII Chap 17/ Book 2/ Page 431

Lecture 30

Combination of Financial & Operating leverage, EBIT EPS Analysis.

Lecture 31

Capital Structure & Firm Value: Assumptions and Definitions, Net Income Approach, Net Operating Income Approach,

->Reference :1,1/ Ch 15 ->Reference :3,3/ Ch 19-20

Approved for Spring Session 2010-11

Week 8

Lecture 32

Capital Structure & Firm Value: Traditional theory, Modigliani and Miller Position, Taxation and Capital Structure. Factors affecting Capital Structure Decision.

->Reference :1,1/ Ch 15 ->Reference :3,3/ Ch 19-20

Week 9

Lecture 33

->Reference :1,1/ Ch 15 ->Reference :3,3/ Ch 19-20 ->Reference :1,1/ Ch 8 HomeWork 3 Allocation ->Reference :2,2/ Ch 11 ->Reference :3,3/ Ch11 case: Shalini The LCD TV, & Risk in capital Capital Bugdeting Part I Chap 11/ Book 2/ Page 261

Lecture 34

Capital Budgeting: Capital Budgeting Process, Nature & types of investment decision.

Lecture 35

Techniques of Capital Budgeting : Payback Period, Accounting Rate of Return Cash Flow for Investment Decisions Techniques of Capital Budgeting: Net Present Value, ->Reference :1,1/ Ch10 ->Reference :1,1/ Ch 8 ->Reference :2,2/ Ch 11 ->Reference :3,3/ Ch11 Shalini The LCD TV, & Risk in capital Capital Bugdeting Part II Chap 12/ Book 2/ Page 399

Lecture 36 Week 10 Lecture 37

Lecture 38

Internal Rate of Return, Profitability Index

->Reference :1,1/ Ch 8 ->Reference :2,2/ Ch 11 ->Reference :3,3/ Ch11 ->Reference :1, 1/ Ch HomeWork 3 Submission 12 ->Reference :2,2/ Ch12 ->Reference :3,3/ Ch 13

Excel Applications

Lecture 39

Risk Analysis in Capital Budgeting: Statistical Techniques for Risk Analysis

Approved for Spring Session 2010-11

Part 4
Week 10 Lecture 40 Conventional Techniques for Risk Analysis ->Reference :1,1/ Ch 12 ->Reference :2,2/ Ch12 ->Reference :3,3/ Ch 13 Week 11 Lecture 41 Sensitivity Analysis, Scenario Analysis, Break-even Analysis, ->Reference :1,1/ Ch 12 ->Reference :2,2/ Ch12 ->Reference :3,3/ Ch 13 Lecture 42 Simulation Analysis, Decision Tree Analysis, Capital Rationing: Meaning of Capital Rationing, Why Capital Rationing. Working capital management: Concept, significance, factors affecting Working Capital Estimation of Working Capital Requirements ->Reference :1,1/ Ch 12 ->Reference :2,2/ Ch12 ->Reference :3,3/ Ch 13 ->Reference :1,1/ Ch27 HomeWork 4 Allocation ->Reference :2,2/Ch 21 ->Reference :3,3/ Ch 26 ->Reference :1,1/ Ch27 Term Paper 1 Submission ->Reference :2,2/Ch 21 ->Reference :3,3/ Ch 26 Week 12 Lecture 45 Receivables Management: managing credit policy, five Cs of credit ->Reference :1,1/ Ch 28 ->Reference :2,2/Ch 23 ->Reference :3,3/ Ch 28 Lecture 46 Management of inventory, Motives for holding inventories, ->Reference :2,2/Ch 22 HomeWork 4 Submission case:Inventory process of BHEL ->Reference :3,3/ Ch 29 Chap 29/ Book 1/ Page ->Reference :1,1/ch 29 635 ->Reference :1,1/ch 29 ->Reference :2,2/ch 22 ->Reference :3,3/ch 29 Approved for Spring Session 2010-11 Excel Applications

Lecture 43

Lecture 44

Lecture 47

EOQ,ABC Analysis

Week 12

Lecture 48

Management of cash, facets of cash, Motives for holding cash, Models of Cash Cash Planning: Preparation of Cash Budget

->Reference :1,1/Ch 30 ->Reference :2,2/Ch 24

Week 13

Lecture 49 Lecture 50

->Reference :2,2/Ch 24 ->Reference :1,1/Ch 30 ->Reference :1,1/ch 30 Quiz 2 ->Reference :2,2/ ch 24 ->Reference :3,3/ ch 27 ->Reference :1, 1/ Ch 17-18 ->Reference :2, 2/ Ch 19 ->Reference :3,3/ Ch 21 22 ->Reference :1,1/ Ch 17-18 ->Reference :2,2/ Ch 19 ->Reference :3,3/ch 21 ch 22 case: Bright paints Limited Chap 30/ Book 1/ Page 656

Lecture 51

Dividend Policy: Issues in Dividend Policy, Types of dividend. Dividend Relevance; Walter, gordon

Lecture 52

Dividend irrelevance, Information content of dividend decision, Bonus Shares Vs. Stock Split

Spill Over
Week 14 Lecture 53 Case Study on working Capital management A.C Company Chap18 / Book 1/ Page 413 Lecture 54 Case Study on Inventory Mangement Maruti Udyog Limited. Chap 21/ Book 2/ Page 545 Lecture 55 Mergers and Acquisition ->Reference :3,3/ ch 34

Details of homework and case studies

Approved for Spring Session 2010-11

Homework No. Homework 1

Topic of the Homework Analytical problems on Time Value of Money Assignment Based Test

Nature of homework (group/individuals/field work Individual

Homework 2

Analytical problems on Cost of Capital Assignment Based Test

Individual

Homework 3

Practical Problems on Capital Budgeting- NPV/IRR etc and Assignment Based Test

Individual

Homework 4

Practical Problems on Estimation of Working Capital Requirements and Assignment Based Test

Individual

Scheme for CA:out of 100*

Component Homework Quiz Term Paper Frequency 3 2 1 Total :Out Of 4 Each Marks Total Marks 15 15 25 55 45 30 25 100

* In ENG courses wherever the total exceeds 100, consider x best out of y components of CA, as explained in teacher's guide available on the UMS List of suggested topics for term paper[at least 15] (Student to spend about 15 hrs on any one specified term paper) Sr. No. Topic 1 Outline detailed information regarding the assigned company in terms of its background, history, management;Company position relative to industry Change in its share price over a year Capital Structure for last 3 years;Liquidity position;Financial Credibility through balance sheet, Profit and loss A/C Credit Rating of company;IPO issues made by company during last 5 years;Track and report news relevant to company chronologically (date wise) and its impact on share price of company. This term paper may be assigned to any number of students allotting a different company to each student. 2 Impact of capital structure on the risk and return aspect of shareholders for the last five years 3 A survey of corporate leasing analysis of any two companies 4 Growth & Prospects of venture Capital In India. 9 Approved for Spring Session 2010-11

5 Dividend policy: its influence on the value of the enterprise for the last five years 6 Pre and post impact of dividend announcements on share price of any one company for the last five years 7 Analysis of current asset composition of one company, each in Indian manufacturing, food products and electronics industry 8 Analysis of capital structure of a cement plant, software development firm and a call centre 9 Comparative analysis of cost of capital of two companies in the same industry for the last five years 10 Analysis of capital structure of a company over a period of ten years 11 Comparative analysis of Dividend policies of two companies in the same industry for the last three years 12 Comparative analysis of working capital management practices of two companies in the same industry for the last five years 13 Analysis of cost of capital of an insurance, Electronic and an automobile company 14 Comparative analysis of Inventory management practices of any two companies of two different industries for the last five years 15 Comparative analysis of capital structure of two companies in the same industry for the last three years

Plan for Tutorial: (Please do not use these time slots for syllabus coverage)
Tutorial No. Lecture Topic Type of pedagogical tool(s) planned (case analysis,problem solving test,role play,business game etc)

Tutorial 1 Tutorial 2 Tutorial 3 Tutorial 4 Tutorial 5 Tutorial 6 Tutorial 7

Basics of financial Management; Case study: FM at Hero Honda Time value of Money Homework Based Test I & Sources of finance Cost of Capital Calculation of Beta Homework Based Test II & EVA & revision review I of term paper

Case analysis Problem solving Presentation & Discussion by students Problem solving Problem solving

After Mid-Term
Tutorial 8 Tutorial 9 Tutorial 10 10 Leverage: Operating & Financial review II of term paper Homework Based Test III & Capital Budgeting Problem solving Approved for Spring Session 2010-11 Problem solving

Tutorial 11 Tutorial 12 Tutorial 13

Capital Budgeting Homework Based Test IV & Working Capital management Dividend Policy

Problem solving Problem solving Discussion with latest examples

11

Approved for Spring Session 2010-11