215003 FINANCIAL ACCOUNTING
Teaching Scheme: Examination Scheme:
Lecture: 3 Hrs/Week Theory : 100 marks
Unit I: Introduction:
Double entry accounting system, concepts and conventions in accounting, accounting
Journalization: Rules for journalization, posting in a ledger, trail balance, bank
Final Accounts: Preparation of Trading and Profit and Loss Account, Balance Sheet
Unit II: Tools of Financial Management:
Funds Flow Analysis: Concepts, Objectives, Techniques of Funds Flow Statement.
Ratio Analysis: Classification of Ratio, Structural group, Turnover group, Standards
for Comparison, Limitation of Ratio Analysis, Return on Investment an Integral
Cost –Volume-Profile Analysis: Mechanics of break-even Chart. Profit planning &
break-even analysis, Margin of Safety
Operating & Financial Leverage: Effects of Leverages on Variability of Earnings ,
Leverage & Financial Management.
Unit III: Financial Forecasting & Cash Management:
Financial Forecasting: Tools, Pro-Forma Financial statement, Cash budget,
Reconciliation of pro-forma financial statement & cash budget
Managing Cash: Inflow & outflow, investing surplus cash
Unit IV: Management of short Term Finance:
Working Capital Management, Accounts Receivable, Inventory, Banks & working
Capital Management of Term Loans: Raising the Loans, Term Loan Appraisal,
Security, Effective Negotiations.
Unit V: Allocation of Resources:
Capital Budgeting: Control of Capital Expenditure, Evaluation Process-Payback
approach, Accounting of Rate of Return , Present Value Method Vs Internal Rate of
Unit VI: Cost of Capital:
Relevant Cost, Measurement of Cost of Capital, Cost of Debt, Preference Shares,
Equity Shares Internal Financing, Dividends, Cost of Retained Earnings Concept
1. Management Accounting – A P Rao
2. Cost and management Accounting – Inamdar
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