Financial Management

Financial Management

I.              The Role, Objective and Scope of Financial Management

1.       Introduction

2.       The Goal of Shareholder Wealth Maximization

3.       Forms of Business Organization

4.       Organization structure and finance function

5.       Relationship of finance with other disciplines

6.       Corporate governance and the goal of the firm

7.       Important Business Trends

8.       Ethical Issues: The Practice of Financial Management

II.             Evaluation of Financial Performance

1.     Introduction

2.     Uses of Financial Analysis

3.     Key Financial Statements 

4.     Interpreting Financial Ratios 

5.     Basic Classifications of Financial Ratios

a.     Liquidity Ratios 

b.    Asset Management Ratios  

c.     Financial Leverage Management Ratios 

d.    Profitability Ratios   

e.     Market-Based Ratios 

f.     Dividend Policy Ratios

g.    Dupont Analysis

h.     Economic value added

6.     Limitations of financial ratio analysis

7.     Trend Analysis

8.     Horizontal and Vertical Analysis

9.     Ethical Issues: The Sarbanes-Oxley Act and the Financial Reporting Process

 

III.              Financial Planning and Forecasting

1.     Introduction

2.     Financial Planning

3.     Cash Flow Analysis

4.     Importance of Cash Flows 

5.     Financial Forecasting    

5.1  Percentage of Sales Forecasting Method

5.2  Computerized Financial Forecasting and Planning Models 

5.3  Using Financial Ratios to Forecast Future Financial Performance

IV.              The Cost of Capital,

1.    Introduction

 2.    Relative Costs of Capital

 3.    Computing the Component Costs of capital

      a. Cost of Debt 

      b. Cost of Preferred Stock     

      c. Cost of Internal Equity

          Capital 

 4.  Determining the Weighted

   5. (Marginal) Cost of Capital


V.              Capital Structure Policy

1.    Defining a firm’s capital structure

2.    Capital Structure Theory

a.     Traditional approach

b.    Modigliani & Miller

c.     Contemporary approach

3.    Capital structure, the cost of equity and the weighted average cost of capital

Managerial decisions in capital structure policy


VI.              Working Capital Policy and Short-term Financing

1.    Introduction

2.    Working Capital Policy

3.    Importance of Working Capital 

4.    Operating Cycle Analysis 

5.    Levels of Working Capital Investment

6.    Profitability Versus Risk Trade-Off for Alternative Levels of Working Capital Investment 

7.   Optimal Level of working capital


VII.              Cash and Marketable Securities Management

1.    Introduction

2.    Operating cycle

3.    Objectives of cash management

4.    Reason for holding cash

5.    Optimal cash balance

6.    Cash Management Techniques

7.    Marketable securities management


VIII.              Receivables and Inventory Management

1.    Objectives of receivables management

2.    Costs associated with investments in accounts receivable

3.    Trade-offs in credit and collection strategies

4.    Credit Policies

5.    Objectives of inventory management

6.    Inventory management techniques


IX.              Dividend Policy

1.     Introduction

2.     Determinants of dividend policy

3.     Dividend policy and firm value

4.     Dividend policies

5.     Stock dividends, stock splits and stock repurchase


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