THAPAR UNIVERSITY, PATIALA

SCHOOL OF HUMANITITES & SOCIAL SCIENCES

DSS 004: Financial Analysis
L T P Cr.
4 0 0 4
OBJECTIVES
Building an understanding of concepts, vital tools and techniques applicable for
financial decision-making by a business firm, also making students Conversant
with the concept corporate tax planning and familiarize them with Indian tax laws
and their implications corporate management.
Exploring research dimensions in finance
COURSE CONTENTS
Introduction to Financial Management: Financial Objectives; Impact of Financial and
Economical Environment on Financial Management; Time Value of Money concept,
Computation of EMI, Annuity, Annuity Due; Cost concepts ; Tax Planning.
Security Market and Portfolio Management: The Investment Decision Process; Risk
and Return; Introduction to Portfolio Theory; Diversification and Risk; Markowitz
and Efficient Frontier; Asset Pricing Models; The Capital Asset Pricing Model
(CAPM);Security Market Line; Arbitrage Pricing Theory; Other Multifactor
Models; Various Forms of Efficient Markets; Tests and Implications of Various
Efficiency Levels; Fixed Income Securities; Pricing and Valuation; Valuation of
Equity;
Derivatives: The fundamentals of forward and futures contract, option contracts and
swaps; Credit Derivatives; Value at Risk.
Behavioural finance: Financial Decision Making, The Expected Utility Rule, Expected
Utility Theory: Simple But Untrue?; Noise Traders: Can Investors Get Emotional?
Overconfidence and Optimism. Do Investors Trade Too Much? Asset Pricing under
Prospect Theory; the Basics of Prospect Theory, Does Prospect Theory Work?;
Overreaction and/or Under reaction; Insider Trading; The Market for Information,
Noise and Deception.
Corporate Restructuring and Governance: Expansion, Downsizing and Restructuring,
Objectives & Motivations of Mergers, Takeovers, Acquisitions & Demergers.
Concept, Role of the Shareholders, Directors, CEO, Managers, and Employees.
Management: Performance, Nature of Corporate Governance, Reasons for Corporate
Governance, Key challenges and opportunities facing corporate leaders today; emerging
issues in Finance
Text Books
1. Van Horne, James, C (2002). Principles of Financial Management, Pearson
2. Brigham. Eugene F. and Houston. Joel F. (2006). Fundamentals of Financial
Management, 10th Edition, Cengage Learning

3. Pandey, I. M., Financial management, Vikas Publishing House Pvt. Ltd., Noida,
2011, 12th ed.
Lakhotia, R.N.: Corporate Tax Planning, Vision Publication, Delhi.
4. Elton, Edwin J. and M.J.Gruber(2007),Modern Portfolio Theory and Investment
Analysis, 7th Edition, John Wiley and Sons.
5. Behavioural Finance (2009), William Forbes, John Wiley & Sons
6. Hull, John C. Introduction to Futures & Options Prentice Hall
7. Darryl Reed, Sanjoy Mukherjee , (2009) Corporate Governance, Economic
Reforms, and Development The Indian Experience , Oxford University Press.
8. Arzac R. Enrique, Valuation for Mergers, Buyout and Restructuring, John Wiley
& Sons Inc., 2005