I am uploading ppts on all the Chapters of Financial Management of the book named "Fundamentals of Financial Management"...
I am also describing here in Brief about the topic that is been covered in each of the PPTs...
Hope it helps you out...
Chapter 1 The Role of Financial Management[/FONT]
[FONT="]Explain why the role of the financial manager today is so important. [/FONT]
[FONT="]Describe “financial management” in terms of the three major decision areas that confront the financial manager. [/FONT]
[FONT="]Identify the goal of the firm and understand why shareholders’ wealth maximization is preferred over other goals. [/FONT]
[FONT="]Understand the potential problems arising when management of the corporation and ownership are separated (i.e., agency problems). [/FONT]
[FONT="]Demonstrate an understanding of corporate governance. [/FONT]
[FONT="]Discuss the issues underlying social responsibility of the firm. [/FONT]
[FONT="]Understand the basic responsibilities of financial managers and the differences between a “treasurer” and a “controller.” [/FONT]
[FONT="]
Chapter 2: The Business, Tax, and Financial Environments[/FONT]
[FONT="]Describe the four basic forms of business organization in the United States – and the advantages and disadvantages of each. [/FONT]
[FONT="]Understand how to find a corporation’s taxable income and how to determine the corporate tax rate – both average and marginal. [/FONT]
[FONT="]Understand various methods of depreciation. [/FONT]
[FONT="]Explain why acquiring assets through the use of debt financing offers a tax advantage over both common and preferred stock financing. [/FONT]
[FONT="]Describe the purpose and makeup of financial markets. [/FONT]
[FONT="]Demonstrate an understanding of how letter ratings of the major rating agencies help you to judge a security’s default risk. [/FONT]
[FONT="]Understand what is meant by the “term structure of interest rates” and relate it to a “yield curve.” [/FONT]
[FONT="]Chapter 3: The Time Value of Money[/FONT]
[FONT="]Understand what is meant by “the time value of money.” [/FONT]
[FONT="]Understand the relationship between present and future value. [/FONT]
[FONT="]Describe how the interest rate can be used to adjust the value of cash [/FONT][FONT="]�[/FONT][FONT="]ows – both forward and backward – to a single point in time. [/FONT]
[FONT="]Calculate both the future and present value of: (a) an amount invested today; (b) a stream of equal cash flows (an annuity); and (c) a stream of mixed cash flows. [/FONT]
[FONT="]Distinguish between an “ordinary annuity” and an “annuity due.” [/FONT]
[FONT="]Use interest factor tables and understand how they provide a shortcut to calculating present and future values. [/FONT]
[FONT="]Use interest factor tables to find an unknown interest rate or growth rate when the number of time periods and future and present values are known. [/FONT]
[FONT="]Build an “amortization schedule” for an installment-style loan. [/FONT]
[FONT="]Chapter 4: The Valuation of Long-Term Securities[/FONT]
[FONT="]Distinguish among the various terms used to express value, including liquidation value, going-concern value, book value, market value, and intrinsic value. [/FONT]
[FONT="]Value bonds, preferred stocks, and common stocks. [/FONT]
[FONT="]Calculate the rates of return (or yields) of different types of long-term securities. [/FONT]
[FONT="]List and explain a number of observations regarding the behavior of bond prices. [/FONT]
[FONT="]Chapter 5: Risk and Return[/FONT]
[FONT="]Understand the relationship (or “trade-off”) between risk and return. [/FONT]
[FONT="]Define risk and return and show how to measure them by calculating expected return, standard deviation, and coefficient of variation. [/FONT]
[FONT="]Discuss the different types of investor attitudes toward risk. [/FONT]
[FONT="]Explain risk and return in a portfolio context, and distinguish between individual security and portfolio risk. [/FONT]
[FONT="]Distinguish between avoidable (unsystematic) risk and unavoidable (systematic) risk; and explain how proper diversification can eliminate one of these risks. [/FONT]
[FONT="]Define and explain the capital-asset pricing model (CAPM), beta, and the characteristic line. [/FONT]
[FONT="]Calculate a required rate of return using the capital-asset pricing model (CAPM). [/FONT]
[FONT="]Demonstrate how the Security Market Line (SML) can be used to describe the relationship between expected rate of return and systematic risk. [/FONT]
[FONT="]Explain what is meant by an “efficient financial market,” and describe the three levels (or forms) to market efficiency. [/FONT]
[FONT="]Understand the purpose of basic financial statements and their contents. [/FONT]
[FONT="]Explain why financial statement analysis is important to the firm and to outside suppliers of capital. [/FONT]
[FONT="]Define, calculate, and categorize (according to liquidity, financial leverage, coverage, activity, and profitability) the major financial ratios and understand what they can tell us about the firm. [/FONT]
[FONT="]Define, calculate, and discuss a firm’s operating cycle and cash cycle. [/FONT]
[FONT="]Use ratios to analyze a firm’s health and then recommend reasonable alternative courses of action to improve the health of the firm. [/FONT]
[FONT="]Analyze a firm’s return on investment (i.e., “earning power”) and return on equity using a Du Pont approach. [/FONT]
[FONT="]Understand the limitations of financial ratio analysis. [/FONT]
[FONT="]Use trend analysis, common-size analysis, and index analysis to gain additional insights into a firm’s performance. [/FONT]
[FONT="]Chapter 7: Funds Analysis, Cash-Flow Analysis, and Financial Planning[/FONT]
[FONT="]Explain the difference between the flow of funds (sources and uses of funds) statement and the statement of cash flows – and understand the benefits of using each. [/FONT]
[FONT="]Define “funds,” and identify sources and uses of funds. [/FONT]
[FONT="]Create a sources and uses of funds statement, make adjustments, and analyze the final results. [/FONT]
[FONT="]Describe the purpose and content of the statement of cash flows as well as implications that can be drawn from it. [/FONT]
[FONT="]Prepare a cash budget from forecasts of sales, receipts, and disbursements – and know why such a budget should be flexible. [/FONT]
[FONT="]Develop forecasted balance sheets and income statements. [/FONT]
[FONT="]Understand the importance of using probabilistic information in forecasting financial statements and evaluating a firm’s condition. [/FONT]
[FONT="]Chapter 8: Overview of Working Capital Management[/FONT]
[FONT="]Explain how the definition of “working capital” differs between financial analysts and accountants. [/FONT]
[FONT="]Understand the two fundamental decision issues in working capital management – and the trade-offs involved in making these decisions. [/FONT]
[FONT="]Discuss how to determine the optimal level of current assets. [/FONT]
[FONT="]Describe the relationship between profitability, liquidity, and risk in the management of working capital. [/FONT]
[FONT="]Explain how to classify working capital according to its “components” and according to “time” (i.e., either permanent or temporary). [/FONT]
[FONT="]Describe the hedging (maturity matching) approach to financing and the advantages/disadvantages of short- versus long-term financing. [/FONT]
[FONT="]Explain how the financial manager combines the current asset decision with the liability structure decision. [/FONT]
[FONT="]Chapter 9: Cash and Marketable Securities Management[/FONT]
[FONT="]List and explain the motives for holding cash. [/FONT]
[FONT="]Understand the purpose of efficient cash management. [/FONT]
[FONT="]Describe methods for speeding up the collection of accounts receivable and methods for controlling cash disbursements. [/FONT]
[FONT="]Differentiate between remote and controlled disbursement, and discuss any ethical concerns raised by either of these two methods. [/FONT]
[FONT="]Discuss how electronic data interchange (EDI) and outsourcing each relates to a company’s cash collections and disbursements. [/FONT]
[FONT="]Identify the key variables that should be considered before purchasing any marketable securities. [/FONT]
[FONT="]Define the most common money-market instruments that a marketable securities portfolio manager would consider for investment. [/FONT]
[FONT="]Describe the three segments of the marketable securities portfolio and note which securities are most appropriate for each segment and why. [/FONT]
[FONT="]Chapter 10: Accounts Receivable and Inventory Management[/FONT]
[FONT="]List the key factors that can be varied in a firm’s credit policy, and understand the trade-off between profitability and costs involved. [/FONT]
[FONT="]Explain how the level of investment in accounts receivable is affected by the firm’s credit policies. [/FONT]
[FONT="]Critically evaluate proposed changes in credit policy, including changes in credit standards, credit period, and cash discount. [/FONT]
[FONT="]Describe possible sources of information on credit applicants and how you might use the information to analyze a credit applicant. [/FONT]
[FONT="]Identify the various types of inventories and discuss the advantages and disadvantages to increasing/decreasing inventories. [/FONT]
[FONT="]Define, explain, and illustrate the key concepts and calculations necessary for effective inventory management and control, including classification, economic order quantity (EOQ), order point, safety stock, and just-in-time (JIT). [/FONT]
[FONT="]Understand the sources and types of spontaneous financing. [/FONT]
[FONT="]Calculate the annual cost of trade credit when trade discounts are forgone. [/FONT]
[FONT="]Explain what is meant by “stretching payables” and understand its potential drawbacks. [/FONT]
[FONT="]Describe the various types of negotiated (or external) short-term financing. [/FONT]
[FONT="]Identify the factors that affect the cost of short-term borrowing. [/FONT]
[FONT="]Calculate the effective annual interest rate on short-term borrowing with or without a compensating balance requirement and/or a commitment fee. [/FONT]
[FONT="]Understand what is meant by factoring accounts receivable. [/FONT]
[FONT="]
Chapter 12: Capital Budgeting and Estimating Cash Flows[/FONT]
[FONT="]Define “capital budgeting” and identify the steps involved in the capital budgeting process. [/FONT]
[FONT="]Explain the procedure used to generate long-term project proposals within the firm. [/FONT]
[FONT="]Justify why cash, not income, flows are the most relevant to capital budgeting decisions. [/FONT]
[FONT="]Summarize in a “checklist” the major concerns to keep in mind as one prepares to determine relevant capital budgeting cash flows. [/FONT]
[FONT="]Define the terms “sunk cost” and “opportunity cost” and explain why sunk costs must be ignored, whereas opportunity costs must be included, in capital budgeting analysis. [/FONT]
[FONT="]Explain how tax considerations, as well as depreciation for tax purposes, affect capital budgeting cash flows. [/FONT]
[FONT="]Determine initial, interim, and terminal period “after-tax, incremental, operating cash flows” associated with a capital investment project. [/FONT]
[FONT="]Chapter 13: Capital Budgeting Techniques[/FONT]
[FONT="]Understand the payback period (PBP) method of project evaluation and selection, including its: (a) calculation; (b) acceptance criterion; (c) advantages and disadvantages; and (d) focus on liquidity rather than profitability. [/FONT]
[FONT="]Understand the three major discounted cash flow (DCF) methods of project evaluation and selection – internal rate of return (IRR), net present value (NPV), and profitability index (PI). [/FONT]
[FONT="]Explain the calculation, acceptance criterion, and advantages (over the PBP method) for each of the three major DCF methods. [/FONT]
[FONT="]Define, construct, and interpret a graph called an “NPV profile.” [/FONT]
[FONT="]Understand why ranking project proposals on the basis of the IRR, NPV, and PI methods “may” lead to conflicts in rankings. [/FONT]
[FONT="]Describe the situations where ranking projects may be necessary and justify when to use either IRR, NPV, or PI rankings. [/FONT]
[FONT="]Understand how “sensitivity analysis” allows us to challenge the single-point input estimates used in traditional capital budgeting analysis. [/FONT]
[FONT="]Explain the role and process of project monitoring, including “progress reviews” and “post-completion audits.” [/FONT]
[FONT="]Chapter 14: Risk and Managerial (Real) Options in Capital Budgeting[/FONT]
[FONT="]Define the “riskiness” of a capital investment project. [/FONT]
[FONT="]Understand how cash-flow riskiness for a particular period is measured, including the concepts of expected value, standard deviation, and coefficient of variation. [/FONT]
[FONT="]Describe methods for assessing total project risk, including a probability approach and a simulation approach. [/FONT]
[FONT="]Judge projects with respect to their contribution to total firm risk (a firm-portfolio approach). [/FONT]
[FONT="]Understand how the presence of managerial (real) options enhances the worth of an investment project. [/FONT]
[FONT="]List, discuss, and value different types of managerial (real) options. [/FONT]
[FONT="]Chapter 15: Required Returns and the Cost of Capital[/FONT]
[FONT="]Explain how a firm creates value, and identify the key sources of value creation. [/FONT]
[FONT="]Define the overall “cost of capital” of the firm. [/FONT]
[FONT="]Calculate the costs of the individual components of a firm’s overall cost of capital: cost of debt, cost of preferred stock, and cost of equity. [/FONT]
[FONT="]Explain and use alternative models to determine the cost of equity, including the dividend discount approach, the capital-asset pricing model (CAPM) approach, and the before-tax cost of debt plus risk premium approach. [/FONT]
[FONT="]Calculate the firm’s weighted average cost of capital (WACC) and understand its rationale, use, and limitations. [/FONT]
[FONT="]Explain how the concept of Economic Value Added (EVA) is related to value creation and a firm’s cost of capital. [/FONT]
[FONT="]Understand the capital-asset pricing model’s role in computing project-specific and group- specific required rates of return. [/FONT]
[FONT="]Chapter 16: Operating and Financial Leverage[/FONT]
[FONT="]Define operating and financial leverage and identify causes of both. [/FONT]
[FONT="]Calculate a firm’s operating break-even (quantity) point and break-even (sales) point. [/FONT]
[FONT="]Define, calculate, and interpret a firm’s degree of operating, financial, and total leverage. [/FONT]
[FONT="]Understand EBIT-EPS break-even, or indifference, analysis, and construct and interpret an EBIT-EPS chart. [/FONT]
[FONT="]Define, discuss, and quantify “total firm risk” and its two components, “business risk” and “financial risk.” [/FONT]
[FONT="]Understand what is involved in determining the appropriate amount of financial leverage for a firm. [/FONT]
[FONT="]Chapter 17: Capital Structure Determination[/FONT]
[FONT="]Define “capital structure.” [/FONT]
[FONT="]Explain the net operating income (NOI) approach to capital structure and the valuation of a firm, and calculate a firm’s value using this approach. [/FONT]
[FONT="]Explain the traditional approach to capital structure and the valuation of a firm. [/FONT]
[FONT="]Discuss the relationship between financial leverage and the cost of capital as originally set forth by Modigliani and Miller (M&M), and evaluate their arguments. [/FONT]
[FONT="]Describe various market imperfections and other “real world” factors that tend to dilute M&M’s original position. [/FONT]
[FONT="]Present a number of reasonable arguments for believing that an optimal capital structure exists in theory. [/FONT]
[FONT="]Explain how financial structure changes can be used for financial signaling purposes, and give some examples. [/FONT]
[FONT="]Chapter 18: Dividend Policy[/FONT]
[FONT="]Understand the dividend retention versus distribution dilemma faced by the firm. [/FONT]
[FONT="]Explain the Modigliani and Miller (M&M) argument that dividends are irrelevant. [/FONT]
[FONT="]Explain the counterarguments to M&M – that dividends do matter. [/FONT]
[FONT="]Identify and discuss the factors affecting a firm’s dividend and retention of earnings policy. [/FONT]
[FONT="]Define, compare, and justify cash dividends, stock dividends, stock splits, and reverse stock splits. [/FONT]
[FONT="]Define “stock repurchase” and explain why (and how) a firm might repurchase stock. [/FONT]
[FONT="]Summarize the standard cash dividend payment procedures and critical dates. [/FONT]
[FONT="]Define and discuss dividend reinvestment plans (DRIPs). [/FONT]
[FONT="]Chapter 19: The Capital Market[/FONT]
[FONT="]Understand the characteristics of the capital market and the difference between a primary and a secondary market. [/FONT]
[FONT="]Describe the three primary methods used by companies to raise external long-term funds – public issue, privileged subscription, and private placement. [/FONT]
[FONT="]Explain the role of investment bankers in the process of issuing new securities, including traditional underwriting, best efforts offering, shelf registration, and standby arrangements. [/FONT]
[FONT="]Calculate the theoretical value of a (subscription) right, and describe the relationships among the market price of the stock, the subscription price, and the value of the right. [/FONT]
[FONT="]Understand the Securities and Exchange Commission (SEC) registration process, including the role played by the registration statement, red herring, prospectus, and tombstone advertisement. [/FONT]
[FONT="]Understand the roles that venture capital and an initial public offering (IPO) play in financing the early stages of a company’s growth. [/FONT]
[FONT="]Discuss the potential signaling effects that often accompany the issuance of new long-term securities. [/FONT]
[FONT="]
Chapter 20: Long-Term Debt, Preferred Stock, and Common Stock[/FONT]
[FONT="]Understand the terminology and characteristics of bonds, preferred stock, and common stock. [/FONT]
[FONT="]Explain how the retirement (repayment) of bonds and preferred stock may be accomplished in a number of different ways. [/FONT]
[FONT="]Explain the differences between various types of long-term security in terms of claims on income and assets, maturities, security holders’ rights, and the tax treatment of income from the securities. [/FONT]
[FONT="]Discuss the advantages and disadvantages of issuing/buying the three different types of long- term securities from the perspective of both the issuer and the investor. [/FONT]
[FONT="]Chapter 21: Term Loans and Leases[/FONT]
[FONT="]Describe various types of term loans and discuss the costs and benefits of each. [/FONT]
[FONT="]Explain the nature and the content of loan agreements, including protective (restrictive) covenants. [/FONT]
[FONT="]Discuss the sources and types of equipment financing. [/FONT]
[FONT="]Understand and explain lease financing in its various forms. [/FONT]
[FONT="]Compare lease financing with debt financing via a numerical evaluation of the present value of cash outflows. [/FONT]
[FONT="]Chapter 22: Convertibles, Exchangeables, and Warrants[/FONT]
[FONT="]Describe the features of three common types of options that may be used by firms in their financing – the convertible security, the exchangeable bond, and the warrant. [/FONT]
[FONT="]Understand why securities with option features may be attractive for a firm’s long-term financing needs. [/FONT]
[FONT="]Explain the different terms used to express value for convertible securities – conversion value, market value, and straight-bond value. [/FONT]
[FONT="]Calculate the value of convertible securities, exchangeable bonds, and warrants, and explain why premiums over different values occur. [/FONT]
[FONT="]Understand the relationship between an option instrument and its underlying security. [/FONT]
[FONT="]
Chapter 23: Mergers and Other Forms of Corporate Restructuring[/FONT]
[FONT="]Explain why a company might decide to engage in corporate restructuring. [/FONT]
[FONT="]Understand and calculate the impact on earnings and on market value of companies involved in mergers. [/FONT]
[FONT="]Describe what merger benefits, if any, accrue to acquiring company shareholders and to selling company shareholders. [/FONT]
[FONT="]Analyze a proposed merger as a capital budgeting problem. [/FONT]
[FONT="]Describe the merger process from its beginning to its conclusion. [/FONT]
[FONT="]Describe different ways to defend against an unwanted takeover. [/FONT]
[FONT="]Discuss strategic alliances and understand how outsourcing has contributed to the formation of virtual corporations. [/FONT]
[FONT="]Explain what “divestiture” is and how it may be accomplished. [/FONT]
[FONT="]Understand what “going private” means and what factors may motivate management to take a company private. [/FONT]
[FONT="]Explain what a leveraged buyout is and what risk it entails. [/FONT]
[FONT="]Chapter 24: International Financial Management[/FONT]
[FONT="]Explain why many firms invest in foreign operations. [/FONT]
[FONT="]Explain why foreign investment is different from domestic investment. [/FONT]
[FONT="]Describe how capital budgeting, in an international environment, is similar to or dissimilar from that in a domestic environment. [/FONT]
[FONT="]Understand the types of exchange-rate exposure and how to manage exchange-rate risk exposure. [/FONT]
[FONT="]Compute domestic equivalents of foreign currencies given the spot or forward exchange rates. [/FONT]
[FONT="]Understand and illustrate purchasing-power parity (PPP) and interest-rate parity. [/FONT]
[FONT="]Describe the specific instruments and documents used in structuring international trade transactions. [/FONT]
[FONT="]Distinguish among countertrade, export factoring, and forfaiting. [/FONT]
