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Intorduction To FM Introduction

The document outlines the course 'Introduction to Financial Management,' which aims to equip students with analytical skills for corporate financial decision-making and real-life application of financial concepts. Key topics include sources of funds, cost of capital, investment decisions, and dividend policies, along with evaluation criteria for presentations and internal assessments. Students are encouraged to stay informed about current business events and trends in finance to enhance their learning experience.

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9 views22 pages

Intorduction To FM Introduction

The document outlines the course 'Introduction to Financial Management,' which aims to equip students with analytical skills for corporate financial decision-making and real-life application of financial concepts. Key topics include sources of funds, cost of capital, investment decisions, and dividend policies, along with evaluation criteria for presentations and internal assessments. Students are encouraged to stay informed about current business events and trends in finance to enhance their learning experience.

Uploaded by

ravi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Introduction to Financial

Management
Topic 1: Week 1

Introduction and Concepts


Course Description
 Course Name: Introduction to Financial Management

 Number of Credits: 2 (30 hrs, 60 internal + 40 external)

 Level:5

 Learning Objective(s)
The students will be able to:
 Develop an analytical/practical approach to corporate fin
decision making
 Apply & analyse the concepts in real life situations.
 Evaluate various theories related to different concepts.
CFO?????
 Funds??????
 Long term Investment – Investing Decisions
 Day to day operations – Working Capital requirements

 How to raise funds????


 Sources of funds???
 Debt – loans, borrowings, Bonds/ Debentures
 Surplus
 Equity – Stocks
 Owners’ contribution
 Partners’ contribution
 Angel Investor
 VC/PE
Cost of debt – Interest

Cost of equity – dividend

Risk = compensated return

Expected return to the investor =


cost of equity
Opportunity cost

Risk

Inflation

Expectations >
CFO???? No free lunch?
Funds?????????
Sources of funds?????
Surplus
Borrowing/ Debt – loans,
bonds/debentures
Raise money from public – IPO/ FPO –
Equity/stocks
Owner’s contribution
Partners’ contribution
Angel Investors
VC/PE (Venture Capital/ private Equity)
CFO???? No free lunch?
Cost ???
 Funds?????????
 Sources of funds?????
 Surplus
 Borrowing/ Debt – loans, bonds/debentures –
fixed income interest
 Raise money from public – IPO/ FPO –
Equity/stocks – dividends/ profit
 Owner’s contribution - profit
 Partners’ contribution - profit
 Angel Investors - profit
 VC/PE (Venture Capital/ private Equity) –
profit
CFO???
@ cheapest cost possible

Cost of Debt - interest

Cost of equity -
Return to the investor = cost to
the company

Expected Rate of return to the


equity holder = cost of equity
 Risk = higher returns
 Debt Vs Equity which is cheaper
Lend 10,000 for 1 year Time
Value of Money
Inflation

Opportunity cost –

Risk
Financing decision
How to raise funds? @cheapest
cost possible – Capital structure
(Optimum mix of debt and
Equity)
Cost of capital
CFO 100 cr (debt + Equity) 11%
cost Investing Decision
N - 85 cr 10% 5 year
S - 90 cr 10.5%
 W - 95 cr 10.8%
 E - 90 cr 10.7%

 CEO ?????? – No proposals


 Cashinflows> Cashoutflows
 NPV>0
 Returns > Cost
 IRR> WACC (weighted avg cost of capital)
Profit Appropriation - Dividend
decisions
Retained earnings

Dividend Policy
Course Content
Topic Sub-topic

a. Capital Markets and Institutions (Overview of different markets)


Financial Environment of Business
b. Regulatory Framework

Introduction to Financial Management Objectives and Functions

Understanding a firm through analysis (application of Financial


Financial Statement Analysis
Statement Analysis)
Long Term and Short Term Financial
Overview of different Long Term and Short Term Sources of Finance
Planning
Investment Decisions Time Value of Money
i. Valuation of Bonds and ii. Valuation of Stocks based on Dividend
Investment Decisions
Distribution
Investment Decisions Capital Budgeting
Investment Decisions i. Risk & Return and ii. WACC and its implications
Financing Decisions Long Term & Short Term Financing and Capital Structuring Decisions

Estimation of Working Capital requirement, Cash Management,


Working Capital Management
Inventory Management, Receivables Management
Dividend Decisions Dividend Decisions
Other Topics - Financial Distress Financial Distress
Financing and Investment, Mergers and Acquisitions, International
Other Topics - Experiential Learning
Financial Management, Leverage
Reference
Books:
Book from library
Coursera course
Real time Case studies
Bloomberg Terminal
Economic Times, Business Standard, Mint
Internal Evaluation: 60 Marks
Quiz- 30 Marks (Mid Term)
Case study Assignment – 30 marks
Class Participation/Discussion
Criteria for Presentation Evaluation
Understanding of concept and content
Presentation quality
Creativity
Delivery
Ability to answer queries

Marks for class participation!!


What I expect from you..
Be aware of the happenings in the Business
world (specifically in your industry domain)
◦ Stock Market movements
◦ Policy updates from RBI and Regulators
◦ Business news related to the topic of course
◦ Any IPOs, Mergers etc announced in the news
World of Finance: Careers in Finance
Your Journey Begins Now!

 🌟 Choose your path


 🎯 Start early
 📚 Keep learning
 💼 Gain real-world exposure

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