This course consists of the introduction to finance, financial environment, interest rates, time value of money, bond valuation, stock valuation, cost of capital, capital budgeting, and working capital.

This course Fundamentals of Finance aims to lay the foundation for understandingsfundamental concepts and principles of finance.

Unit 1: Introduction to Finance 5 LHs
Concept of finance; Finance functions, The financial goal; Finance in organizational structure; Finance and related disciplines. 

Unit 2: Financial Environment 4 LHs
Overview of financial environment; Financial instruments, Financial markets:Functions and types of financial markets; Financial institutions: Depository and non- depository financial institutions.

Unit 3: Analysis of Financial Statements 6 LHs
Financial statements and reports; Concept of financial statement analysis; Users offinancial analysis; Tools of financial statements analysis; Need of financial ratioanalysis; Types of financial ratios: liquidity ratios, asset management ratios debtmanagement ratios, profitability ratios and market value ratios; Du-Pont equation;Comparative ratios and benchmarking; Uses and limitations of ratio analysis. 

Unit 4: Interest rates 6 LHs
The cost of money; Interest rates levels; Determinants of market interest rates; Termstructure of interest rates; Theories of term structure of interest rates; Shape of yieldcurve; Using the yield curve to estimate future interest rates; Macroeconomic factorsinfluencing interest rates; and Interest rate and business decision. 

Unit 5: Time Value of Money 8 LHs
Concept of time value of money; Cash flow time line; Future values and presentvalues of a single cash flow; Computing the interest rate and the number of years;Future value and present value of an ordinary annuity and annuity due; Computingannuity payments, periods and interest rates; Present value of perpetuities; Presentvalue and future value of uneven cash flows; Semiannual and other compoundingperiods; Preparation of loan amortization schedule; Application of the concept oftime value of money.

Unit 6: Bond Valuation 5 LHs
Meaning and key characteristics of bonds, Basic financial asset valuation model,Valuation of bonds: perpetual bonds, zero coupon bonds, coupon bonds with finitematurity, Bonds with semiannual coupons, required return and bond values, Changesin bond values over time, Bond yields: current yield, capital gain yield, yield to maturity and yield to call.

Unit 7: Stock Valuation 5 LHs
Meaning and key features of common stock, Common stock valuation: single andmultiple holding periods, The dividend discount model: zero growth model, normalgrowth model, non-constant growth model, valuing the entire firm, Preferred stock: Features and valuation.

Unit 8: Cost of capital 5 LHs
Concepts and uses of cost of capital, Components of cost of capital: cost of debt, cost of preferred stock, cost of retained earnings, cost of new common stock, weightedaverage cost of capital; Factors affecting cost of capital.

Unit 9: Working Capital 4 LHs
Concepts of working capital; Types of working capital; Factors affecting the size ofworking capital; Working capital management and its significance; Operating cycle, cash conversion cycle and computing the amount of working capital requirement.