Chanakya National Law University, Patna
B.B.A., LL.B. (H) 2023-24; SEMESTER- II
Course Title: Financial Management
Course Overview:
Financial Management deals with the procurement of funds and their effective
utilization in the business. It is concerned with investment, financing and dividend
decisions about the objectives of the company.
In this paper, the students will-
Study the nature and scope of financial management in detail.
Study the detailed aspect of Capital budgeting refers to long-term planning
for proposed capital outlays and their financing. Thus, it includes both the
raising of long-term funds as well as their utilisation. It may, thus, be
defined as the firm’s formal process for the acquisition and investment of
capital. Capital budgeting requires the use of various methods including
statistical techniques which have been discussed in the chapter.
Study the overview of the Capital Structure of a firm as a reflection of the
overall investment and financing strategy of the firm. It shows how much
reliance is being placed by the firm on external sources of finance and how
much internal accruals are being used to finance expansions. Optimal capital
structure means the arrangement of various components of the structure in
tune with both the long-term and short-term objectives of the [Link] and
analyze the various sources of raising long-term finance and various
methods of calculation of the cost of capital.
Study the application-based concept ofDividend policy to determine what
portion of earnings will be paid out to stockholders and what portion will be
retained in the business to finance long-term growth.
Study and analyze the concept of working capital managementof a business
which is used to carry out day-to-day business operations of a firm. Working
capital is vital for the proper and smooth functioning of an organisation.
Learning Outcomes
The corporate legal advisor by their expertise in corporate laws and procedures are
in an eminently suitable position to
a) Present to the Board of Directors, the financial, legal, and personnel aspects
of modernization, expansion, and diversification of the existing projects of
new projects;
b) Obtain the decision from the Board; and
c) Interact effectively with the financial institutions in the process of procuring
the finance.
The legal aspects of finance are becoming increasingly important, and a Corporate
Legal Advisor is expected to successfully and effectively handle, amongst other
things, important aspects such as management of public issues, syndication of
loans, obtaining project approvals, raising of finance through public deposits and
debentures or bonds, etc.
All these essentials require expert knowledge of the diverse and complex
procedures involved. It is suggested to include this paper to equip the students with
the requisite fundamentals of Financial Management. It has been a blend of
theoretical concepts and practical orientation.
List of Topics/ Modules
Topic/ Module Contents/ Concepts Sessions
/
Lectures
Module I: Nature and Nature and Scope of Financial Management. 1-8
Scope of Financial Risk-Return and Value of the Firm.
Management: Objectives of the Financial Management.
Profit Maximisation vs. Wealth Maximisation.
Emerging roles of Finance Managers
Module II: Meaning, Concept, Compounding, and 9-16
Capital Budgeting: Discounting techniques
Concepts of Annuity and Perpetuity.
Capital Budgeting Process.
Techniques of Capital Budgeting- Discounted
and Non-Discounted Cash Flow Methods.
Capital Rationing.
Case Study
Module III: Capital Introduction- Meaning and Significance. 17-24
Structure: Optimal Capital Structure.
Determinants of Capital Structure.
Theories of Capital Structure.
EBIT – EPS Analysis; EBITDA Analysis.
Case Study
Module IV: Sources of Sources, Meaning, Factors Affecting Cost of 25-30
raising long-term Capital.
finance and Cost of Methods for Calculating the cost of capital.
Capital: Weighted Average Cost of Capital (WACC);
Marginal Cost of Capital.
Module V: Dividend Introduction- Types. 31-37
Policy: Determinants and Constraints of Dividend
Policy.
Forms of Dividend; Different Dividend
Theories.
Case Study
Module VI: Working Meaning, Types, 38-45
Capital Management: Determinants and Assessment of Working
Capital Requirements,
Negative Working Capital.
Operating Cycle Concept
Applications of Quantitative Techniques.
Financing of Working Capital.
Banking Norms and Macro Aspects.
Case Study
Recommended/Reference Text Books and Resources:
Text Books
1. M Y Khan & P K Jain: Basic Financial Management; McGraw Hill Education (India) Pvt
Ltd.
2. R. P. Rustagi: Financial Management – Theory, Concepts, and Problems; Taxmann
Publications (P) Ltd.
3. Prasanna Chandra: Investment Analysis and Portfolio Management; McGraw Hill
Education (India) Pvt Ltd.
4. I M Pandey: Financial Management; Vikas Publication House Ltd.
5. J Van Horne &: Fundamentals of Financial Management; Pearson Education Ltd. John M.
Wachowicz
References
Aswath Damodaran: Applied Corporate Finance; WILEY Publication
Ravi M. Kishore: Financial Management; TAXMANN’S Publication
Eugene F Brigham &: Financial Management – Theory and Practice;
Cengage Learning (India) Michael C Ehrhardt Pvt Ltd.
Instructor Details
Name of the Instructor: ASHOK KUMAR SHARMA
Telephone: 9234813647, 7488519466.
WhatsApp Number: 9234813647
Email: ashokkumarsharma@[Link]
Signature