Strategic Financial Management
Course Summary:

Financial management is a discipline that affects every area of business – it is central to the processes of resource transformation and shareholder value. Whilst business is concerned with several relationships, with customers and employees – its relationships with the providers of finance are central to the strategic decision-making process.

In order for organisations to be effective, maintain their niches and be competitive, they have to align their finances with their strategies.  This requires their managing their finances strategically.  In this course, participants will be taught how to align the finances of their organisations with their strategies.

Course Objectives:

  • To introduce fundamental bookkeeping and accounting concepts to course participants to enable them to manage the financial aspects of their role more effectively.
  • To review the different approaches taken in the public and private sector
  • To make sense of key financial statements and some key ratios
  • To enable participants to manage financial aspects of projects more effectively
  • To participate more knowledgeably in the budgeting process.

Course Outline

1. Financial Policy and Corporate Strategy
  Strategic decision making framework
  Interface of Financial Policy and strategic management
  Balancing financial goals vis  sustainable growth.
2. Project Planning and Capital Budgeting
  Feasibility study
  Cash flow Projections – Impact of taxation, depreciation, inflation and working capital
  Capital Budgeting Decisions - Certainty Equivalent approach, Evaluation of Risky Investment Proposals, Risk and Return analysis, Simulation and decision tree analysis, Sensitivity analysis, Capital Rationing, Adjusted Net Present Value, Replacement decisions, Application of Real Options in capital budgeting, Impact of inflation on capital budgeting decisions
  Preparation of Project Report
  Social cost benefit analysis.
3. Leasing decision including cross border leasing
4. Dividend Decisions
  Dividend theories, Determinants of dividend policies.
(a) Indian Capital Market
  including role of various primary and secondary market institutions
(b) Capital Market Instruments
  Financial derivatives – stock futures, stock options, index futures, index options
  Option valuation techniques : Binomial model, Black Scholes Option Pricing Model, Greeks – Delta, Gamma, Theta, Rho and Vega
  Pricing of Futures – Cost of carry model
  Imbedded derivatives
(c) Commodity derivatives
(d) OTC derivatives
  Swaps, Swaptions, Forward Rate Agreements (FRAs), Caps, Floors and Collors.
6 Security Analysis
  Fundamental analysis - Economic analysis, Industry analysis and Company Analysis
  Bond valuation, Price Yield relationship, Bond Price forecasting – application of duration and convexity, Yield curve strategies
  Technical Analysis – market cycle model and basic trend identification, different types of charting, support and resistance, price patterns, moving averages, Bollinger Bands, momentum analysis.
7. Portfolio Theory and Asset Pricing
  Efficient Market Theory – Random walk theory ; Markowitz model of risk return optimization
  Capital Asset Pricing Model (CAPM)
  Arbitrage Pricing Theory (APT)
  Sharpe Index Model
  Portfolio Management - Formulation, Monitoring and Evaluation
  Equity Style Management
  Principles and Management of Hedge Funds
  International Portfolio Management.
8. Financial Services in India
  Investment Banking
  Retail Banking
  On Line Share Trading
  Depository Service.
(a) Mutual Funds:
  Regulatory framework, formulation, monitoring and evaluation of various schemes of Mutual funds, Money market mutual funds.
(b) Exchange Traded Funds.
10. Money Market operations
(a) Foreign Direct Investment, Foreign Institutional Investment.
(b) International Financial Management
  Raising of capital abroad - American Depository Receipts, Global Depository Receipts,
  External Commercial Borrowings and Foreign Currency Convertible Bonds
  International Capital Budgeting
  International Working Capital Management.
12. Foreign Exchange Exposure and Risk Management
  Exchange rate determination, Exchange rate forecasting
  Foreign currency market
  Foreign exchange derivatives – Forward, futures, options and swaps
  Management of transaction, translation and economic exposures
  Hedging currency risk.
13. Mergers, Acquisitions and Restructuring
  Meaning of mergers and acquisition, categories, purposes
  Process of mergers and acquisition – Identification and valuation of the target, acquisition through negotiation, due diligence, post – merger integration
  Legal and regulatory requirements
  Merger and Acquisition agreement
  Reverse merger
  Potential adverse competitive effects of mergers
  Corporate Takeovers: Motivations, Co-insurance effect, Cross-border takeovers, Forms of takeovers, Takeover defenses
  Going Private and Other Control Transactions: Leveraged Buyouts (LBOs), Management Buyouts (MBOs), Spin Offs and Asset Divestitures
  Corporate Restructuring : Refinancing and rescue financing, reorganizations of debtors and creditors, Sale of assets, targeted stock offerings, downsizing and layoff programmes, negotiated wage give-backs, employee buyouts.