FMP (MCOM 2nd)

UNIT-I

Financial management - Scope, finance functions and its organization, objectives of financial management; time value of money; sources of long term finance. Financial Forecasting: Sales Forecast Preparation of Performa Income Statement and Balance Sheet Growth and External Funds Requirement (EFR).

UNIT- II

Investment decisions; importance, difficulties, determining cash flows, methods of capital budgeting; risk analysis (risk adjusted discount rate methods and certainly equivalent methods) cost of different sources of raising capital; weighted average cost of capital.

UNIT- III

Capital Structure decisions - Leverage: Measuring and analyzing the implications of Leverage Operating Leverage, Financial Leverage and Total Leverage; capital structure theories - NI, NOI, traditional and M-M theories; Capital Structure Policy: Business & Financial Risk, A Total Risk Perspective Business & Financial Risk, A Market Risk Perspective Determinants of Capital Structure Decision Approach to Estimating the Target Capital Structure Variations in Capital Structures, EBIT / EPS Analysis and ROI/ROE Analysis.

UNIT- IV

Determinants of dividend models - Walter, Gordon & M.M. models. Working Capital – Meaning, need , determinants; estimation of working capital need; management of cash; inventory & receivable.