Notes Professional programme CS

Following are the notes of professional programme cs.

PAPER 3 : FINANCIAL, TREASURY AND FOREX MANAGEMENT

Level of knowledge : Expert knowledge.Objectives :(i) To provide conceptual clarity about the management tools and techniques used in financial planning, analysis, control and decision making. (ii) To provide knowledge of derivatives, forex and treasury management to enable the candidates to tackle practical situation with ease.

Detailed contents :

(A) Financial Management

1. Financial Management Basics  Nature of Financial Management Scope of Financial Management Significance of Financial Management  Objectives of Financial Management Risk-Return Value of Firm Financial Distress   Insolvency Financial sector reforms  Impact of Financial Sector Reforms on financial management  Functions of finance executive in an organization Recent Development of Financial Management 2. Capital Budgeting Decisions Meaning of Capital Expenditure Planning and control of capital expenditure  Capital budgeting  Capital Budgeting Process Techniques of capital budgeting Discounted Cash Flow Methods  Non-discounted Cash Flow Methods   Capital rationing Risk evaluation Sensitivity analysis  Simulation for risk evaluation Linear programming and capital budgeting decisions 3. Capital Structure Decisions Meaning and significance of capital structure Capital structure Vs financial structure  Capital structure planning and designing Optimal capital structure  Determinants of capital structure  Capital structure and valuation Theoretical analysis  EBIT Analysis  EPS analysis  Cost of capital Factors affecting cost of capital Measurement of cost of capital Weighted average cost of capital Marginal cost of capital Risk and leverage  Operating Leverage  Financial Leverage  Measures of leverage Leverage effects on shareholders returns 4. Sources of Finance Meaning of Finance Equity Non-voting preference shares  Debentures   bonds Company deposits  Term loans from financial institutions and banks;  International finance  Syndication of loans  Euro-issues External commercial borrowings  FCCB  Internal funds as a source of finance  Retention of profits  Bonus shares  Deferred payment arrangements  Corporate taxation   Impact of Corporate Taxation on corporate financing  Financing cost escalation 5. Dividend Policy Dividend  Types of Dividend Meaning of Dividend Policy  Determinants of Dividend Policy Constraints of Dividend Policy Different dividend theories Walter’s Model  Gordon’s Model Modigliani-Miller Hypothesis of dividend irrelevance Forms of dividend; Practical considerations of dividend policy Legal constraints of Dividend Policy Corporate dividend practices in India; statutory framework  6. Working Capital Management and Control Working capital - meaning, types, determinants  Assessment of working capital requirements  Operating cycle concept Applications of quantitative techniques  Management of working capital    Cash,  Receivables   Inventories   Financing of working capital  Banking norms and macro aspects of working capital management 7. Security Analysis and Portfolio Management   Security analysis   Fundamental approach, technical approach of Capital Market  Efficient capital market theory   Portfolio management - meaning,  Objectives of Portfolio Management  Portfolio theory – traditional approach; modern approach  CAPM model. 8. Financial Services  Meaning of financial services  Significance of financial services  Scope of financial services  Types of financial services  Merchant banking,  Leasing and hire purchase  Venture capital  Mutual funds  Factoring and forfeiting  Securitization of debt  Loan syndication  Custodial and corporate advisory services  Credit rating 9. Project Planning and Control  Meaning of Project Planning Preparation of project report;  Project appraisal  Under normal, inflationary and deflationary conditions  Project appraisal by financial institutions   Lending policies  Appraisal norms by financial institutions and banks;  Loan documentation  Loan syndication  Project review and control; Social cost and benefit analysis of project 10. Derivatives and Commodity Exchanges  Concept of derivatives   Financial derivatives  Commodity derivatives  Types of derivatives   Forward contracts  Futures contracts  Options  Participants in futures and options market   Index based derivatives  Security based derivatives;  Derivatives and exposure management Currency forwards Currency futures Currency options  Currency swaps  Interest rate risk management  Derivative markets in India  Commodity exchanges in India

(B) Treasury Management

1.  Meaning of  Treasury Management 2.  Functions of Treasury Management 3.  Objectives of Treasury Management 4.  Scope of Treasury Management 5.  Relationship between TM and FM 6.  Role and responsibilities of chief finance executive 7.  Tools of treasury management 8.  Internal treasury controls 9.  Environment for treasury management 10. Role of information technology in treasury management 11. Liquidity management 12. Regulation, supervision and control of treasury operations 13. Implications of treasury on international banking 14. Recent Developments of Treasury Management

(C) Forex Management

1. Meaning and Nature of Forex Management 2. Significance of Forex Management  3. Scope of Forex management; 4.  foreign exchange market  5. Structure Forex Market 6. Foreign exchange rates 7.  Determination of Forex Rates 8. Exchange rate quotes; 9.  Types of exchange rates; 10. Forex trading; 11. Currency futures and options; 12. Foreign exchange risk exposures and their management; 13. Exchange rate forecasting; 14. Risk in foreign exchange business. 15. Recent Development of Forex Management

See also

1. CS Notes  of  Executive Programme

2. CS Notes of Foundation Programme