Syllabus Engineering Economics and Financial Management - (402050D) Credits Examination Scheme Theory 3 In-Semester 30 Marks Tutorial End-Semester 70 Marks Unit 1 Introduction to Business and Economics Business : Structure of Business Firm, Theory of Firm, Types of Business Entities, Limited Liability Companies, Sources of Capital for a Company, Non-Conventional Sources of Finance. Economics : Significance of Economics, Micro and Macro Economic Concepts, Various terms and Concepts, Importance of National Income, Inflation, Money Supply in Inflation, Factors of Production, Business Cycle, Features and Phases of Business Cycle. Nature and Scope of Business Economics, Role of Business Economist, Multidisciplinary nature of Business Economics. Market Structures : Nature of Competition, Features of Perfect competition, Monopoly, Oligopoly, Monopolistic Competition. Demand and Supply : Elasticity, Types of Elasticity, Law of Demand, Measurement and Significance of Elasticity of Demand, Factors affecting Elasticity of Demand, Elasticity of Demand in decision making, Demand Forecasting : Characteristics of Good Demand Forecasting, Steps in Demand Forecasting, Methods of Demand Forecasting. Determinants of Supply, Supply Function & Law of Supply. Utility and Laws of returns. (Chapter - 1) Unit 2 Costs and Cost Accounting Costs : Standard cost, estimated cost, First cost, Fixed cost, Variable cost, Incremental cost, Differential cost, Sunk and marginal cost, Cost curves, Breakeven point and breakeven chart, Limitations of breakeven chart, Interpretation of breakeven chart, margin of safety, Angle of incidence and multi product break even analysis, Cost Output Decision and Estimation of Cost, Zero Based Costing and numerical. Cost Accounting : Objectives of cost accounting, elements of cost : material cost, labor cost and expenses, allocation of overheads by different methods, Costing based on direct and indirect costs, Overheads apportionment and absorption, Different Models of Depreciation. Numerical on costing. Pricing : Contribution, P/V-ratio, profit-volume ratio or relationship, Types of Pricing, Pricing policies, Pricing methods, Product Life Cycle based Pricing, Price fixation, depreciation and methods of calculating depreciation. (Chapter - 2) Unit 3 Financial Accounting Accounting, Cost accounting & Management accounting, Various types of business entities, Accounting principles, postulates & meaning of accounting standards, Accounting cycle, Capital and revenue, Revenue, Expenses, Gains & Losses, Types of accounts & their rules, Journal Entries Create ledger, Preparation of Trial Balance, Finalizations, Preparation of Trading & Profit & Loss account, Understanding of Assets & Liabilities. Balance sheet and related concepts - Profit & Loss Statement and related concepts, Financial Ratio Analysis, Cash flow analysis, Funds flow analysis, Comparative financial statements, Analysis & Interpretation of financial statements, Concept of Ratio Analysis, Preparation of Balance sheet (numerical). Investments : Risks and return evaluation of investment decision, Average rate of return, Payback Period, Net Present Value, Internal rate of return. (Chapter - 3) Unit 4 Budget and Budgetary Control Budgeting and Budgetary Control : Concept of budget, Types and classification of budgets, Advantages and limitations, Methods of budgeting. Budgetary Control : objectives, merits and limitations, Budget administration. Functional budgets. Fixed and flexible budgets, Installation of Budgetary Control System, Zero base budgeting, Taxes and Financial Planning, Impact of Taxation and Inflation on Financial Management. (Chapter - 4) Unit 5 International Business and Finance Concept of globalization, factors influencing globalization, concept of international business and motives, international trade, institutional framework in international business, the significance of foreign trade policy, export-import procedures. Definition and function of money, Qualities of a good money, classification of money, value of money, index numbers, appreciation and depreciation of money, Gresham’s Law and its limitations, Theory of exchange, barter, stock exchange, Speculation Taxation and Insurance. Balance of Trade and Balance of Payments, Barriers to Trade, Benefits of Trade/Comparative Advantage, Foreign Currency Markets/Exchange Rates, Monetary, Fiscal and Exchange rate policies, Economic Development. (Chapter - 5) Unit 6 Entrepreneurial Finance Sources of Funds for Entrepreneurs and Start Ups : Entrepreneurial Finance Vs. Corporate Finance; Traditional Sources of Funds, Early-Stage Sources of Funds - Incubators, Accelerators, Crowd Funding, Business Angels, Mezzanine Funds, Venture Capitals, Private Equity, LBO, Funding Process - Deal Sourcing, Deal Negotiation, Deal Agreement, Term Sheet. Investment Decisions for Start Ups : Time Value of Money, Types of Investment Decisions, Capital Budgeting Process - Investment Evaluation, Risk Analysis in Capital Budgeting - Risk Adjusted Discount Rate, Certainty Equivalent, Decision Tree, Sensitivity Analysis, Scenario Analysis. Valuation and Measurement of Financial Performance : Pre Money and Post Money Valuation, Factors Influencing Valuation, Valuation Methods, Dilution and Valuation of Equity, Metrics used for Performance Evaluation, Harvesting-Exit Strategies. (Chapter - 6)
