Tribhuvan University
Faculty of Management
Office of the Dean
Bachelor of Business Management (BBM)
Course Description
:This course is a core course in finance and includes the basic area of financial management functions. It consists of introduction to financial management, analysis of financial statements, risk, return and portfolio th eory, financial planning and forecasting, capital structure and leverage, current assets management, and distributions to shareholders. Course Detail This course contains fundamental understanding of law, sources of business law, general law of contract, specific contracts, law of company and insolvency, legal and regulatory compliance, disputes settlement systems Learning strategies At least one case will be administered at the end of each chapter. The students will also prepare a project report from public media on legal issue of business,term paper and seminar work on the legal and compliance issuesand other assignments as specified by faculty member.
Course Objective
:The aim of this course is to familiarize students with concepts and principles of financial management. This course has been structured as a compulsory course in finance. This course equips students with fundamental tools and techniques of financial management to prepare them to tackle the financial issues of business firms. This course aims to enhancethe students’ understanding ofcomposite insights onlegal environment of business required for effective management of business operations.
Course Contents:
Lecture hours show the approximate classroom time allocated to each unit.
Unit 1.Introduction
- Concept and scope of financial management
- Financial management decisions
- Financial manager’s responsibility
- Forms of organizations
- The agency problem
- B usiness ethics and social responsibility
- Financial innovations
Unit 2.Financial Planning and Forecasting
- Concept of financial planning and forecasting
- Strategic plan
- O perating plan
- Financial plan, Sales forecast
- The a dditional fund needed formula
- Excess capital adjustments
- Forecasted financial statement: forecasted income statement and balance sheet
- Using regression to improve forecast
Unit 3.Capital Budgeting
- Concept of capital budgeting decision
- Capital budgeting decision process
- Types of capital budgeting projects
- Estimation of cash flows, Capital budgeting decision techniques: payback period, discounted payback period, net present value, profitability index, internal rate of return, modified internal rate of return
- merits and limitations of each capital budgeting decision technique, Replacement decision
- Evaluation of projects with unequal lives
Unit 4.Risk, Return and the Portfolio Theory
- Concept and measurement of return and risk, Measurement of rate of return: expected and average rate of return
- Measu rement of risk: variance, standard deviation and coefficient of variations: M easurement of risk an d return in portfolio context
- R isk diversification
- Minimum variance portfolio
- Efficient portfolio
- O ptimal portfolio
- Capital assets pricing model (CAPM)
Unit 5.Capital Structure and leverage
- Concept of capital structure
- Capital structure issues
- Estimating the optimal capital structure
- Factors affecting capital structure
- Business risk and financial risk
- Leverage: operating and financial leverage
- Degree of ope rating and financial leverage
- Combining operating and financial leverage, Impact of financial leverage
- Indifference charts
- Breakeven analysis: operating, cash and financial BEP
Unit 6.Current Assets Management
- Concept of current assets management. Cash management: significance of cash management, motives of holding cash, importance of maintaining adequate cash
- Inventory management: significance of inventory management, objectives of holding inventories, inventory management techniques, inventory control system
- Receivable management: significance of receivable management, cost of maintain receivable s, elements of credit policy, evaluating proposed changes in credit policy
Unit 7.Dividend policy
Nature and types of dividend policy, Dividend versus capital gain ; Dividend
Unit 8.Multinational Financial Management
- Nature of multinational corporations
- Reasons for companies going global
- Multinational versus domestic financial management
- Exchange rates quotations
- Cross rates
- Interbank foreign currency quotations
- Trading in foreign exchange rates: spot rates and forward rates
- Interest rate parity
- Purchasing power parity
References:
dividend policy; Stock dividends and stock splits: stock split, stock dividend, effect on stock price, Stock repurchase. Brigham, E. F. & Houston, J. F. Fundamentals of financial management . Delhi: Cengage Learning. Ross, S. A., Westerfield, R. W. & Jordan, B. D. Fundamentals of corporate finance . New York: McGraw-Hill Irwin. Van Horne, J. C., Wachowicz, J. R. & Bhaduri, S. N. Fundamentals of financial management. New Delhi: Prentice-Hall India Ltd. MGT 234 Legal Environment for Business in Nepal BBM 4th Semester Credits: 3 Lecture Hours: 48 Albuquerque, Daniel (2013) Legal Aspects of Business (Texts, Jurisprudence and Cases), Oxford University Press, New Delhi, India. Kalika, S. N.(2023), Legal Environment ofBusiness(for BBA), Buddha Publications, Kathmandu. Shukla, M.C.(2010), Mercantile Law, S. Chand& Company Ltd, New Delhi. MulukiCivil Code,2074, Law Book ManagementCommittee, Kathmandu. Companies Act,2063, LawBookManagementCommittee, Kathmandu. Insolvency Act, 2063, LawBookManagementCommittee, Kathmandu. Nepalese Acts and Regulations (CurrentActs relating to Intellectual Property Rights; Right to Information; Cyber Law; Consumer Protection; and Environment Protection, andConstitution of Nepal,etc.).