Ca Inter Finance Management Support Series Part 1

Ratio Analysis, Time Value of Money, Cost of Capital, Valuation of Shares & Debts, Capital Structure Theories, Leverage

What you’ll learn
Understand Meaning and Concepts of Finance Management
Identify and understand different Sources of Finance and Types
Types of Long Term and Medium Term finance
Types of Equity Share Capital and Preference share capital
What is Debentures/ Bonds ? Types of Debentures and Bonds
Venture Capital Financing
Asset Securitisation
Lease Financing – Explanation of concept and types of lease
Depository Receipts – ADR (American Depository Receipts), GDR (Global Depository Receipts) , IDR (Indian Depository Receipts))
Trade Credit
Accrued Expenses
Deferred Income and advance from customers
Short Term Bank advances and its types
Bridge Financing
Commercial Paper
Treasury bills and Certificate of Deposits
Different Types of Financial Ratios – Calculation and Analysis along with illustrations
Types of Liquidity Ratios / Short Term solvency Ratios – Calculation and analysis along with illustrations
Current Ratios
Quick Ratio / Acid Test Ratio
Cash Ratio / Absolute Liquidity Ratio
Interval Measure Ratio
Types of Leverage Ratios / Long Term solvency ratios – Calculation and analysis along with illustrations
Equity Ratios
Debt Ratio
Debt To Equity Ratios
Debt To Total Assets ratios
Proprietary Ratio
Capital Gearing Ratio
Debt Service Coverage Ratio
Dividend Coverage Ratio
Interest Coverage Ratio
Fixed Charges Coverage Ratio
Types of Activity Ratios / Turnover Ratios/ Efficiency Ratios / Performance Ratios – Calculation and analysis along with illustrations
Total Assets Turnover Ratio
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
Profitability Ratios – Calculation and analysis along with illustrations
Gross Profit Ratio
Net Profit Ratio
Operating Profit Ratio
Expenses Ratio – COGS Ratio, Office and Administration Expenses Ratio, Selling and Distribution Expenses Ratio, Operating Expenses Ratio
Return on Investment (ROI)
Return on Asset (ROA)
Return on Capital Employed (ROCE)
Return on Equity (ROE)
DuPont Analysis on ROI, ROA and ROE
Earning Per Share (EPS)
Dividend Per Share (DPS)
Dividend Payout Ratio
Price Earning Ratio
Dividend and Earning Yield Ratio
Market Value by Book Value (MVBV)
Q ratio
Time Value of Money – Concept and Use of Time value of Money
Simple Interest and Power of Compounding
Present Value and Future Value of Single Cash Flow
What is Annuity and Types of Annuity
Present Value and Future Value of Annuity
Annuity Factor and Discount Factor
Internal Rate of Return (IRR)
Cost of Capital
Cost of Redeemable and Irredeemable Debts
Cost of Zero Coupon Bonds using IRR method
Cost of Ammortised Bonds using IRR Method
Methods to Calculate cost of Equity
Gordon’s Growth Model
Capital Asset Pricing Model (CAPM)
Cost of Preference Shares
Weighted average cost of Capital
Marginal Cost of Capital
What is Leverage ?
Operating Leverage, Financial Leverage and Combined Leverage
Break even Analysis- Operating Break even Point and Financial Break even point
Margin of Safety and Operating Leverage
Financial Leverage – Trading on Equity
Financial Leverage – Double edge Sword
Capital Structure Meaning and Theories
Net Income Approach
Traditional Approach
Net Operating Income Approach
Modigliani and Miller Approach
Arbitrage – Meaning and illustrations
Trade off Theory
Pecking Theory
EBIT- EPS – MP analysis
Return on Asset , Fixed Costs and EPS analysis
Financial Break even analysis
Indifference Points
Over Capitalisation and Under Capitalisation

Requirements
Basics Terms related to Accountancy
Basics Terms related to Finance

Description
HiThis is a Corporate Financial management course for students pursuing chartered accountancy course. 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 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 Securitisation, 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,Realised 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 analysed 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 capitalisation and under capitalisation.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 !!!

Overview
Section 1: Introduction

Lecture 1 What is Financial Management

Section 2: Sources of Finance

Lecture 2 Different types of Sources of Finance

Section 3: Share Capital

Lecture 3 Equity Share Capital

Lecture 4 Preference Share Capital

Section 4: Debentures and Bonds

Lecture 5 Debentures

Lecture 6 Bonds

Section 5: Other Long Term and Medium Term Financing Options

Lecture 7 Bridge Financing

Lecture 8 Venture Capital Financing

Lecture 9 Asset Securitisation

Lecture 10 Lease Financing

Section 6: Medium and Short Term Finances

Lecture 11 Trade Credit

Lecture 12 Accrued Expenses

Lecture 13 Deferred Expenses and Advance from Customers

Lecture 14 Commercial Papers

Lecture 15 Treasury Bills

Lecture 16 Certificate of Deposits

Lecture 17 Bank Advances

Lecture 18 Bank Advances for Export

Lecture 19 Depository Reciepts

Section 7: Financial Ratio and Analysis

Lecture 20 Ratio Analysis – Introduction

Section 8: Liquidity Ratios

Lecture 21 What is Liquidity Ratios

Lecture 22 Current Ratio

Lecture 23 Quick Ratio

Lecture 24 Cash Ratio

Lecture 25 Interval Measure Ratio

Lecture 26 Net Working Capital Ratio

Lecture 27 Solved Illustrations for Liquidity Ratios

Section 9: Leverage Ratios

Lecture 28 Leverage Ratios Introduction

Lecture 29 Equity Ratio

Lecture 30 Debt Ratio

Lecture 31 Debt to Equity Ratio

Lecture 32 Debt to Total Assets Ratio

Lecture 33 Properietary Ratio

Lecture 34 Capital Gearing Ratio

Lecture 35 Debt Service Coverage Ratio

Lecture 36 Interest Coverage Ratio

Lecture 37 Fixed Charges Coverage Ratio

Lecture 38 Dividend Coverage Ratio

Lecture 39 Solved illustration on leverage ratio – Capital Structure ratio

Lecture 40 Solved illustration on leverage ratio – coverage ratio

Section 10: Activity Based Ratio

Lecture 41 Activity Ratios Introduction

Lecture 42 Total Assets Turnover Ratio

Lecture 43 Fixed Assets Turnover Ratio

Lecture 44 Net Assets Turnover Ratio

Lecture 45 Current Assets Turnover Ratio

Lecture 46 Working Capital Turnover Ratio

Lecture 47 Inventory Turnover Ratio

Lecture 48 Receivables Turnover Ratio

Lecture 49 Payables Turnover Ratio

Lecture 50 Example Activity Ratios

Section 11: Profitability Ratios

Lecture 51 Profitability Ratios Introduction

Lecture 52 Gross Profit Ratio

Lecture 53 Net Profit Ratio

Lecture 54 Operating Profit Ratio

Lecture 55 Expense Ratio

Lecture 56 Return on Investment

Lecture 57 Return on Assets

Lecture 58 Return on Capital Employed

Lecture 59 Return On Equity

Lecture 60 DuPont Analysis

Lecture 61 EPS Ratio

Lecture 62 Dividend Per Share

Lecture 63 Dividend Payout Ratio

Lecture 64 Price Earning Ratio

Lecture 65 Dividend and Earning Yield Ratio

Lecture 66 Market value by Book value

Lecture 67 Q Ratio

Lecture 68 Profitability Ratios Example

Section 12: Time Value of Money

Lecture 69 Basic Concept of Time Value of Money

Lecture 70 Use of Concept of Time Value of Money

Lecture 71 Time Value Inflation and Purchasing power

Lecture 72 Simple Interest and Compound Interest

Lecture 73 Present Value and Future Value

Section 13: All about Single Cashflows

Lecture 74 Calculation of Present Value and Future Value Single (Without Formula)

Lecture 75 Formula for Present Value and Future Value for single payment

Lecture 76 Discount Factor

Section 14: All about Annuity

Lecture 77 Annuity

Lecture 78 Present Value of Annuity without Formula

Lecture 79 Formula for Present Value of Annuity

Lecture 80 Present Value of Ordinary Annuity using Formula

Lecture 81 Present Value of Annuity due using Formula

Lecture 82 Future Value of Annuity without Formula

Lecture 83 Formula derived for Future Value of Annuity

Lecture 84 Future Value of Annuity example using Formula

Lecture 85 Annuity Factor

Section 15: Power of Compounding and Calculation of IRR (Internal Rate of Return)

Lecture 86 Single Payment Compounded Daily Quarterly Monthly Weekly

Lecture 87 Annuity Compounded Daily Quarterly Monthly Weekly

Lecture 88 Internal Rate of Return (IRR)

Section 16: Cost of Capital Introduction

Lecture 89 What is cost of Capital

Section 17: Cost of Debts – Bonds and Debentures by Approximation method and IRR Method

Lecture 90 What is Cost of Debts ?

Lecture 91 How to calculate Cost of Irredeemable debts by Approximation Method

Lecture 92 What is Logic of using Current Market Price in Calculation of Cost of Debts

Lecture 93 How to calculate Cost of Redeemable Debts by Approximation Method

Lecture 94 How to Calculate Cost of Redeemable debts using Yield To Maturity approach

Lecture 95 Calculation -Cost of Zero Coupon bonds by IRR (Internal Rate of Return) method

Lecture 96 Calculation – Cost of Ammortised Bonds by IRR (Internal Rate of Return) method

Lecture 97 Calculation of Cost of Convertible Debt – Approximation and IRR method

Section 18: Cost of Shares – Preference Shares and Equity Shares and Retained Earnings

Lecture 98 Cost of Preference shares

Lecture 99 Methods for calculating Cost of Equity

Lecture 100 How to calculate Cost of Equity using Dividend Price Model

Lecture 101 How to Calculate Cost of Equity using Earnings Price Approach

Lecture 102 How to Calculate Cost of Equity – Gordon’s Growth Model Part 1

Lecture 103 How to Calculate Cost of Equity – Gordon’s Growth Model Part 2

Lecture 104 How to Calculate Cost of Equity – Gordon’s Growth Model Part 3

Lecture 105 How to calculate Cost of Equity – Realised Yield Approach

Lecture 106 Calculation of Cost of Equity by Capital Asset Pricing Model (CAPM) – Part 1

Lecture 107 Calculation of Cost of Equity by Capital Asset Pricing Model (CAPM) – Part 2

Lecture 108 Calculation of Cost of Equity by Capital Asset Pricing Model (CAPM) – Part 3

Lecture 109 Cost of Retained Earnings

Section 19: Weighted Average Cost of Capital and Marginal Cost of Capital

Lecture 110 How to calculate Weighted Average Cost of Capital

Lecture 111 How to Calculate Marginal Cost of Capital

Section 20: Leverage Basics

Lecture 112 Leverage Introduction

Section 21: All about Operating Leverage

Lecture 113 Operating Leverage Basics

Lecture 114 How to calculate degree of Operating Leverage along with example

Lecture 115 Break even analysis

Lecture 116 Relationship between Break even point ,Fixed cost and operating leverage

Lecture 117 Relationship between Margin of Safety and Operating Leverage

Lecture 118 Operating Leverage – Points to Remember

Section 22: All about Financial Leverage

Lecture 119 Financial Leverage – Meaning

Lecture 120 How to Calculate Degree of Financial Leverage

Lecture 121 Financial Leverage – Trading on Equity

Lecture 122 Financial Leverage – Double Edge Sword

Lecture 123 Financial Leverage Points to Remember

Section 23: All about Combined Leverage

Lecture 124 Combined Leverage

Lecture 125 Combined Leverage – Points to remember

Section 24: Basics of Capital Structure

Lecture 126 Capital Structure – Meaning and Theories

Section 25: Capital Structure Theories – Net Income Approach and Traditional Approach

Lecture 127 Net Income Approach

Lecture 128 Traditional Approach

Section 26: Capital Structure Theories – Net Operating Income Approach

Lecture 129 Net Operating Income Approach

Section 27: Capital Structure Theory – Modigliani and Miller Approach

Lecture 130 Modigliani and Miller Approach without Tax

Lecture 131 Modigliani and Miller Approach with Tax

Section 28: What is Arbitrage and How is it beneficial

Lecture 132 Arbitrage Meaning & How is it beneficial (When value of levered firm is greater)

Lecture 133 Arbitrage Meaning & How is it beneficial (If value of unlevered firm is greater)

Section 29: Trade Off Theory and Pecking Theory

Lecture 134 Trade Off Theory

Lecture 135 Pecking Order Theory

Section 30: Earnings Before Interest and Taxes ,Earnings per share and Market Price analysis

Lecture 136 EBIT-EPS-MP analysis

Section 31: Return on Asset, Financing Costs and EPS analysis

Lecture 137 Return on Asset , Financing Cost and Earnings per shares

Section 32: Financial Break even analysis and Indifference Point

Lecture 138 Financial Break even analysis

Lecture 139 Indifference Point

Section 33: Over Capitalisation and Under Capitalisation

Lecture 140 Over Capitalisation and Under Capitalisation

Students pursuing Chartered Accountancy Course