LESSON PLAN

CLASS – XII TOPIC – FINANCIAL MANAGEMENT

PERIODS REQUIRED - 20
GIST OF THE TARGETTED TARGETTED LEARNING TEACHING METHODOLOGY ASSESSMENT
LESSON SKILLS OUTCOMES STRATEGIES
PLANNED/ TOOLS
 Understand the concept of Lecture methods: explained Concept,
financial management. role and objectives of Financial
Concept, role and
 Explain the role of financial Management.
objectives of Financial
management in an organisation.
Management Case study: used to improve higher
 Discuss the objectives of financial
thinking skill in financial management.
management
Demonstration methods: Financial
decisions: investment, financing and
dividend- Meaning and factors
Financial decisions: affecting.
investment, financing Understanding  Discuss the three financial 1. Oral Test
decisions and the factors affecting
and dividend- Meaning Skills them.
Question answered technique: for 2. Slip Test
and factors affecting identifying the decision whether it 3. Group Discussion
investing, financing or dividend
Reasoning 4. Quiz
decision and factors affecting
decisions. 5. Case studies
 Describe the concept of financial Lecture method: explained financial 6. Class Test
Financial Planning - Analytical planning and its objectives. planning concept and importance with 7. Worksheet
concept and Skills  Explain the importance of real examples. (see below)
importance
financial planning. 8. Home assignment
Lecture method: explained financial (see below)
Critical Skills  Understand the concept of capital
Capital Structure – planning concept and importance with
structure.
concept and factors real examples.
 Describe the factors determining
affecting capital
the choice of an appropriate Demonstration method: used to
structure
capital structure of a company. describe capital structure.
Group Discussion on: Requirement of
 Understand the concept of fixed
Fixed and Working fixed and working capital.
and working capital.
Capital - Concept and Factors affecting capital structure of a
 Describe the factors determining Company
factors affecting their
the requirements of fixed and
requirements
working capital.
Introducing real life examples
 ACTIVITIES PLANNED
Students Will Be Taken To both the places and be asked to note the
types and amount of fixed assets employed by them and the value of
A visit to a small kirana shop
stock held by each and make a rough estimate of capital requirements
and dmart
to study the difference in requirement of fixed and working capital by
each type of business
Instructional Aids  Chalk Board,
 Duster
 Pointer
 LCD Projector
Class Transaction Total: 20 periods (approx. 40 min each)
Transaction Methodology (The Transaction would proceed in the following manner :-
teacher can use the mentioned
techniques, wherever Strategy Used: Inductive and deductive reasoning, Brainstorming, graphic
applicable, and can use any organizer, think pair and share:
other too.) In this activity, students think about a particular question individually, then
they form pairs to discuss their answers. Following this, the results are
shared in a large classroom discussion. Alternatively, two pairs of students
can pair up to compare and discuss answers. This process forces students to
think individually, and then allows them to analyze and clarify their response
collaboratively.

Brain Storming:
In this activity, students are asked to generate ideas on a certain topic,
category or question while facilitator facilitate and record the answers on
the board.

Inquiry Based Learning: Inquiry-based learning uses different approaches to

learning, including small-group discussion and guided learning. Instead of
memorizing facts and material, students learn by doing. This allows them to
build knowledge through exploration, experience, and discussion.

Inductive and Deductive Learning: In Inductive type students proceed from

particular to general statement (example to formula) and in Deductive type
students proceed from general to particular.

Muddiest Point: Check comprehension and identify confusion, what was

most confusing about the material?

Brain Storming-The class would start with a discussion on what the students
have already learnt in the previous classes and hence what is it that they
would learn now. They would also be told the significance of the topic that
they would be studying.

Introduction of the topic - PPT and Digital Content would be shared

Guided practice followed by Independent Practice- NCERT questions to be

discussed in the classroom.

Techniques to be used:
1. Quiz
2. Daily Practice Problem
3. MCQ
4. Peer Assessment
5. Case Studies

Resources Text Book:

 NCERT text book
E-resources
 PPT
 YouTube
 Videos
Self-Study, Home Work, Independent Practice: Students would do some questions from NCERT in
Assignments their HW notebooks and later try to solve the questions asked in the
previous year question papers and also the question given in the sample
papers
This would enable them to prepare for the board exam level of questions
and test their mental skills
It is also advised that the students come to the class with proper background
knowledge of the topic under discussion. They can refer to the resources
stated above.
Addressing Classroom Due to various social backgrounds and multiple intelligences, the classroom
Diversity might be a diverse arena. The following techniques can be used for various
groups:

For gifted students:

 Encouragement for referring other resources
 Using NCERT and other relevant web sites for preparation material

For weak students:

 Buddy help to be provided
 Provide grade-up classes
 Adopt an easy to difficult method of concept learning

For differently abled students:

 Ignore spelling mistakes
 Call parents at regular intervals
 Care for them on one to one basis
 Provide grade-up classes
Measuring Attainment Of
Learning Objectives Low Order Thinking Skills Questions
Q Enumerate three important decisions taken in financial
management.
Q What is the link between operating cycle and working capital?
Q How do growth opportunities affect dividend decision?
Q What is financial risk?
Q Give the factors affecting financing decision?
Q Give the factors affecting dividend decision?
Q Give the factors affecting choice of capital structure?
Q Give the factors affecting working capital decisions?
Q What is financial planning?
Q Give the objectives of financial planning?
Q What is the importance of financial planning?
Q What are the objectives of financial management?
Q What is wealth maximization concept?
Q What is financial leverage?
Q What is trading on equity?

High order thinking skills based question

Q Why debt is considered cheaper than equity?

Q What is the cost of raising funds called?
Q What determines the overall financial risk?
Q What is meant by working capital how is it calculated? Discuss
five important determinants of working capital requirements?
Q A capital budgeting decision is capable of changing the financial
fortune of a business. Do you agree why or why not?
Q Name the concept of financial management that enables to
foresee the fund requirements both in terms of the quantum and
 timings?
Q The return on investment of a company ranges between 10 to
12% for the past 3 years. To finance its future fixed capital
needs it has the following options for borrowing the debt
o Option a rate of interest 9%
o Option b rate of interest 13%
Which source of debt option a or option b is better give reasons
in support of your answer also state the concept being used in
taking the decision?
 HOME ASSINGMENT
Q1. Explain the objectives of Financial Planning.

Q2. What is meant by ‘Financial Management’? State the primary objective of Financial
Management.

Q3. Determining the relative proportion of various types of funds depends upon various factors.
Explain any six such factors.

Q4. Explain any six factors affecting the decision that determines the amount of profit earned to
be distributed and to be retained in the business.

Q5. “Sound Financial Planning is essential for the success of any enterprise.” Explain this
statement by giving any six reasons.

Q6. Explain the three major decisions every manager has to take while performing the finance
function.

Q7. Give the meaning of Financial Management. State its main objective.

Q8. State any three points of importance of financial planning.

Q9. “Determining the overall cost of capital and the financial risk of the enterprise depends upon
various factors”. Explain any six such factors.

Q10. You are a Finance Manager of a newly established manufacturing company. Explain any six
factors that you will consider while determining the fixed capital requirement for the
company. In the paint industry, various raw materials are mixed in different proportions with
petroleum for manufacturing different kinds of paints. One specific raw material is not readily
and regularly available to the paint manufacturing companies. Bowler Paints Company is also
facing this problem and because of this there is a time lag between placing the order and the
actual receipt of the material. But, once it receives the raw materials, it takes less time in
converting it into finished goods. Identify the factor affecting the working capital
requirements of this industry.

Q11. Explain briefly any four factors affecting the fixed capital requirements of an organisation.

Q12. What is meant by ‘Capital Structure’?

Q13. Ramanath [Link] dealing in import of organic food items in bulk. The company sells the items
in smaller quantities in attractive packages. Performance of the company has been up to the
expectations in the past. Keeping up with the latest packaging technology, the company
decided to upgrade its machinery. For this, the Finance Manager of the company, Mr. Vikrant
Dhull, estimated the amount of funds required and the timings. This will help the company in
linking the investment and the financing decisions on a continuous basis. Therefore, Mr.
Vikrant Dhull began with the preparation of a sales forecast for the next four years. He also
collected the relevant data about the profit estimates in the coming years. By doing this, he
 wanted to be sure about the availability of funds from the internal sources. For the remaining
funds he is trying to find out alternative sources.
a. Identify the financial concept discussed in the above paragraph. Also state any two
points of importance of the financial concept, so identified.

Q14. Explain briefly any four factors that affect the working capital requirements of a company.

Q15. Explain briefly any four factors that affect the fixed capital requirements of a company.

Q16. Explain briefly any four factors that affect the choice of capital structure of a company.
 Worksheet
What is finance?

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Explain Financial Management

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Role and Importance of Financial Management

All items in the financial statements (Balance Sheet and P/L Account) of a business are directly or
indirectly affected by the financial management decisions, some of them are given below:

1. _________________________________________________________________________
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2. _________________________________________________________________________
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3. _________________________________________________________________________
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4. _________________________________________________________________________
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5. _________________________________________________________________________
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Objectives of financial management

1. Profit maximization-
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2. Wealth maximization –
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The financial management focuses on three major financial decision areas namely
_________________, _______________ and ___________________.

They are collectively known as the ___________________________________________

Finance Functions

1. _____________________ Decision
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It will include the following:
a. _____________________________________________________________________
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b. _____________________________________________________________________
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Factors affecting Capital Budgeting (Investment Decision)

A. ___________________________________________________________________
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B. ___________________________________________________________________
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2. __________________ Decision
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Factors affecting financing decision

 1. _________________________________________________________________________
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2. _________________________________________________________________________
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3. _________________________________________________________________________
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4. _________________________________________________________________________
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5. _________________________________________________________________________
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6. _________________________________________________________________________
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7. _________________________________________________________________________
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3. ___________________ Decision
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Factors affecting dividend decision

1. _________________________________________________________________________
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2. _________________________________________________________________________
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3. _________________________________________________________________________
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4. _________________________________________________________________________
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5. _________________________________________________________________________
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6. _________________________________________________________________________
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 7. _________________________________________________________________________
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8. _________________________________________________________________________
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9. _________________________________________________________________________
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10. _________________________________________________________________________
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11. _________________________________________________________________________
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4. Financial Planning –
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It involves the following aspects:

a. _________________________________________________________________________
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b. _________________________________________________________________________
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c. _________________________________________________________________________
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Types of financial planning

a. _________________________________________________________________________
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b. _________________________________________________________________________
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Objectives of Financial Planning

1. _________________________________________________________________________
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2. _________________________________________________________________________
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Importance of financial planning
1. _________________________________________________________________________
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2. _________________________________________________________________________
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3. _________________________________________________________________________
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4. _________________________________________________________________________
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5. _________________________________________________________________________
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Capital Structure
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The capital structure of a company consists any of the following forms:

1. __________________________________________________________________
2. __________________________________________________________________
3. __________________________________________________________________
4. __________________________________________________________________
5. __________________________________________________________________

Financial Leverage –
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As the financial leverage increases (highly geared) the cost of funds

_______________________ and therefore more earnings per share, but the financial risks
increases.

Trading on equity
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Q- A company raises Rs.50,000 through equity shares and earns a profit of Rs.5000. Here the rate
of return is 10%. On the other hand, if the company raises Rs.40000 by way of 6% debentures and
Rs.10000 through equity shares, the rate of return to equity shareholders is increased to 26% as
follows:

Total Investment ____________________________________________________________

Total Profit ________________________________________________________________
Interest on debentures _______________________________________________________
Balance of Profit to equity shareholders _________________________________________
Rate of return on equity share capital ___________________________________________

Factors Affecting the Choice of Capital Structure

1. _________________________________________________________________________
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2. _________________________________________________________________________
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3. _________________________________________________________________________
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4. _________________________________________________________________________
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5. _________________________________________________________________________
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6. _________________________________________________________________________
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7. _________________________________________________________________________
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8. _________________________________________________________________________
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9. _________________________________________________________________________
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10. _________________________________________________________________________
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11. _________________________________________________________________________
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 12. _________________________________________________________________________
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13. _________________________________________________________________________
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14. _________________________________________________________________________
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Fixed Capital and Working Capital

Fixed Capital
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Management of fixed capital

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Importance of management of fixed capital

1. Long term growth –
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2. Large amount of funds involved –

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3. Irreversible decision –
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4. _________________________________________________________________________
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Factors affecting the requirement of fixed capital

 1. Nature of Business –
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2. _________________________________________________________________________
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3. _________________________________________________________________________
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4. _________________________________________________________________________
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5. _________________________________________________________________________
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6. _________________________________________________________________________
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7. _________________________________________________________________________
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8. _________________________________________________________________________
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Working Capital
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There are two concepts of defining working capital as follows:-

i. Gross working capital

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ii. Net working capital

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Factors affecting Working Capital Requirements

1. _________________________________________________________________________
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2. _________________________________________________________________________
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3. _________________________________________________________________________
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4. _________________________________________________________________________
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5. _________________________________________________________________________
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6. _________________________________________________________________________
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