
Forecast, plan, and control financial resources through investment, financing, and dividend decisions. Compare asset purchases versus lease, manage costs, and pursue wealth maximization via cash flows and present value.
Explore internal and external sources of financing, including equity, debt, and retained earnings, and distinguish long-term, medium-term, and short-term funds with real-world examples.
Explain equity share capital as permanent capital raised from the public, with face value 100 and 10,000 shares totaling ten lakhs, risk is high for shareholders, dividends are not tax-deductible.
Preference shares blend equity and debentures, gaining priority and fixed dividends, especially on winding up. They may be cumulative, non-cumulative, redeemable, non-redeemable, participating, non-participating, convertible, or non-convertible.
Debt instruments issued to the public raise funds for a company with a fixed interest rate; debentures can be secured, redeemable, convertible, or bearer, including zero-interest fully convertible types.
Facilitate a project start by providing a short-term loan to bridge the gap between loan application and disbursement until long-term loan formalities are completed.
Fund venture capital financing for a new high-risk venture with a long-term horizon. Offer four types—equity financing, conditional loan, income note, and participating debentures—with royalties or interest as repayment features.
Explore lease financing, a contract between lessor and lessee for asset use in exchange for rent. Learn operating and finance leases, sale and leaseback, and open or closed ended options.
Learn how banks securitize home loan assets into marketable securities via special purpose vehicles to raise funds for new lending while paying investors fixed income.
Explore how trade credit provides short-term finance from suppliers, with 15–90 day terms, creating payables for buyers and receivables for sellers, including bills of exchange, promissory notes, and bank financing.
accrued expenses are liabilities for day-to-day costs incurred but paid later, such as salaries and wages, rent, and taxes.
Understand deferred income and advances from customers as short-term liabilities, converting to revenue after each month as rent is received and customized plant and machinery is produced over six months.
Learn about commercial papers, unsecured money market promissory notes issued by highly rated corporates to diversify short-term finance, denominated in five lakh multiples, and rated by Indian agencies.
Learn about treasury bills, or t-bills, central government securities issued by the Government of India to meet short-term borrowing, with maturities from 14 to 365 days and low risk.
Examine certificate of deposit as a fixed deposit in short-term finance. Learn how banks issue certificates to investors with fixed maturities and stated interest rates.
Explore bank advances, including short-term loans, overdraft and cash credit, with secured and unsecured options via pledge or hypothecation, and learn bills purchase or discount mechanics.
Understand depository receipts, including ADRs, GDRs, and IDRs, and how banks deposit foreign shares to create receipts that let investors trade on major exchanges.
Learn how ratio analysis uses financial statements—profit and loss, balance sheet, and cash flow—to assess a firm's liquidity, leverage, efficiency, and profitability, including intra- and inter-firm comparisons.
Examine liquidity ratios, short-term solvency ratios showing a business’s ability to pay current liabilities. Learn current, quick, cash ratios, interval measure ratios, and net working capital ratios used by lenders.
Learn how the current ratio, a liquidity measure, compares current assets to current liabilities to assess short-term solvency, with calculation details and the two-to-one benchmark.
Learn how the quick ratio uses quick assets (current assets minus inventories and prepaid expenses) over current liabilities to assess a firm’s ability to cover near-term obligations.
Explore cash ratio, an absolute liquidity measure, by analyzing cash, bank balance, marketable securities, and current investments against current liabilities to assess immediate solvency.
Learn to calculate basic defense interval ratio and interval measure ratio, using cash, net receivables, and marketable securities against daily operating expenses; derive quick assets from current assets minus inventories.
Learn how net working capital ratio, a liquidity ratio, measures a company’s ability to pay current liabilities with current assets using the formula current assets minus current liabilities.
Explore how to compute liquidity ratios—current, quick, cash, interval, and working capital—using ABC Limited and PR Limited data, and analyze their implications against industry standards.
Leverage ratios assess long-term solvency by analyzing a firm's capital structure, including equity, debt, and reserves, and coverage ratios to gauge the ability to pay charges.
Discover how the equity ratio shows the share of owner funds in net assets, using methods: funds divided by total sources, or funds divided by net assets, signaling risk.
Discover how debt to equity ratio is calculated in three ways—long-term debt, total debt, and total outstanding liabilities—divided by owners' funds, and its implications for creditor protection and capital structure.
Compute the debt to total assets ratio by dividing total outstanding liabilities by total assets. A higher ratio indicates assets are less backed by equity.
Compute proprietary ratio as owners' funds divided by total assets, noting equity shares, reserves and fictitious assets. Contrast with equity ratio using net assets.
Analyze the capital gearing ratio to assess whether fixed cost bearing capital (preference shares, debentures, bonds, loans) can be covered by equity funds, with higher ratios indicating greater risk.
Learn how to calculate the debt service coverage ratio, a leverage metric that tests whether earnings available for debt services cover interest, installments, and lease payments.
Compute the interest coverage ratio, a leverage ratio known as times interest earned, by dividing earnings before interest and taxes by interest to assess solvency and coverage of interest payments.
Evaluate fixed charges coverage ratio to determine if earnings cover fixed charges, including interest, lease payments, and preference dividends, unlike debt service coverage ratio using operating cash profit.
Compute dividend coverage ratios for preference and equity, using earnings after tax and, for equity, earnings after tax minus preference dividends, to assess solvency.
Compute and compare key capital structure and leverage ratios—equity ratio, debt ratio, debt-to-equity, debt-to-total assets, proprietary ratio, and capital gearing—using ABC and PQR balance sheets.
Calculate and analyze leverage and coverage ratios, including debt service, interest, fixed charges, and equity and preference dividend coverage, using ABC limited and p q r limited examples.
Explore activity ratios, or efficiency and performance ratios, that measure how well a firm uses assets. Learn turnover concepts and types, including inventory, receivables, and payables turnover in working capital.
Calculate the total assets turnover ratio, an efficiency metric, using either sales or cost of goods sold as the numerator, with assets defined as fixed plus investments plus current assets.
Explore the fixed asset turnover ratio, calculated as sales or cost of goods sold divided by fixed assets (closing or average). Learn its limitation from depreciation and asset age.
Learn net asset turnover, also called capital turnover, measured as sales or COGS divided by net assets or capital invested, and when to use each view, with profit considerations.
Explore the current assets turnover ratio, a measure of asset efficiency, calculated as sales or cost of goods sold divided by current assets.
Learn how to measure the efficiency of working capital using the working capital turnover ratio, its two calculation methods, and its relation to inventory, debtors, and creditors turnover.
Learn to compute the inventory turnover ratio—cost of goods sold over average inventory—using opening and closing stock or daily balances, including raw materials and holding period.
Analyze how the receivables turnover ratio (debtors turnover ratio) measures the speed of credit sales collections and compute the average collection period using average accounts receivable.
Learn how to measure payables turnover ratio, also known as creditors turnover ratio, using credit purchases and average accounts payable to assess liquidity and supplier terms.
Compute and analyze activity ratios, or turnover ratios, using ABC Limited and PQR Limited, including total assets turnover, fixed asset turnover, and working capital turnover.
Hi
This is a Corporate Financial management course from beginners to advanced level. It begins with understanding basic concepts and terms of financial management to application of the financial management in decision making. The course consists of video lectures along with solved illustrations and Quiz that provides better understanding of concept. It is logically divided into various Sections :
Module 1 : Introduction
(Includes Section 1)
Introduction and understanding the meaning of financial management.
Module 2 : Sources of Finance
(From Section 2 to Section 6)
Here we are identifying and understanding different sources of Finance. This includes all long term finance and medium term finance such as Equity and Preference share capital , Bonds and Debentures, Venture Capital, Asset Securitization, Lease Financing, Depository Receipts, Trade Credit and accrued expenses. It also includes all short term finance such as Bridge Finance, Treasury Bills, Certificate of Deposits, Commercial paper etc. All the sources of finance are explained in video lectures along with illustrations.
Module 3 : Financial Ratios and Analysis
(From Section 7 to Section 11)
Here We discuss about different types of Financial Ratios such as Liquidity Ratios (Short term solvency ratios) , Leverage Ratios (Long Term solvency ratios) ,Activity Ratios (Turnover ratios) and Profitability Ratios.
Liquidity Ratios includes current ratio, quick ratio, cash ratio and Interval measure ratio. Each ratio is explained in video lecture along with illustrations.
Leverage Ratios include equity ratio, debt ratio, debt to equity ratio, debt to total assets ratio, proprietary ratio, capital gearing ratio, debt service coverage ratio, dividend coverage ratio, interest coverage ratio, fixed charges coverage ratio etc. Each ratio is explained in video lecture along with illustrations.
Turnover ratios include fixed assets turnover ratio, net assets turnover ratio, current assets turnover ratio, working capital turnover ratio, inventory turnover ratio, receivables turnover ratio, payables turnover ratio etc. Each ratio is explained in video lecture along with illustrations.
Profitability ratios include gross profit ratio, net profit ratio, operating profit ratio, expenses ratio, return on assets, return on capital employed, return on equity, earning per share, dividend per share, dividend payout ratio, price earning ratio, dividend and earning yield ratio, market value by book value ratio, Q ratio. Each ratio is explained in video lecture along with illustrations.
DuPont Analysis on ROI (Return on Investment) , ROA (Return on Assets) and ROE (Return on Equity)
This module also includes a comprehensive solved illustration that explains how to calculate all types of ratios and how to use these ratios for analysis and decision making.
Module 4 : Time Value of Money
(From Section 12 to Section 15)
Here we discuss about the concept of Time Value of Money and how to use concept of time value of money. The relationship between inflation, purchasing power and Time value of money is separately discussed. Other topics included are Difference between Simple interest and compound interest, Present value and Future value of money, Formula for present value and future value, Discount Factor, Annuity, Present Value and Future Value of Annuity. All topics are explained in video lecture along with examples.
Module 5 : Cost of Capital
(From Section 16 to Section 19)
Here we will learn how to calculate cost of capital for individual capitals i.e Cost of Debentures/ Bonds, Cost of Preference shares , Cost of Equity shares and then How to calculate total cost of capital.
Cost of debt/Bonds and debentures includes calculation of Cost of Redeemable and Irredeemable debts using approximation method and Internal Rate of Return (IRR) Method. It also includes separate lecture wherein logic for using current price in calculating cost of capital is explained.
Cost of Preference shares using Approximation method and Internal Rate of Return (IRR Method)
Cost of Equity and Retained Earnings using Dividend Price Model, Earnings Approach model, Gordon's growth model, Realized Yield Approach, Capital Asset Price Model is explained along with examples. Besides Calculation of Growth Rate for Gordon's growth model, Beta , Types of Risks - Systematic and Unsystematic risks are explained in separate video lecture along with examples.
This section is concluded by calculating weighted average cost of capital (WACC) and Marginal cost of capital.
Module 6 : Leverages
(From Section 20 to Section 23)
Here we will be learning about different types of Leverages - Operational Leverage, Financial Leverage and Combined Leverage. This will be followed by Formula to calculate degree of operating leverage (DOOL/DOL), degree of Financial leverage (DOFL/DFL) and degree of combined leverage (DOCL/DCL). Operating and Financial break even points are analyzed in separate lectures and relationship of break even points with leverage is discussed. Some other topics include relationship between Margin of Safety and Operational leverage, Relationship between Break even point - Fixed cost and operational leverage, Why financial leverage is known as trading on equity and double edge sword.
Module 7 : Capital Structure
(From Section 24 to Section 33)
It includes meaning of capital structure and capital structure theories. Following theories are discussed in this module : Net Income approach, Traditional Approach, Net Operating Income approach, Modigliani and Miller approach , Trade off theory and pecking theory. Along with this following topics are also discussed - meaning of arbitrage with solved illustrations, Indifference points, Over capitalization and under capitalization.
Module 8 : Capital Budgeting
(From Section 34 to Section 49)
It begins meaning of Capital Budgeting and purpose of Capital Budgeting. This is followed by process of capital budgeting and types of Capital budgeting decisions - Replacement and Modernization decisions, Expansion decisions, Diversification decisions, Mutually Exclusive decisions, Accept or Reject decision, Contingent decision.
Other terms such as incremental cashflows, Tax Benefit on Depreciation, Opportunity cost and Sunk cost, Working capital costs, allocated overhead costs are also explained in separate tutorials along with illustrations. This is followed by types of cashflows for new project and replacement project along with basic principles of calculating cashflows.
All Capital Budgeting Techniques i.e Payback Period Method, Payback Reciprocal Method, Accounting Rate of Return (ARR) Method, Discounted Payback period method, Profitability Index method (PI) , Net Present Value Method (NPV) , Internal Rate of Return Method (IRR) and Modified Internal Rate of Return (MIRR) are discussed in detail along with meaning , Illustrations , advantages and disadvantages. Reinvestment assumptions and anomalies in Net Present Value Method (NPV) and Internal Rate of Return Method (IRR) method along with reasons and examples are discussed separately.
Capital Rationing Meaning and Capital Rationing for Divisible and Indivisible projects is discussed along with solved illustrations.
Methods to analyze Mutually exclusive projects with different tenures - i.e Replacement chain Method and Equivalent annualized criterion method are also included along with solved examples.
Module 9 : Risk Analysis in Capital Budgeting
(From Section 50 to Section 55)
It begins with different types of risks involved in capital budgeting. This includes Project Specific risk, Company Specific risk, Industry Specific risk, Competitive risk, Market risk, Risk due to economic factors and International risk.
The following techniques of Risk analysis are explained along with example in separate video lectures :
Statistical Technique - Probability
Statistical Technique - Variance and Standard Deviation
Statistical Technique - Coefficient of Variation
Conventional Technique - Risk adjusted discount rate
Conventional Technique - Certainty Equivalents
Sensitivity Analysis
Scenario Analysis
Module 10 : Dividend Decisions
(From Section 56 to Section 62 )
It begins with the introduction on dividend decisions that includes separate video lectures on Significance of Dividend decisions, Forms of Dividend, Relationship between Retained Earnings and Growth, Factors affecting dividend decisions, Dividend Policies and types , Dividend policies for mature companies and growth companies.
It is followed by explanation of following theories of Dividend Policy :
Modigliani and Miller Hypothesis
Walter's Model
Gordon's Model
Dividend Discount Model - No Growth, Constant Growth and Variable Growth
Graham and Dodd Model
Linter's Model
Each Theory consists of video lectures explaining assumptions, formula , solved illustrations , advantages and limitations.
The module ends with explanation of Stock Splits.
Module 11 : Working Capital
(From Section 63to Section 70 )
This module begins with meaning significance and types of working capital.
The other sections includes following topics :
Optimum working capital
Operating Cycle and Working Capital Cycle - Meaning, Concept and Calculation along with comprehensive solved example
Estimation of Working Capital in detail that includes estimation of each and every component of working capital along with solved illustration.
Working Capital on Cash cost basis- Meaning, Concept and Calculation along with comprehensive solved example
Impact of Double Shift on Working Capital - Meaning, Concept and Calculation along with comprehensive solved example
Module 12 : Treasury and Cash Management
(From Section 71 to Section 75 )
It begins with meaning of Cash management along with functions of Treasury and Cash Management. It is followed by preparing of Cash Budgets - Both for long term and Short term along with solved illustrations.
Further it is followed by Cash Management Models and Theories. It includes William J Baumol's EOQ Model and Miller Orr Cash Management model.
It ends with lectures on recent developments in Cash Management Systems and Management of Marketable securities.
Module 13 : Inventory Management
(Section 76)
This includes various topics related to Inventory management such as Reorder Level, Reorder Quantity, Minimum stock level, average stock level , Maximum stock level, Danger level and buffer stock along with solved illustration on inventory management.
Module 14 : Management of Receivables and Payables
(From Section 77 to Section 81)
This module includes following topics :
Management of Debtors - Meaning and Objectives
Credit Policy - Meaning and Factors affecting credit policy
Approaches to evaluation of Credit policies along with the solved illustrations- Evaluation of Credit policies on Total Approach and Evaluation of Credit policies on Incremental Approach.
Financing receivables
Factoring services
Forfaiting
Innovations in receivables management
Monitoring of receivables
Management of Payables
Cost of Payables - Calculation along with solved illustration
Module 15 : Working Capital Finance
(Section 82)
This module includes following topics :
Meaning an types of Working capital Finance
Spontaneous working capital finance
Intercorporate debts and deposits
Commercial Papers
Bills discounting, Rediscounting and Factoring
Forms of Bank credit for working capital finance
Thus, this course provides complete understanding about basics of Corporate Finance or Management Finance. Hope you enjoy it.
Tip : It is better to solve illustrations along with lectures for better understanding of concept.
Happy Learning !