Financial Management  
Author(s): Dr. T. Srinivasan
Published by Vijay Nicole Imprints Private Limited
Publication Date:  Available in all formats
ISBN: 9789395245838
Pages: 902

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  • Cover
  • Title Page
  • Copyright Page
  • Contents
  • Preface
  • Chapter 1 Financial Management — An Overview
    • Meaning and Definition
    • Objectives of Financial Management
    • Status and Role of Finance Manager
    • Functions of Financial Management
    • Significance of Financial Management
    • Functions of Treasurer and Financial Controller
    • Interface between Finance and Other Domain Functions
    • Approaches to Financial Management
    • Finance Function
    • Objective Type Questions
    • Review Questions
  • Chapter 2 Time Value of Money
    • Reasons for Time Preference
    • Future Value / Compound Value Techniques
    • Present Value / Discounting Value Techniques
    • Illustrations
    • Exercises
    • Objective Type Questions
    • Review Questions
  • Chapter 3 Valuation of Securities
    • Introduction
    • Concept of Value
    • Valuation of Bond / Debenture
    • Valuation of Normal Preference Shares
    • Valuation of Perpetual Preference Shares
    • Valuation of Equity Shares
    • Illustrations
    • Exercises
    • Objective Type Questions
    • Review Questions
  • Chapter 4 Risk and Return
    • Meaning of Return
    • Meaning of Risk
    • Types of Risk
    • Risk and Return Relationship
    • Tools to Measure the Risk
    • Illustrations
    • Exercises
    • Objective Type Questions
    • Review Questions
  • Chapter 5 Capital Budgeting
    • Meaning
    • Definitions
    • Features of Capital Budgeting
    • Objectives of Capital Budgeting
    • Significance of Capital Budgeting
    • Advantages of Capital Budgeting
    • Types of Capital Budgeting Decisions
    • Factors Influencing Capital Budgeting Decisions
    • Capital Budgeting Process
    • Methods of Evaluation of Capital Budgeting Proposals
    • Upgradation of Payback Period
    • Discounted Cash Flow Method (DCF)
    • Accept or Reject Criterion
    • Comparison of NPV, IRR and PI
    • Illustrations
    • Exercises
    • Objective Type Questions
    • Review Questions
  • Chapter 6 Cost of Capital
    • Meaning
    • Definitions of Cost of Capital
    • Components of Cost of Capital
    • Importance of Cost of Capital
    • Factors Influencing Cost of Capital
    • Types of Cost of Capital
    • Computation of Cost of Capital
    • Capital Asset Pricing Model (CAPM)
    • Weighted Average Cost of Capital (WACC)
    • Marginal Cost of Capital
    • Illustrations
    • Exercises
    • Objective Type Questions
    • Review Questions
  • Chapter 7 Financial Planning
    • Meaning
    • Definitions
    • Purpose of Financial Planning
    • Scope of Financial Planning
    • Objectives of Financial Planning
    • Factors to be Considered while Formulating a Financial Plan
    • Characteristics of Financial Planning
    • Essentials of Sound Financial Planning
    • Significance of Financial Planning
    • Limitations of Financial Planning
    • Estimation of Capital Requirements
    • Working Capital
    • Fixed Capital
    • Capitalisation
    • Capital and Capitalisation
    • Over Capitalisation
    • Under Capitalisation
    • Objective Type Questions
    • Review Questions
  • Chapter 8 Capital Structure
    • Meaning
    • Definitions
    • Pattern of Capital Structure
    • Difference between Capital Structure and Financial Structure
    • Difference between Capital Structure and Capitalisation
    • Features of Optimum Capital Structure
    • Factors Governing a Capital Structure
    • Technique of Planning the Capital Structure
    • Theories of Capital Structure
    • Illustrations
    • Exercises
    • Objective Type Questions
    • Review Questions
  • Chapter 9 Leverage
    • Meaning
    • Definitions
    • Types of Leverage
    • Illustrations
    • Exercises
    • Objective Type Questions
    • Review Questions
  • Chapter 10 Sources of Finance
    • Internal and External Sources of Financing
    • Classification of Sources of Financing
    • Types of Sources of Fund
    • Factors Affecting the Choice of Sources of Fund
    • Objective Type Questions
    • Review Questions
  • Chapter 11 Dividend Policy
    • Introduction
    • Major Dimensions of Dividend Policy
    • Meaning of Dividend
    • Rules Relating to Dividend
    • A Snapshot of Different Types of Dividend or Forms of Dividend
    • Source of Dividends
    • Objectives of Dividend Policy
    • Factors Determining / Influencing / Impacting Dividend Policy
    • Types of Dividend Policies
    • Stable Dividend Policy
    • Bonus Shares
    • Stock Split
    • Difference between Bonus Issue and Stock Split
    • Reverse Split
    • Right Issue
    • Dividend Theories
    • Comparison of Walter and Gordon Model
    • Irrelevant Concept of Dividend
    • Illustrations
    • Exercises
    • Objective Type Questions
    • Review Questions
  • Chapter 12 Working Capital Management
    • Current Assets
    • Current Liability
    • A Snapshot of Component of Current Asset and Current Liability
    • Definitions
    • Annual Survey of Industries (1961)
    • Concept of Working Capital
    • Types of Working Capital
    • Need for Working Capital or Objects of Working Capital
    • Significance or Advantages of Working Capital
    • Dangers/Drawbacks of Excessive Working Capital
    • Drawbacks of Inadequate Working Capital
    • Working Capital Management
    • Working Capital Finance Mix
    • Estimating / Forecasting Working Capital Requirements
    • Computation of Working Capital Required
    • Sources of Working Capital
    • Factors Determining Working Capital Requirements
    • Illustrations
    • Exercises
    • Objective Type Questions
    • Review Questions
  • Chapter 13 Cash Management
    • Meaning of Cash
    • Cash Management
    • Motives of Holding Cash
    • Dimensions of Cash Management
    • Benefits of Cash Budget
    • Cash Management Models
    • Illustrations
    • Exercises
    • Objective Type Questions
    • Review Questions
  • Chapter 14 Receivables Management
    • Meaning of Receivables
    • Purpose of Receivables
    • Receivables Management
    • Optimum Size of Receivables
    • Dimensions of Receivables / Aspects of Receivables
    • Control of Receivables
    • Illustrations
    • Exercises
    • Objective Type Questions
    • Review Questions
  • Chapter 15 Inventory Management
    • Introduction
    • Definitions
    • Meaning of the Term ‘Inventory’
    • Need or Purpose of Holding Inventory
    • Benefits of Holding Inventory
    • Risks / Dangers / Cost of Holding Inventory
    • Objectives of Inventory Control
    • Techniques of Inventory Control
    • Illustrations
    • Exercises
    • Objective Type Questions
    • Review Questions
  • Annexure - I Time Value Index Factor Table
  • Annexure - II Glossary
  • Annexure - III University Question Paper of Recent Years
Rating
Table of contents
  • Cover
  • Title Page
  • Copyright Page
  • Contents
  • Preface
  • Chapter 1 Financial Management — An Overview
    • Meaning and Definition
    • Objectives of Financial Management
    • Status and Role of Finance Manager
    • Functions of Financial Management
    • Significance of Financial Management
    • Functions of Treasurer and Financial Controller
    • Interface between Finance and Other Domain Functions
    • Approaches to Financial Management
    • Finance Function
    • Objective Type Questions
    • Review Questions
  • Chapter 2 Time Value of Money
    • Reasons for Time Preference
    • Future Value / Compound Value Techniques
    • Present Value / Discounting Value Techniques
    • Illustrations
    • Exercises
    • Objective Type Questions
    • Review Questions
  • Chapter 3 Valuation of Securities
    • Introduction
    • Concept of Value
    • Valuation of Bond / Debenture
    • Valuation of Normal Preference Shares
    • Valuation of Perpetual Preference Shares
    • Valuation of Equity Shares
    • Illustrations
    • Exercises
    • Objective Type Questions
    • Review Questions
  • Chapter 4 Risk and Return
    • Meaning of Return
    • Meaning of Risk
    • Types of Risk
    • Risk and Return Relationship
    • Tools to Measure the Risk
    • Illustrations
    • Exercises
    • Objective Type Questions
    • Review Questions
  • Chapter 5 Capital Budgeting
    • Meaning
    • Definitions
    • Features of Capital Budgeting
    • Objectives of Capital Budgeting
    • Significance of Capital Budgeting
    • Advantages of Capital Budgeting
    • Types of Capital Budgeting Decisions
    • Factors Influencing Capital Budgeting Decisions
    • Capital Budgeting Process
    • Methods of Evaluation of Capital Budgeting Proposals
    • Upgradation of Payback Period
    • Discounted Cash Flow Method (DCF)
    • Accept or Reject Criterion
    • Comparison of NPV, IRR and PI
    • Illustrations
    • Exercises
    • Objective Type Questions
    • Review Questions
  • Chapter 6 Cost of Capital
    • Meaning
    • Definitions of Cost of Capital
    • Components of Cost of Capital
    • Importance of Cost of Capital
    • Factors Influencing Cost of Capital
    • Types of Cost of Capital
    • Computation of Cost of Capital
    • Capital Asset Pricing Model (CAPM)
    • Weighted Average Cost of Capital (WACC)
    • Marginal Cost of Capital
    • Illustrations
    • Exercises
    • Objective Type Questions
    • Review Questions
  • Chapter 7 Financial Planning
    • Meaning
    • Definitions
    • Purpose of Financial Planning
    • Scope of Financial Planning
    • Objectives of Financial Planning
    • Factors to be Considered while Formulating a Financial Plan
    • Characteristics of Financial Planning
    • Essentials of Sound Financial Planning
    • Significance of Financial Planning
    • Limitations of Financial Planning
    • Estimation of Capital Requirements
    • Working Capital
    • Fixed Capital
    • Capitalisation
    • Capital and Capitalisation
    • Over Capitalisation
    • Under Capitalisation
    • Objective Type Questions
    • Review Questions
  • Chapter 8 Capital Structure
    • Meaning
    • Definitions
    • Pattern of Capital Structure
    • Difference between Capital Structure and Financial Structure
    • Difference between Capital Structure and Capitalisation
    • Features of Optimum Capital Structure
    • Factors Governing a Capital Structure
    • Technique of Planning the Capital Structure
    • Theories of Capital Structure
    • Illustrations
    • Exercises
    • Objective Type Questions
    • Review Questions
  • Chapter 9 Leverage
    • Meaning
    • Definitions
    • Types of Leverage
    • Illustrations
    • Exercises
    • Objective Type Questions
    • Review Questions
  • Chapter 10 Sources of Finance
    • Internal and External Sources of Financing
    • Classification of Sources of Financing
    • Types of Sources of Fund
    • Factors Affecting the Choice of Sources of Fund
    • Objective Type Questions
    • Review Questions
  • Chapter 11 Dividend Policy
    • Introduction
    • Major Dimensions of Dividend Policy
    • Meaning of Dividend
    • Rules Relating to Dividend
    • A Snapshot of Different Types of Dividend or Forms of Dividend
    • Source of Dividends
    • Objectives of Dividend Policy
    • Factors Determining / Influencing / Impacting Dividend Policy
    • Types of Dividend Policies
    • Stable Dividend Policy
    • Bonus Shares
    • Stock Split
    • Difference between Bonus Issue and Stock Split
    • Reverse Split
    • Right Issue
    • Dividend Theories
    • Comparison of Walter and Gordon Model
    • Irrelevant Concept of Dividend
    • Illustrations
    • Exercises
    • Objective Type Questions
    • Review Questions
  • Chapter 12 Working Capital Management
    • Current Assets
    • Current Liability
    • A Snapshot of Component of Current Asset and Current Liability
    • Definitions
    • Annual Survey of Industries (1961)
    • Concept of Working Capital
    • Types of Working Capital
    • Need for Working Capital or Objects of Working Capital
    • Significance or Advantages of Working Capital
    • Dangers/Drawbacks of Excessive Working Capital
    • Drawbacks of Inadequate Working Capital
    • Working Capital Management
    • Working Capital Finance Mix
    • Estimating / Forecasting Working Capital Requirements
    • Computation of Working Capital Required
    • Sources of Working Capital
    • Factors Determining Working Capital Requirements
    • Illustrations
    • Exercises
    • Objective Type Questions
    • Review Questions
  • Chapter 13 Cash Management
    • Meaning of Cash
    • Cash Management
    • Motives of Holding Cash
    • Dimensions of Cash Management
    • Benefits of Cash Budget
    • Cash Management Models
    • Illustrations
    • Exercises
    • Objective Type Questions
    • Review Questions
  • Chapter 14 Receivables Management
    • Meaning of Receivables
    • Purpose of Receivables
    • Receivables Management
    • Optimum Size of Receivables
    • Dimensions of Receivables / Aspects of Receivables
    • Control of Receivables
    • Illustrations
    • Exercises
    • Objective Type Questions
    • Review Questions
  • Chapter 15 Inventory Management
    • Introduction
    • Definitions
    • Meaning of the Term ‘Inventory’
    • Need or Purpose of Holding Inventory
    • Benefits of Holding Inventory
    • Risks / Dangers / Cost of Holding Inventory
    • Objectives of Inventory Control
    • Techniques of Inventory Control
    • Illustrations
    • Exercises
    • Objective Type Questions
    • Review Questions
  • Annexure - I Time Value Index Factor Table
  • Annexure - II Glossary
  • Annexure - III University Question Paper of Recent Years
Biographical note
Dr. T. Srinivasan, is Professor of Commerce, Annamalai University, Chidambaram. He had served previously as Deputy Director and also as Public Information Officer in Directorate of Distance Education, Annamalai University. He has more than 25 years of teaching experience both at UG and PG level. He has authored one textbook and edited four books. He has published 51 papers in reputed journals and has presented 30 papers at national and international conferences. He has successfully guided 24 M.Phil and four Ph.D. students. Presently he is guiding six students in their Ph.D. programmes. His areas of specialization are Finance, Accounting and Taxation.
Excerpt

FINANCIAL
MANAGEMENT

FINANCIAL
MANAGEMENT

Dr. T. Srinivasan

Professor of Commerce
Annamalai University
Chidambaram

Vijay Nicole Imprints Private Limited

CHENNAI

Published by

Vijay Nicole Imprints Private Limited

No. 1B, Second Main Road,

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Phone: + 91 - 44 - 4283 7178, 72002 58368, 97898 33533

Email: vni@vijaynicole.co.in Website: www.vijaynicole.co.in

Financial Management

ISBN (Print): 978-93-95245-83-8

ISBN e-PUB: 978-93-95245-85-2

ISBN e-PDF: 978-93-95245-84-5

Copyright © 2023, Vijay Nicole Imprints Private Limited

No part of this publication may be reproduced or distributed in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise or stored in a database or retrieval system without the prior written permission of the publishers and copyright holders. The program listings (if any) may be entered, stored and executed in a computer system, but they may not be reproduced for publication.

Information contained in this work has been obtained by publishers, from sources believed to be reliable. However, neither publishers nor copyright holders guarantee the accuracy or completeness of any information published herein, and neither publishers nor copyright holders shall be responsible for any errors, omissions, or damages arising out of use of this information. This work is published with the understanding that publishers and copyright holders are supplying information but are not attempting to render engineering or other professional services. If such services are required, the assistance of an appropriate professional should be sought.

Laser typeset at: Maven Learning, Chennai – 600 091

Contents

Preface

CHAPTER 1FINANCIAL MANAGEMENT — AN OVERVIEW

Meaning and Definition

Objectives of Financial Management

Status and Role of Finance Manager

Functions of Financial Management

Significance of Financial Management

Functions of Treasurer and Financial Controller

Interface between Finance and Other Domain Functions

Approaches to Financial Management

Finance Function

Objective Type Questions

Review Questions

CHAPTER 2 TIME VALUE OF MONEY

Reasons for Time Preference

Future Value / Compound Value Techniques

Present Value / Discounting Value Techniques

Illustrations

Exercises

Objective Type Questions

Review Questions

CHAPTER 3 VALUATION OF SECURITIES

Introduction

Concept of Value

Valuation of Bond / Debenture

Valuation of Normal Preference Shares

Valuation of Perpetual Preference Shares

Valuation of Equity Shares

Illustrations

Exercises

Objective Type Questions

Review Questions

CHAPTER 4 RISK AND RETURN

Meaning of Return

Meaning of Risk

Types of Risk

Risk and Return Relationship

Tools to Measure the Risk

Illustrations

Exercises

Objective Type Questions

Review Questions

CHAPTER 5 CAPITAL BUDGETING

Meaning

Definitions

Features of Capital Budgeting

Objectives of Capital Budgeting

Significance of Capital Budgeting

Advantages of Capital Budgeting

Types of Capital Budgeting Decisions

Factors Influencing Capital Budgeting Decisions

Capital Budgeting Process

Methods of Evaluation of Capital Budgeting Proposals

Upgradation of Payback Period

Discounted Cash Flow Method (DCF)

Accept or Reject Criterion

Comparison of NPV, IRR and PI

Illustrations

Exercises

Objective Type Questions

Review Questions

CHAPTER 6 COST OF CAPITAL

Meaning

Definitions of Cost of Capital

Components of Cost of Capital

Importance of Cost of Capital

Factors Influencing Cost of Capital

Types of Cost of Capital

Computation of Cost of Capital

Capital Asset Pricing Model (CAPM)

Weighted Average Cost of Capital (WACC)

Marginal Cost of Capital

Illustrations

Exercises

Objective Type Questions

Review Questions

CHAPTER 7 FINANCIAL PLANNING

Meaning

Definitions

Purpose of Financial Planning

Scope of Financial Planning

Objectives of Financial Planning

Factors to be Considered while Formulating a Financial Plan

Characteristics of Financial Planning

Essentials of Sound Financial Planning

Significance of Financial Planning

Limitations of Financial Planning

Estimation of Capital Requirements

Working Capital

Fixed Capital

Capitalisation

Capital and Capitalisation

Over Capitalisation

Under Capitalisation

Objective Type Questions

Review Questions

CHAPTER 8 CAPITAL STRUCTURE

Meaning

Definitions

Pattern of Capital Structure

Difference between Capital Structure and Financial Structure

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