INTRODUCTION TO FINANCE

IIPM CHENNAI

FOR UGP/ 2010-13

BY

CA. R.S.SIVARAMANM.Sc; M.Com; ACA; DISA(ICAI);PGDCA;MIMA

CHARTERED ACCOUNTANT

INTRODUCTION TO FINANCECredits: 02 (24 hours)1. INTRODUCTION TO FINANCIAL MANAGEMENT(2 HRS)Role of finance, financial planning and financial management in an organizationDifference between financial planning and financial managementObjective of financial managementFunctions of financial management – financing decisions, investment decisions and

dividend decisions2. TIME VALUE OF MONEY(2 HRS)Concept of time value of money ,Time value for annuities , Present value of a given cash

flow, Concept of Net Present Value3. FINANCIAL STATEMENT ANALYSIS(10 HRS)Uses of Financial Analysis, Nature of Ratio Analysis,Liquidity Ratios, Leverage Ratios, Activity Ratios, Profitability Ratios, Evaluation of a

Firm's Earning PowerComparative Statements Analysis, Trend Analysis, Inter-firm Analysis, Utility of Ratio

Analysis -Cautions in using Ratio Analysis4. CAPITAL BUDGETING(4 HRS)Nature of Investment Decisions , Investment Evaluation Criteria , Net Present Value

Method , Internal rate of Return MethodProfitability Index, Payback Period method5. COST OF CAPITAL AND CAPITAL STRUCTURE(6 HRS)Sources of financing , Short term vs. long term financing options ,Calculation of cost of

capitalDebt vs equity and determinants of capital structure ,Modgliani Miller hypothesis on

capital structure and valuation (basic introduction)