C 421 WORKING CAPITAL MANAGEMENT

Unit I: Concept, Importance and kinds of working Capital, Factors Determining Working Capital,
Estimating the requirements of Working Capital, Management of Cash – Motives for Holding cash
and marketable securities, Cashless System, Managing the Cash Flows, Types of Collection Systems,
Cash concentration Strategies, Disbursement Tools, Investment in Marketable Securities; Forecasting
Cash Flows.
Unit II: Managing Corporate Liquidity and financial Flexibility, Measures of Liquidity, Determining
the Optimum Level of Cash Balance, Baumol’s Model, Miller-orr Model, Receivables Management,
Determining the optimum receivable Policy, Marginal Analysis, Credit analysis.
Unit III: Inventory Management-kinds of Inventories, reasons and benefits, Costs of maintaining
Inventory, Inventory Management techniques, ABC EOQ, Just in Time, Risks in Inventory
Management.
Unit IV: Financing of Working Capital, Integrating working Capital and Capital Investment
Processes, Money Market in India, Banking system in India, Working capital Control and Banking
Policy in India, Instruments of Indian and International Money Market, Managing Short-term
International transactions.

SC 422 FINANCIAL DECISIONS AND ANALYSIS

Unit I: Concepts in valuation, market risk and return, valuation and management of bonds , shares
and their valuation, portfolio theory , Portfolio theory, asset pricing models, valuation- methods- free
cash flow approach to equity and firm valuation
Unit II: Investment in assets and Required Returns: Principle of Capital Investment/Capital Rationing
Inflation and Budgeting, Risk and real options in capital budgeting Creating value through required
returns.
Unit III: Financing policies: Theory of Capital Structure, Making Capital Structure Decision, long
term- financing, lease financing, issuing securities, fixed – income financing, Hybrid financing,
financing through private equity and venture capital
Unit IV: Dividend Policies and signaling, stock dividend and share repurchase, effect of stock
dividend, splits on shareholders’ equity, capital market financing and risk management.
Expansion and contraction: mergers for corporate control Legal, and procedural aspects of merger
decision; Takeover code; goodwill and valuation of shares; accounting treatment in pooling and
purchase method, Determination of Exchange ratio, Corporate and distress restructuring.

SE 422 (SE 442) INTERNATIONAL FINANCIAL MANAGEMENT

UNIT I: Overview of International financial system, monetary system, balance of payments and
international economic linkages, Nature of foreign exchange market, exchange rates, Spot and
forward rates, reasons for difference between spot and forward rates, Economic, transaction and
translation exposure,
UNIT II: Micro factors governing exchange rate behavior- law of one price, Purchasing power parity,
interest rate parity, International fisher effect, Currency risk management alternatives - natural and
operating hedge,
Currency market hedges – forward contract, futures contract, currency options, currency swaps
UNIT III: International portfolio investment, factors affecting cash flows in capital budgeting
decisions,
Risk reduction through diversification, corporate strategy and FDI, International financing, Borrowing
alternatives, foreign subsidiary capital structure and financing of foreign affiliates, short term
financing strategy and financing options
UNIT IV: Structuring International trade transactions- draft, bill of lading, Letter of credit, counter
trading, factoring, forfeiting, Cash management practices- bilateral and multilateral netting,
International Tax planning, transfer pricing