JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY HYDERABAD

Course Objective:

• To enable understanding of various aspects in Financial Analytics.
• To help understand time value money, risk and return aspects.
• To impart knowledge of various capital budgeting techniques.
• To elucidate various aspects of Equity Valuation.
• To enlighten on the aspects of Bond Valuation.

Course Outcome

Students will be able to:

• Understand techniques of financial statements.
• Learn the relevance of time value money.
• Learn various aspects of capital budgeting.
• Understand industry, technical and economic analysis.
• Learn duration of bond and immunization strategies.

UNIT - I: Techniques of Financial Statement

Horizontal, Vertical Analysis, Trend Analysis, Ratio

Analysis, Liquidity, Profitability, Solvency and Turnover Ratio, Valuation of Ratios, Statement of Cash Flow, Classification of Cash Flow, Computing Net Cash Flow: Operating, Investing and Financing Activities. Reporting and Interpretation using Spreadsheet.

UNIT - II: (a) Time Value of Money

Future Value: Simple, Compound Interest and Annuity, Present

Value: Discounted, Annuity, Equated Loan Amortization, Perpetuity using Spreadsheets.

• (b) Risk and Return: Holding Period Returns, Arithmetic Mean vs Geometric Mean, Risk: Standard Deviation, Coefficient of Variation, Beta, Covariance of Stock.

UNIT - III: Capital Budgeting Techniques

Payback Period, Accounting Rate of Return, Net Present

Value, Internal Rate of Return, Profitability Index, Decision Tree, Cash Flow in Capital Budgeting, Cost of Capital, Advance Capital Budgeting Techniques, Adjusted Present Value Approach, Competing Project Risk using Spreadsheets.

UNIT - IV: Equity Valuation

Calculation of Portfolio Mean and Variance, Capital Asset Pricing Model

(CAPM), Variance: Covariance Matrix, Estimating Beta and Security Market Line. Industry Analysis, Economic Analysis and Technical Analysis in Stock, Real Option in Capital Budgeting.

UNIT - V: Bond Valuation

Duration, Duration of Bond with Uneven Payments, Immunization Strategies,

Modeling the Term Structure, Calculating Expecting Bond Return in a Single and Multi-period Framework, Semi-annual Transition Matrix, Computation of Bond Beta.

Suggested Readings:

• Sheeba Kapil, Financial Valuation and Modeling, Wiley, 1e,2022.
• R. Narayanaswamy, Financial Accounting-Managerial Perspective, PHI,7e,2022.
• Timothy Mayes, Financial Analysis with MS Excel, Cengage, 7e, 2013.
• N R Parasuraman, Financial Management-step by step approach, Cengage, 1e,2014.
• Simon Bennings, Financial Modeling-Using Excel, MIT Press, Camberidge,3e
• Vijay Gupta, Financial Analysis using Excel, VJ Books Inc, Canada.  47 MBA HUMAN RESOURCES ELECTIVE