FINANCIAL, TREASURY AND FOREX MANAGEMENT

1 PROFESSIONAL PROGRAMME. financial , TREASURY AND FOREX MANAGEMENT . STUDY I. NATURE AND SCOPE OF financial MANAGEMENT . Nature, Significance and scope of financial MANAGEMENT Investment Decisions Financing Decisions Dividend Decisions Decision Criteria Objectives of financial MANAGEMENT Profit maximisation versus Shareholder Wealth Maximisation Economic Value Added Value of Firm Risk and Return Liquidity Profitability Costing and Risk financial Distress and Insolvency financial MANAGEMENT as Science or Art Functions of financial Executives financial Sector Role and Functions financial Sector Reforms in India Background financial Sector Reforms in India Philosophy

2 And Strategy Salient Features of financial Sector Reforms in India financial Sector Reforms Present Scenario General Status of Economy financial Sector Reforms Some Criticisms financial MANAGEMENT A New Look SELF-TEST QUESTIONS. STUDY II. CAPITAL BUDGETING DECISIONS. Capital Budgeting A Concept Need for Capital Investment Investment Decisions MANAGEMENT Perspective Importance of Capital Budgeting Factors Influencing Investment Decision Rationale of Capital Budgeting Decisions Kinds of Capital Budgeting Decisions 36 PP-FTFM-2. Planning of Capital Expenditure Capital Expenditure Control Capital Rationing Capital Budgeting Process Investment Criteria The Payback Method The Average Accounting Rate of Return Method Discounted Cash Flow Method Net Present Value Method Internal Rate of Return Profitability Index Comparison of Net Present Value and Internal Rate of Return Approach Points of Differences Points of Similarities Choice of Methods Sensitivity Analysis Simulation for Risk Evaluation Linear Programming and Capital Budgeting Decisions Application of Linear

3 Programming Model Primal Dual Problems Cost of Capital and its Implications in Budgeting Decisions Capital and Cost of Capital Composite Cost of Capital Implications in Budgeting Decisions SELF-TEST QUESTIONS. STUDY III. CAPITAL STRUCTURE. Meaning of Capital Structure Significance of Capital Structure Factors Influencing Capital Structure Capital Structure vis-a-vis financial Structure Planning and Designing of Capital Structure Optimal Capital Structure Determinants of Capital Structure Capital Structure and Valuation Capital Structure Theories Net Income Approach Net Operating Income Approach Modigliani Miller Approach Leverage 37 PP-FTFM-2.

4 EBIT- EPS Analysis Cost of Capital Factors determining Cost of Capital Cost of Debt Cost of Preference Share Capital Cost of Equity Capital Cost of Dividends Cost of Retained Earnings Combined Cost of Capital Weighted Average Cost of Capital Marginal Cost of Capital SELF-TEST QUESTIONS. STUDY IV. SOURCES OF FINANCE. Introduction Equity Shares Preference Shares Safeguards for the Preference Shareholders Rights Issue Debentures and Bonds Importance of Debentures Company Deposits Benefits to the Depositors Secured Premium Notes Sweat Equity Shares Tracking Stock Mortgage backed Securities GDR/FCCBs Term Loan from financial Institutions and Banks IFCI Ltd.

5 ICICI. IIBI. SIDBI. Internal Funds as Source of Finance Dividend Policy and Retention of Profits Bonus Shares Deferred Payment Arrangements International Finance and Syndication of Loans International financial Market Syndicated Eurocurrency Loans Finance from Foreign Sources 38 PP-FTFM-2. International Finance Corporation (IFC). International Bank for Reconstruction and Development (IBRD). International Development Association (IDA). International Monetary Fund (IMF). Asian Development Bank (ADB). India's Commercial Borrowings Corporate Taxation and the impact on Corporate Financing Financing Cost Escalation SELF-TEST QUESTIONS.

6 STUDY V. DIVIDEND POLICY. Introduction Forms of Dividend Different Types of Dividend Policies Stable Dividend Policy Theory Residual Theory of Dividend Policy Relevance of Dividend Walter Formula Dividend Growth Model Irrelevance of Dividend Marginal Analysis and Residuary Theory Determinants of Dividend Policy Recommendation as a Finance Manager Legal Aspects of Dividends Transfer of Unpaid/Unclaimed Dividend to Investor Education and Protection Fund Corporate Dividend Practices in India SELF-TEST QUESTIONS. STUDY IV. WORKING CAPITAL MANAGEMENT AND CONTROL.

7 The Basic Concept Theoretical Description of Working Capital Determinants of Working Capital Current Assets and Fixed Assets Financing Operating Cycle Concept and Application of Quantitative Techniques Quantitative Techniques for Forecasting Working Capital Needs Techniques for Allocation of Working Capital Financing of Working Capital Working Capital A Policy Decision 39 PP-FTFM-2. Control of Working Capital Working Capital Leverage Techniques for Control of Working Capital Fund Flow Statements Ratio Analysis Banking Norms and Macro Aspect of Working Capital MANAGEMENT Chore Committee Report Marathe Committee Report Kannan Committee Report Cash MANAGEMENT Motives for Holding Cash Components of Cash and Bank Balances Bank Balances Nature of Bank Balances Strategy for effective Cash MANAGEMENT Inventory MANAGEMENT Extent and Quantum of Inventory MANAGEMENT Valuation of Inventory Strategy for Inventory MANAGEMENT ABC

8 Analysis Managing the Inventory Level Receivables MANAGEMENT How do firms ensure realisations? Desirable Level of receivables Other issues involved in MANAGEMENT of working capital SELF-TEST QUESTIONS. STUDY VII. SECURITY ANALYSIS AND PORTFOLIO MANAGEMENT . The Concept of Security Analysis What is Investment? What are Securities? Nature of financial System Security Analysis and Portfolio MANAGEMENT Fundamental Analysis Analysis of the Economy Industry Level Analysis Technical Analysis Pattern Created by Charts Portfolio MANAGEMENT Portfolio Analysis Risk in Investment Situation Markowitz Model Limitations of Markowitz Model 40 PP-FTFM-2.

9 Sharpe Index Model Capital Asset Pricing Model SELF TEST QUESTIONS. STUDY VIII. financial SERVICES. Evolution Process of financial Services Industry Role of Service Sector in Economic Development The Place of financial Services Sector Evolution of financial Services Sector Anatomy of financial Services Sector Regulation and the financial Services Sector Merchant Banker Mutual Funds Venture Capital Loan Syndication Credit Rating Credit Rating Information Services of India Ltd. Investment Information and Credit Rating Agency of India Ltd. Credit Analysis and Research Ltd.

10 Fitch India Factoring Services Leases and Hire Purchase Real Estate Financing Securitization of Mortgages Depository System in India Depository System An Overview Models of Depository Benefit of Depository System SELF-TEST QUESTIONS. STUDY IX. PROJECT PLANNING AND CONTROL. Project Planning Preparation of Project Report Format of Project Report Aspects of Project Appraisal Project Appraisal under normal inflationary and deflationary conditions Project Appraisal by financial Institutions General Approach to Appraisal Technical Aspects of Project Appraisal financial Aspects of Project Appraisal 41 PP-FTFM-2.