Certified Corporate Finance Analyst

TABLE OF CONTENT

Generational forms of Business

• Forms of Business Organization
• Proprietary Concerns
• Joint Stock Companies
• Co- Operative Organizations
• Public Enterprises
• Comparison of Different Forms of Organisations
• Market Value and Stock Prices versus Book Value

Organization Chart & Finance Function

• Functional Organization
• Product / Market Organization
• Line and Staff functions/Relationship/ Authority
• Functional and Line Authority
• The Concept of Finance

Finance Function-Organization, Objectives & Decisions

• Corporate Finance
• Corporate Finance & Other Functions
• Organization of the Finance Function
• Objectives of Financial Management
• Profit Maximization
• Wealth Maximization
• Other Finance Functions

Financial Statements, Analysis and Information

• Balance Sheet
• Profit and Loss Account
• Financial Statements-Analysis & Interpretation
• Comparatives Financial Statements
• Common Size Statements
• Projected Balance Sheet
• Statement of Changes in Financial Position(SCPP)
• Funds From Business Operations
• Statement of Changes in Total Resources

Cash Flow Statement

• Type of Cash Flow
• Actual Flow of Cash:
• Notional Cash Flow
• Notional outflow of cash
• Source of Cash Inflow
• Net Profit Method
• Outflow of Cash
• Changes in Current Accounts
• Change in Current Liabilities

Corporate Income Tax

• Personal Taxation and its Influence on Firm
• Deductibility of Expense
• Set-Off and Carry forward of Losses

Time Value of Money

• Simple Interest
• Future Value at Simple Interest
• Present Value
• Compound Interest
• For Series of Payments
• Future or Compound Value
• Present (or Discounted) Value
• Multi-period or Semi-annual and other compounding
• Net Present Value
• Internal Rate of Return
• Mathematical Derivation of Formula for Future/Compound Value of Annuity

The Financial Securities

• Equity Shares
• Features of Equity Shares
• Advantage of Equity shares
• Disadvantages of Equity Share
• Preference share
• Feature of Preference share
• Types of Preference Shares
• Advantage or Merits of Preference Share
• Disadvantages of Preference shares
• Debt Securities-Debentures or Bonds
• Features of Debentures or Bonds
• Types of Debentures
• Advantage of Debentures
• Disadvantages of Debentures
• Treasury Bills (T-Bills)

The Financial Markets

• Functions of Financial Markets
• Classification of Financial Markets
• Methods of Floatation
• Indian Capital Market Participants
• Scenario of Indian Capital Market
• Transaction cost in Capital Market

International Financial Markets

• International Financial System and Foreign Exchange Market
• Market Features of International Markets
• Euro Currency Market
• Functions of Eurocurrency Market
• Eurobond Market
• Brief Procedure in Eurobonds Issues

Financial Institutions

• Activities of UTI includes
• UTI Schemes
• Industrial Development Bank of India(IDBI)
• Major Schemes of IDBI
• Industrial Credit and Investment Corporation of India (ICICI)
• Industrial Finance Corporation of India (IFCI)
• Industrial Reconstruction Bank of India (IRBI)
• Industrial Investment Bank of India (IIBI)
• Insurance Companies
• General Insurance Corporation (GIC)
• Stock Holding Corporation of Indian Ltd.(SHCIL)
• Ratings
• Rating Factors
• Credit Rating and Information Services of India Ltd (CRISIL)
• Information and Credit Rating Agency (ICRA)
• Duff and Phelps

Interest Rates

• Role of Interest Rates
• Interest Rates and Share Prices
• Factors Influencing Interest Rates
• Rates in Gilt–edged Market
• Private and Government Bond Rates
• Rates of Borrowings and Leading by Commercial Bank
• Interest Rates on Small Saving
• Export Credit

Basic Valuation Model

• Bond Valuation
• Valuation of Preference Shares
• Stock Valuation
• Single Period Valuation Model
• Multi-period Valuation Model
• Zero Growth Model
• Constant Growth Model
• The P/E Ratio
• Market Efficiency

Risk

• Systematic or Non Diversifiable Risk
• Unsystematic or Diversifiable Risk
• Measures of Risk
• Rate of Return
• Probability Distribution
• Continuous Probability Distributions
• Standard Deviation of Return
• Risk Return Relationship
• Diversification and Risk
• Measurement of Portfolio Risk
• Beta
• Security Market Line

Investment Decision Rules

• Category of Investment Decision Rules
• Accounting Income-based Decision Rule
• Return on Capital
• Return on Equity
• Cash Flow-based Decision Rule
• Decision rule

Cash Flow

• Definition
• Need for Cash Flow Statement
• Discount Rates
• Estimation of Cash Flow
• Depreciation & Taxes
• Components of Cash Flow
• Initial investment
• Annual Net Cash Flows
• Terminal Cash Flows

Incremental Analysis

• Allocated Overheads
• Opportunity Costs
• Incidental Effects
• Sunk Costs

Break-Even Analysis

• Variable Costs
• Fixed cost
• Send-variable Cost
• Contribution Margin
• Strategies for Break-even Point
• Utility of the Break-even Analysis
• Shortcomings of the Break-even Analysis

Project Proposals

• Project Proposal Stage
• Tasks during Project Proposal Stage
• Change Management

Investment Decisions

• What are Capital Investment Decisions?
• Why is Capital Investment Decisions Important ?
• Growth
• Risk
• Types of Capital Investment Decisions
• Expansion and Diversification
• Replacement and Modernization
• Capital Investment Evaluation Criteria

Capital Budgeting Techniques

• Capital Budgeting
• Net present Value (NPV) Method
• Internal Rate of Return Method
• Profitability Index or Benefit-cost Ratio
• Payback Method
• Discounted Payback Period
• Accounting Rate of Return Method

Financial Structure - Capital

• Financing Decision
• Financial Structure
• Types of Capital
• Factor Affecting Financial Structure
• Agency Costs

Financial Distress - Remedial Options

• Financial Distress
• Reorganization
• Restructuring
• Merger
• Acquisition
• Takeover
• Defence Mechanisms

Corporate Restructuring Options

• Divestitures
• IPO Roll-Ups
• Going-Private Transactions
• Alternatives to the Corporate Form
• The Market for Corporate Control
• Synergistic Mergers
• Strategic Mergers and Acquisitions
• The Twenty-First Century
• Successful Merger
• Upon Completion

Cost of Debt

• Cost of Capital
• Cost of Debt
• Debt Issued at Per
• Debt Issued at Discount or Premium
• Cost of Term Loans

Cost of Capital

• Cost of Preference Capital
• Irredeemable Preference Share
• Redeemable preference shares
• Cost of Equity Capital
• Is Equity Capital Free of Cost
• Cost of Retained Earnings
• Zero-growth
• Cost of External Equity
• Realized Yield Approach
• Capital Assets Pricing Model Approach
• Bond Yield plus Premium Approach
• Weighted Average Cost of Capital
• Weight Marginal Cost of Capital
• Book-Value Vs, Market-Value Weights

Financial Leverage

• Leverage
• Measure of Leverage
• Application and Utility of the Financial Leverage
• Impact of Financial Leverage on Investor’s Rate of Return
• Financial Leverage and Risk
• EBIT-EPS Analysis

Dividend Policy

• Dividend Policy
• Dividend Decision
• Shareholders’ Expectations
• Financial Needs of the Company
• Constraints on Paying Dividends
• Stability of Dividends
• Constant Payout
• Danger of Stability of Dividends

Forms of Dividend

• Cash Dividends
• Bonus Shares
• Share Splits
• Reverse Split

Dividend Model & Its Decisions

• Dividend Decision
• Traditional Position
• Walter Model
• Gordon’s Dividend Capitalization Model
• Miller & Modigliani Position
• Rational Expectations Model

Financial Ratios

• Meaning of Ratio
• Types of Ratios
• Liquidity Ratios
• Activity Efficiency or Turnover Ratio
• Profitability in relation to Sales

Working Capital Management

• Components of Working Capital
• Constituents of Current Liabilities
• Significance of Working Capital
• The Cash Conversion Cycle
• Working Capital Policy
• Current Asset Policy
• Sources for Financing Working Capital
• Shares and Debentures
• Ploughing Back of Profits
• Loans fromm Financial Institutions
• Sources of Short term Working Capital
• Installment Credit
• Factoring or Accounts Receivable Credit
• Accrued Expenses
• Deferred Incomes
• Commercial Paper

Bank Credit

• Loans
• Cash Credit
• Overdraft
• Purchasing and Discounting of Bills
• Principles of Bank Financing
• Tandon Committee Report
• Maximum Permissible Bank Finance (MPBF):
• Chore Committee Report
• Credit Authorization Scheme

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