FINANCIAL MANAGEMENT NOTES

FINANCIAL MANAGEMENT NOTES

Click on the link to get the financial management notes chapter-wise:

TIME VALUE OF MONEY

SOURCES OF FINANCE

COST OF CAPITAL

LEVERAGES

CAPITAL STRUCTURE

WORKING CAPITAL MANAGEMENT

BANK FINANCING

CAPITAL EXPENDITURE DECISIONS

DIVIDEND DECISIONS

Time Value of Money: Compounding and Discounting techniques–Concepts of Annuity and
Perpetuity. Risk–return relationship
Sources of Finance and Cost of Capital–Different sources of finance; long term and Short
term sources
Cost of capital: concept, relevance of cost of capital, specific costs and weighted average cost,
rationale of after tax weighted average cost of capital, marginal cost of capital


Leverage and Capital Structure Theories–Leverage–Business Risk and Financial Risk– Operating and financial leverage, Trading on Equity
Capital Structure Decisions –Capital structure patterns, Designing optimum capital structure,
Constraints, Various capital structure theories.


Working Capital Management –Introduction; Meaning and Concept of Working Capital;
Management of Working Capital and Issues in Working Capital; Estimating Working Capital
Needs; Operating or Working Capital Cycle. Various sources of finance to meet working capital
requirements Financing current assets: Strategies of financing (Matching, Conservative, and
Aggressive policies)
Bank financing: recommendations of Tandon committee and Chore committee Management of
components of working capital (an introduction only)

Capital Expenditure Decisions:
Purpose, Objectives & Process, Understanding different types of projects, Techniques of
Decision making. Methods of Capital Budgeting – Traditional and Modern (Elementary Level).
Dividend Decisions–Meaning, Nature and Types of Dividend Some dividend policies and
formulating a dividend policy . Dividend Theories: Walter’s Model, Gordon’s Model,
Modigliani and Miller: Irrelevancy Theory (Introductory Level)

FINANCIAL MANAGEMENT NOTES
FINANCIAL MANAGEMENT NOTES