FINANCIAL MANAGEMENT

FULLY SOLVED BOOK LASY 5 YEARS PAPERS SOLVED PLUS GUESS   

UNIT-I: Nature of Financial Management; Scope and Objectives – Scope of FinancialManagement – Functions of finance – Objectives of Financial Management – Financing Decision: Cost of capital, Explicit, Implicit, Cost of capital for debt, redeemable debenture, Preference share, equity, CAPM approach to cost of equity, WACC

UNIT-II: Capital Expenditure – Capital expenditure Evaluation Techniques – Payback, ARR, NPV, IRR,PI, Decision criteria– Capital Rationing Practical Problems.

UNIT-III: Operating Leverage – Financial Leverage –Combined Leverage – EBIT – EPS Analysis – Alternative form of financing- Financial Break even point -Capital Structure - Capital Structure Theories – Net Income Approach – Net Operating Income (NOI) Approach – Modigliani-Miller (MM) Approach – Traditional Approach – Factors determining capital structure- Practical Problems.

UNIT-IV: Working Capital Management – Need and approaches to working Capital Management – Estimation of working capital – Practical Problems - Determinants of Working Capital – Source of Working Capital finance– Management of Cash: Motives of Holding Cash – Cash Management – Objectives – Factors Determining Cash Needs – Cash Budget – Cash Management Tools, Strategies Techniques/Processes – Practical Problems. Receivables Management: Objectives – Costs – Benefits – Credit Policies – Credit Terms – Collection Policies – Inventory Management: Objectives of Inventory Management – Inventory Management Techniques EOQ Models, Selective control techniques.

UNIT-V Dividend Decision: The irrelevance of Dividend – MM Hypothesis – Relevance ofDividends: Walter’s model, Gordon’s Model – Practical problems. Determinants of Dividend Policy: Dividend payout ratio – Stability of Dividends – Legal, Contractual and  Internal constraints and Restrictions – Owner’s considerations – Capital market considerations – Inflation.