Ppt's Of D Book Fundamentals Of Financial Mgmt Download

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I am uploading ppts on all the Chapters of Financial Management of the book named "Fundamentals of Financial Management"...

I am also describing here in Brief about the topic that is been covered in each of the PPTs...

Hope it helps you out...

Chapter 1 The Role of Financial Management

• Explain why the role of the financial manager today is so important.
• Describe “financial management” in terms of the three major decision areas that confront the financial manager.
• Identify the goal of the firm and understand why shareholders’ wealth maximization is preferred over other goals.
• Understand the potential problems arising when management of the corporation and ownership are separated (i.e., agency problems).
• Demonstrate an understanding of corporate governance.
• Discuss the issues underlying social responsibility of the firm.
• Understand the basic responsibilities of financial managers and the differences between a “treasurer” and a “controller.”

Chapter 2: The Business, Tax, and Financial Environments

• Describe the four basic forms of business organization in the United States – and the advantages and disadvantages of each.
• Understand how to find a corporation’s taxable income and how to determine the corporate tax rate – both average and marginal.
• Understand various methods of depreciation.
• Explain why acquiring assets through the use of debt financing offers a tax advantage over both common and preferred stock financing.
• Describe the purpose and makeup of financial markets.
• Demonstrate an understanding of how letter ratings of the major rating agencies help you to judge a security’s default risk.
• Understand what is meant by the “term structure of interest rates” and relate it to a “yield curve.”

Chapter 3: The Time Value of Money

• Understand what is meant by “the time value of money.”
• Understand the relationship between present and future value.
• Describe how the interest rate can be used to adjust the value of cash �ows – both forward and backward – to a single point in time.
• Calculate both the future and present value of: (a) an amount invested today; (b) a stream of equal cash flows (an annuity); and (c) a stream of mixed cash flows.
• Distinguish between an “ordinary annuity” and an “annuity due.”
• Use interest factor tables and understand how they provide a shortcut to calculating present and future values.
• Use interest factor tables to find an unknown interest rate or growth rate when the number of time periods and future and present values are known.
• Build an “amortization schedule” for an installment-style loan.

Chapter 4: The Valuation of Long-Term Securities

• Distinguish among the various terms used to express value, including liquidation value, going-concern value, book value, market value, and intrinsic value.
• Value bonds, preferred stocks, and common stocks.
• Calculate the rates of return (or yields) of different types of long-term securities.
• List and explain a number of observations regarding the behavior of bond prices.

Chapter 5: Risk and Return

• Understand the relationship (or “trade-off”) between risk and return.
• Define risk and return and show how to measure them by calculating expected return, standard deviation, and coefficient of variation.
• Discuss the different types of investor attitudes toward risk.
• Explain risk and return in a portfolio context, and distinguish between individual security and portfolio risk.
• Distinguish between avoidable (unsystematic) risk and unavoidable (systematic) risk; and explain how proper diversification can eliminate one of these risks.
• Define and explain the capital-asset pricing model (CAPM), beta, and the characteristic line.
• Calculate a required rate of return using the capital-asset pricing model (CAPM).
• Demonstrate how the Security Market Line (SML) can be used to describe the relationship between expected rate of return and systematic risk.
• Explain what is meant by an “efficient financial market,” and describe the three levels (or forms) to market efficiency.

Take Care...

Chapter 6 to 10


Chapter 6: Financial Statement Analysis

• Understand the purpose of basic financial statements and their contents.
• Explain why financial statement analysis is important to the firm and to outside suppliers of capital.
• Define, calculate, and categorize (according to liquidity, financial leverage, coverage, activity, and profitability) the major financial ratios and understand what they can tell us about the firm.
• Define, calculate, and discuss a firm’s operating cycle and cash cycle.
• Use ratios to analyze a firm’s health and then recommend reasonable alternative courses of action to improve the health of the firm.
• Analyze a firm’s return on investment (i.e., “earning power”) and return on equity using a Du Pont approach.
• Understand the limitations of financial ratio analysis.
• Use trend analysis, common-size analysis, and index analysis to gain additional insights into a firm’s performance.

Chapter 7: Funds Analysis, Cash-Flow Analysis, and Financial Planning

• Explain the difference between the flow of funds (sources and uses of funds) statement and the statement of cash flows – and understand the benefits of using each.
• Define “funds,” and identify sources and uses of funds.
• Create a sources and uses of funds statement, make adjustments, and analyze the final results.
• Describe the purpose and content of the statement of cash flows as well as implications that can be drawn from it.
• Prepare a cash budget from forecasts of sales, receipts, and disbursements – and know why such a budget should be flexible.
• Develop forecasted balance sheets and income statements.
• Understand the importance of using probabilistic information in forecasting financial statements and evaluating a firm’s condition.

Chapter 8: Overview of Working Capital Management

• Explain how the definition of “working capital” differs between financial analysts and accountants.
• Understand the two fundamental decision issues in working capital management – and the trade-offs involved in making these decisions.
• Discuss how to determine the optimal level of current assets.
• Describe the relationship between profitability, liquidity, and risk in the management of working capital.
• Explain how to classify working capital according to its “components” and according to “time” (i.e., either permanent or temporary).
• Describe the hedging (maturity matching) approach to financing and the advantages/disadvantages of short- versus long-term financing.
• Explain how the financial manager combines the current asset decision with the liability structure decision.

Chapter 9: Cash and Marketable Securities Management

• List and explain the motives for holding cash.
• Understand the purpose of efficient cash management.
• Describe methods for speeding up the collection of accounts receivable and methods for controlling cash disbursements.
• Differentiate between remote and controlled disbursement, and discuss any ethical concerns raised by either of these two methods.
• Discuss how electronic data interchange (EDI) and outsourcing each relates to a company’s cash collections and disbursements.
• Identify the key variables that should be considered before purchasing any marketable securities.
• Define the most common money-market instruments that a marketable securities portfolio manager would consider for investment.
• Describe the three segments of the marketable securities portfolio and note which securities are most appropriate for each segment and why.

Chapter 10: Accounts Receivable and Inventory Management

• List the key factors that can be varied in a firm’s credit policy, and understand the trade-off between profitability and costs involved.
• Explain how the level of investment in accounts receivable is affected by the firm’s credit policies.
• Critically evaluate proposed changes in credit policy, including changes in credit standards, credit period, and cash discount.
• Describe possible sources of information on credit applicants and how you might use the information to analyze a credit applicant.
• Identify the various types of inventories and discuss the advantages and disadvantages to increasing/decreasing inventories.
• Define, explain, and illustrate the key concepts and calculations necessary for effective inventory management and control, including classification, economic order quantity (EOQ), order point, safety stock, and just-in-time (JIT).
  

Take Care...

Chapter 11 to 15


Chapter 11: Short-Term Financing

• Understand the sources and types of spontaneous financing.
• Calculate the annual cost of trade credit when trade discounts are forgone.
• Explain what is meant by “stretching payables” and understand its potential drawbacks.
• Describe the various types of negotiated (or external) short-term financing.
• Identify the factors that affect the cost of short-term borrowing.
• Calculate the effective annual interest rate on short-term borrowing with or without a compensating balance requirement and/or a commitment fee.
• Understand what is meant by factoring accounts receivable.

Chapter 12: Capital Budgeting and Estimating Cash Flows

• Define “capital budgeting” and identify the steps involved in the capital budgeting process.
• Explain the procedure used to generate long-term project proposals within the firm.
• Justify why cash, not income, flows are the most relevant to capital budgeting decisions.
• Summarize in a “checklist” the major concerns to keep in mind as one prepares to determine relevant capital budgeting cash flows.
• Define the terms “sunk cost” and “opportunity cost” and explain why sunk costs must be ignored, whereas opportunity costs must be included, in capital budgeting analysis.
• Explain how tax considerations, as well as depreciation for tax purposes, affect capital budgeting cash flows.
• Determine initial, interim, and terminal period “after-tax, incremental, operating cash flows” associated with a capital investment project.

Chapter 13: Capital Budgeting Techniques

• Understand the payback period (PBP) method of project evaluation and selection, including its: (a) calculation; (b) acceptance criterion; (c) advantages and disadvantages; and (d) focus on liquidity rather than profitability.
• Understand the three major discounted cash flow (DCF) methods of project evaluation and selection – internal rate of return (IRR), net present value (NPV), and profitability index (PI).
• Explain the calculation, acceptance criterion, and advantages (over the PBP method) for each of the three major DCF methods.
• Define, construct, and interpret a graph called an “NPV profile.”
• Understand why ranking project proposals on the basis of the IRR, NPV, and PI methods “may” lead to conflicts in rankings.
• Describe the situations where ranking projects may be necessary and justify when to use either IRR, NPV, or PI rankings.
• Understand how “sensitivity analysis” allows us to challenge the single-point input estimates used in traditional capital budgeting analysis.
• Explain the role and process of project monitoring, including “progress reviews” and “post-completion audits.”

Chapter 14: Risk and Managerial (Real) Options in Capital Budgeting

• Define the “riskiness” of a capital investment project.
• Understand how cash-flow riskiness for a particular period is measured, including the concepts of expected value, standard deviation, and coefficient of variation.
• Describe methods for assessing total project risk, including a probability approach and a simulation approach.
• Judge projects with respect to their contribution to total firm risk (a firm-portfolio approach).
• Understand how the presence of managerial (real) options enhances the worth of an investment project.
• List, discuss, and value different types of managerial (real) options.

Chapter 15: Required Returns and the Cost of Capital

• Explain how a firm creates value, and identify the key sources of value creation.
• Define the overall “cost of capital” of the firm.
• Calculate the costs of the individual components of a firm’s overall cost of capital: cost of debt, cost of preferred stock, and cost of equity.
• Explain and use alternative models to determine the cost of equity, including the dividend discount approach, the capital-asset pricing model (CAPM) approach, and the before-tax cost of debt plus risk premium approach.
• Calculate the firm’s weighted average cost of capital (WACC) and understand its rationale, use, and limitations.
• Explain how the concept of Economic Value Added (EVA) is related to value creation and a firm’s cost of capital.
• Understand the capital-asset pricing model’s role in computing project-specific and group- specific required rates of return.
  

Take Care...

Chapter 16 to 20


Chapter 16: Operating and Financial Leverage

• Define operating and financial leverage and identify causes of both.
• Calculate a firm’s operating break-even (quantity) point and break-even (sales) point.
• Define, calculate, and interpret a firm’s degree of operating, financial, and total leverage.
• Understand EBIT-EPS break-even, or indifference, analysis, and construct and interpret an EBIT-EPS chart.
• Define, discuss, and quantify “total firm risk” and its two components, “business risk” and “financial risk.”
• Understand what is involved in determining the appropriate amount of financial leverage for a firm.

Chapter 17: Capital Structure Determination

• Define “capital structure.”
• Explain the net operating income (NOI) approach to capital structure and the valuation of a firm, and calculate a firm’s value using this approach.
• Explain the traditional approach to capital structure and the valuation of a firm.
• Discuss the relationship between financial leverage and the cost of capital as originally set forth by Modigliani and Miller (M&M), and evaluate their arguments.
• Describe various market imperfections and other “real world” factors that tend to dilute M&M’s original position.
• Present a number of reasonable arguments for believing that an optimal capital structure exists in theory.
• Explain how financial structure changes can be used for financial signaling purposes, and give some examples.

Chapter 18: Dividend Policy

• Understand the dividend retention versus distribution dilemma faced by the firm.
• Explain the Modigliani and Miller (M&M) argument that dividends are irrelevant.
• Explain the counterarguments to M&M – that dividends do matter.
• Identify and discuss the factors affecting a firm’s dividend and retention of earnings policy.
• Define, compare, and justify cash dividends, stock dividends, stock splits, and reverse stock splits.
• Define “stock repurchase” and explain why (and how) a firm might repurchase stock.
• Summarize the standard cash dividend payment procedures and critical dates.
• Define and discuss dividend reinvestment plans (DRIPs).

Chapter 19: The Capital Market

• Understand the characteristics of the capital market and the difference between a primary and a secondary market.
• Describe the three primary methods used by companies to raise external long-term funds – public issue, privileged subscription, and private placement.
• Explain the role of investment bankers in the process of issuing new securities, including traditional underwriting, best efforts offering, shelf registration, and standby arrangements.
• Calculate the theoretical value of a (subscription) right, and describe the relationships among the market price of the stock, the subscription price, and the value of the right.
• Understand the Securities and Exchange Commission (SEC) registration process, including the role played by the registration statement, red herring, prospectus, and tombstone advertisement.
• Understand the roles that venture capital and an initial public offering (IPO) play in financing the early stages of a company’s growth.
• Discuss the potential signaling effects that often accompany the issuance of new long-term securities.

Chapter 20: Long-Term Debt, Preferred Stock, and Common Stock

• Understand the terminology and characteristics of bonds, preferred stock, and common stock.
• Explain how the retirement (repayment) of bonds and preferred stock may be accomplished in a number of different ways.
• Explain the differences between various types of long-term security in terms of claims on income and assets, maturities, security holders’ rights, and the tax treatment of income from the securities.
• Discuss the advantages and disadvantages of issuing/buying the three different types of long- term securities from the perspective of both the issuer and the investor.
  

Take Care...

Chapter 21 to 24


Chapter 21: Term Loans and Leases

• Describe various types of term loans and discuss the costs and benefits of each.
• Explain the nature and the content of loan agreements, including protective (restrictive) covenants.
• Discuss the sources and types of equipment financing.
• Understand and explain lease financing in its various forms.
• Compare lease financing with debt financing via a numerical evaluation of the present value of cash outflows.

Chapter 22: Convertibles, Exchangeables, and Warrants

• Describe the features of three common types of options that may be used by firms in their financing – the convertible security, the exchangeable bond, and the warrant.
• Understand why securities with option features may be attractive for a firm’s long-term financing needs.
• Explain the different terms used to express value for convertible securities – conversion value, market value, and straight-bond value.
• Calculate the value of convertible securities, exchangeable bonds, and warrants, and explain why premiums over different values occur.
• Understand the relationship between an option instrument and its underlying security.

Chapter 23: Mergers and Other Forms of Corporate Restructuring

• Explain why a company might decide to engage in corporate restructuring.
• Understand and calculate the impact on earnings and on market value of companies involved in mergers.
• Describe what merger benefits, if any, accrue to acquiring company shareholders and to selling company shareholders.
• Analyze a proposed merger as a capital budgeting problem.
• Describe the merger process from its beginning to its conclusion.
• Describe different ways to defend against an unwanted takeover.
• Discuss strategic alliances and understand how outsourcing has contributed to the formation of virtual corporations.
• Explain what “divestiture” is and how it may be accomplished.
• Understand what “going private” means and what factors may motivate management to take a company private.
• Explain what a leveraged buyout is and what risk it entails.

Chapter 24: International Financial Management

• Explain why many firms invest in foreign operations.
• Explain why foreign investment is different from domestic investment.
• Describe how capital budgeting, in an international environment, is similar to or dissimilar from that in a domestic environment.
• Understand the types of exchange-rate exposure and how to manage exchange-rate risk exposure.
• Compute domestic equivalents of foreign currencies given the spot or forward exchange rates.
• Understand and illustrate purchasing-power parity (PPP) and interest-rate parity.
• Describe the specific instruments and documents used in structuring international trade transactions.
• Distinguish among countertrade, export factoring, and forfaiting.

Take Care...

dear
it is a great pleasure to see a wonderful work on the theme.
many many thanks for posting and sharing.
may i request do u have some material on economics of education
pl do post
with best wishes
rajesh

Hi

Wonderful Collection , Really Helpful for all of us.

Thanks for sharing such a huge data Base.

Best Regards

Sandip

I am uploading ppts on all the Chapters of Financial Management of the book named "Fundamentals of Financial Management"...

I am also describing here in Brief about the topic that is been covered in each of the PPTs...

Hope it helps you out...

Chapter 1 The Role of Financial Management

• Explain why the role of the financial manager today is so important.
• Describe “financial management” in terms of the three major decision areas that confront the financial manager.
• Identify the goal of the firm and understand why shareholders’ wealth maximization is preferred over other goals.
• Understand the potential problems arising when management of the corporation and ownership are separated (i.e., agency problems).
• Demonstrate an understanding of corporate governance.
• Discuss the issues underlying social responsibility of the firm.
• Understand the basic responsibilities of financial managers and the differences between a “treasurer” and a “controller.”

Chapter 2: The Business, Tax, and Financial Environments

• Describe the four basic forms of business organization in the United States – and the advantages and disadvantages of each.
• Understand how to find a corporation’s taxable income and how to determine the corporate tax rate – both average and marginal.
• Understand various methods of depreciation.
• Explain why acquiring assets through the use of debt financing offers a tax advantage over both common and preferred stock financing.
• Describe the purpose and makeup of financial markets.
• Demonstrate an understanding of how letter ratings of the major rating agencies help you to judge a security’s default risk.
• Understand what is meant by the “term structure of interest rates” and relate it to a “yield curve.”

Chapter 3: The Time Value of Money

• Understand what is meant by “the time value of money.”
• Understand the relationship between present and future value.
• Describe how the interest rate can be used to adjust the value of cash �ows – both forward and backward – to a single point in time.
• Calculate both the future and present value of: (a) an amount invested today; (b) a stream of equal cash flows (an annuity); and (c) a stream of mixed cash flows.
• Distinguish between an “ordinary annuity” and an “annuity due.”
• Use interest factor tables and understand how they provide a shortcut to calculating present and future values.
• Use interest factor tables to find an unknown interest rate or growth rate when the number of time periods and future and present values are known.
• Build an “amortization schedule” for an installment-style loan.

Chapter 4: The Valuation of Long-Term Securities

• Distinguish among the various terms used to express value, including liquidation value, going-concern value, book value, market value, and intrinsic value.
• Value bonds, preferred stocks, and common stocks.
• Calculate the rates of return (or yields) of different types of long-term securities.
• List and explain a number of observations regarding the behavior of bond prices.

Chapter 5: Risk and Return

• Understand the relationship (or “trade-off”) between risk and return.
• Define risk and return and show how to measure them by calculating expected return, standard deviation, and coefficient of variation.
• Discuss the different types of investor attitudes toward risk.
• Explain risk and return in a portfolio context, and distinguish between individual security and portfolio risk.
• Distinguish between avoidable (unsystematic) risk and unavoidable (systematic) risk; and explain how proper diversification can eliminate one of these risks.
• Define and explain the capital-asset pricing model (CAPM), beta, and the characteristic line.
• Calculate a required rate of return using the capital-asset pricing model (CAPM).
• Demonstrate how the Security Market Line (SML) can be used to describe the relationship between expected rate of return and systematic risk.
• Explain what is meant by an “efficient financial market,” and describe the three levels (or forms) to market efficiency.

Take Care...
[/quote]

Hi Ross
Really nice of you to have taken time to post the entire lot of useful & interesting presentations and very thoughtful of you to have briefed about them.
Thanks a lot for everything.
Regards
Raj

:lol: happy wiht the pps as this is platform to share a lot of knowledge its great i too have a lot of material but i dont know how to upload if any body can tell me it will help every body a lot
8-) cooooooooooooooollllllllllllllllll
bye
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Dear Ross,
I must say you have done a great job... these presentations are very useful for anyone who want to gain knowledge on Finance Management, I appreciate your efforts.
Cheers,
Nitin Bansal