Financial Management and International Finance

ICWA :: Final
Paper 12 : Financial Management & International Finance
[One Paper: 3 hours:100 marks]

Objective . . .

•	Understand the scope, goals and objectives of Financial Management
•	To provide expert knowledge on concepts, methods and procedures involved in using Financial Management for managerial decision-making
•	To gain knowledge of international monetary and financial system

1.	Overview of Financial Management	10%
	• Finance and Related Disciplines • Scope of Financial Management, • Planning environment • Key decisions of Financial Management • Emerging role of finance managers in India • Earnings distributions policy • Compliance of regulatory requirements in formulation of financial strategies • Sources of finance – long term, short term and international • Exchange rate – risk agencies involved and procedures followed in international financial operations
2.	Financial Management Decisions	15%
	• Capital structure theories and planning • Cost of capital • Designing Capital Structure • Capital budgeting • Lease financing • Working capital management
3.	Financial analysis & planning	10%
	• Funds flow and cash flow analysis • Financial ratio analysis -Ratios in the areas of performance, profitability, financial adaptability, liquidity, activity, shareholder investment and financing, and their interpretation. • Limitations of ratio analysis • Identification of information required to assess financial performance • Effect of short-term debt on the measurement of gearing.
4.	Operating and financial leverages	5%
	• Analysis of operating and financial leverages • Concept and nature of leverages operating risk and financial risk and combined leverage • Operating leverage and Cost volume Profit analysis – Earning Before Interest and Tax (EBIT) and Earning Per Share (EPS), indifference point.
5.	Financial Strategy	15%
	• Financial and Non-Financial objective of different organizations • Impact on Investment, finance and dividend decisions • Sources and benefits of international financing • Alternative Financing strategy in the context of regulatory requirements • Modeling and forecasting cash flows and financial statements based on expected values for variables – economic and business • Sensitivity analysis for changes in expected values in the models and forecasts • Emerging trends in financial reporting
6.	Investment Decisions	15%
	• Costs, Benefits and Risks analysis for projects • Linking investment with customer’s requirements • Designing Capital Structure • The impact of taxation, potential changes in economic factors and potential restrictions on remittance on these calculations • Capital investment real options • Venture Capital financing • Hybrid financing / Instruments
7.	Project Management	10%
	• Project Identification and Formulation • Identification of Project opportunities • Project Selection Consideration and Feasibility Studies • Project appraisal & Cost Benefit analysis • Source of Project Finance & Foreign Collaboration
8.	International Finance	10%
	• Minimization of risk, • Diversification of risk • Forward and futures, • Forward rate agreements • Interest rate swaps • Caps, floors and collars • Parity theorems • FDI • Money market hedge • Options.
9.	Sources of International Finance	5%
	• Rising funds in foreign markets and investments in foreign projects • Forward rate agreements and interest rate guarantees • Transaction, translation and economic risk, Interest rate parity, purchasing power parity and the Fisher effects • Foreign Direct Investment
10.	International Monetary and Financial System	5%
	• Understanding the International Monetary System • Export and Import Practices • International Financial Management: Important issues and features, International Capital Market • International Financial Services and Insurance: Important issues and features