Financial Management

Paper Code: 
MTM 225
Contact Hours: 

The basic purpose of this course is to develop an insight in the field of financial management so as to equip the student with basic knowledge required for financial decision making

Unit I: 
Unit I

Meaning, Nature, Scope, Importance and Objectives of Financial Management; Functions of a chief financial officer; Sources of finance- Long term and Short term; Indian financial system-structure and functions.

Unit II: 
Unit II

Time value of money-Compounding and Discounting concept and its applications; Risk and Return – Risk of a single asset, portfolio theory and risk diversification, Systematic and unsystematic risk, Capital Asset pricing model (CAPM)- Conceptual knowledge only.

Unit III: 
Unit III

Management of working capital- Meaning, Estimation of working capital requirements, Working capital financing by banks; Cash and Marketable securities management- Meaning and Principles of cash management;

Treasury Management- Meaning, Functions of Treasury department; Receivables management- Meaning and importance; Inventory management- Meaning, objectives and techniques-Economic order quantity, Re-order point, Fixing stock levels

Unit IV: 
Unit IV

Cost of Capital- Meaning, Cost of Debt, Preference and Equity Capital, Weighted average cost of capital; Capital Budgeting: Concept, need and objectives; Methods of Capital budgeting –Average Rate of Return, Payback period, Net present value, Internal Rate of Return, Profitability Index.

Unit V: 
Unit V

Leverage: Meaning, types of leverages and their significance; Capital Structure-Meaning, considerations in capital structure planning, value of firm and capital structure; Dividend Policy- Meaning, Factors affecting dividend decisions, Alternative forms of dividends, Types of dividend policies, Dividend policy models

Essential Readings: 
  • Sinha. P.K, Financial Management-tools and techniques, Excel Books
  • Srivastava and Misra, Financial Management, Second edition, Oxford University Press
  •  Agarwal, M.R. “Financial Management”, Garima Publication
  • Pathak V, “the Indian Financial System” Market institution and services “, Pearson


  • Chhandra Prassana, Financial Management, Tata McGraw Hill
  • Van Horne, Financial Management, PHI
  • Rustagi R.P, Fundamentals of Financial Management, Taxmann
  • Banerjee .B, Financial policy and Management Accounting, Eight edition, PHI


Academic Year: