Management- FINANCIAL MANAGEMENT Sources of Financing, Concept in Valuation, Capital Structure, Cost of Capital,

1. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Affiliated Institution of G.G.S.IP.U, Delhi
FINANCIAL
MANAGEMENT
BBA – 309

2. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
OBJECTIVE OF THE SUBJECT
Every decision that a business makes has
financial implications and any decision that
affects the finances of a business is a
corporate finance decision. The subject aims
at giving you the big picture of corporate
finance so that you can understand the
importance of Finance in every sphere of life.

3. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Unit I
• Financial Management: Meaning, Scope, Objectives of
Financial Management, Profit Vs. Wealth Maximization.
Financial Management and other Areas of Management,
Liquidity Vs Profitability, Methods of Financial Management,
Organization of Finance Function.
• Sources of Financing: Classification of Sources of Finance,
Security Financing, Loan Financing, Project Financing, Loan
Syndication- Book Building, New Financial Institutions and
Instruments(in brief)viz. Depositories, Factoring, Venture
Capital, Credit Rating, Commercial Paper, Certificate of
Deposit, Stock Invest, Global Depository Receipts.
• Concept in Valuation: Time Value of Money, Valuation
Concepts, Valuation of Securities viz., Debentures, Preference
shares and Equity Shares.
BBA – 309 FINANCIAL MANAGEMENT

4. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Unit II
• Capital Structure: Meaning, Capital Structure and
Financial Structure, Patterns of Capital Structure,
Optimum Capital Structure, Capital Structure Theories,
Factors Determining Capital Structure, Capital Structure
Practices in India.
• Cost of Capital: Concept, Importance, Classification and
Determination of Cost of Capital.
• Leverages: Concept, Types of leverages and their
significance.
BBA – 309 FINANCIAL MANAGEMENT

5. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Unit III
• Capital Budgeting: Concept, Importance and Appraisal Methods: Pay Back
Period, DCF Techniques, Accounting Rate of Return,
• Capital Rationing : Concept of Risk, Incorporation of Risk Factor, General
Techniques: Risk Adjusted Discount Return, Certainty Equivalent
Coefficient and Quantitative Techniques: Sensitivity Analysis, Probability
assignment, Standard Deviation, Coefficient of Variation, Decision Tree.
Unit IV
• Working Capital Management: Operating cycle, Working Capital
Estimation, Concept, Management of Cash, Inventory Management,
Management of Accounts Receivable and Accounts Payable, Over and
Under Trading.
• Dividend, Bonus and Rights: Dividend Policy, Relevance and Irrelevance
Concepts of Dividend, Corporate Dividend Practices in India.

6. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
UNIT 1 - OUTLINE
• Meaning of Financial Management
• Goals of Financial Management
• Types of Financial Management Decisions
• Sources of Finance
• Time Value Of Money

7. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
FINANCIAL MANAGEMENT
• Traditionally Financial Management was
concerned with raising of funds only.
• But now-a-days, Financial Management is
concerned with procurement as well as
utilization of funds for achieving
organisational goals.

8. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
GOALS OF FINANCIAL
MANAGEMENT
• PROFIT MAXIMISATION : It measures the
performance of a firm by looking at its total
profit, which is absurd.
• WEALTH MAXIMISATION : The objective of
maximisation of shareholders wealth
considers all future cash flows, dividends, EPS,
risk of a decision etc.

9. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
DECISIONS IN FINANCIAL
MANAGEMENT
• Quantum of Finance
• Sources of Finance
FINANCING
DECISION
• Capital Budgeting Decision
• Working Capital Decision
INVESTMENT
DECISION
• Pay Dividends or
• Retain the earnings
DIVIDEND
DECISION

10. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
SOURCES OF FINANCE

11. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
TIME VALUE OF MONEY
• The idea that money available at the
present time is worth more than the
same amount in the future due to its
potential earning capacity.
• This core principle of finance holds that,
provided money can earn interest, any
amount of money is worth more the
sooner it is received.

12. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
THANK
YOU