SECOND SEMESTER 2023-24

Course Handout Part II

09-01-2024

In addition to part -I (General Handout for all courses appended to the time table) this
portion gives further specific details regarding the course.
Course No. : ECON F212
Course Title : FUNDAMENTALS OF FINANCE & ACCOUNTING
Instructor-in-charge : Thota Nagaraju ([email protected])
: Dr. Sunny Kumar Singh ([email protected])

1. Scope and Objective:

This course is an introduction to the reporting system used by businesses to convey
financial information to users external to the enterprise and the basics of financial
markets and financial management. In the first part of the course, primary emphasis will
be on understanding the financial reports that are the end products of the accounting
system- what they tell us about a business enterprise. The accounting principles,
conventions and concepts underlying financial reporting will be examined with the
objective of developing ability to interpret and analyze financial statements. The second
part will emphasize the financial markets; financial market reforms; primary and
secondary markets; sources of investment information; portfolio selection, preliminary
concepts of financial management etc.

Learning Outcomes
No At the end of the course, the student will be able to;

L01 Interpret, identify, classify elements of the financial accounting transactions and summarise it

L02 Construct classified Balance Sheet, Profit & Loss Account and Cash Flow Statements

L03 Measure, analyze, and evaluate the financial statements and business performance of a firm

L04 Understand behavior of cost and relationship between cost-volume-profits (CVP)

Course Objectives
No

C01 Demystify the components and elements of the financial statements.

C02 Learn to prepare financial statements from information and interpret transactions.

C03 Explain the tools and techniques of financial statement analysis.

C04 Examine the cost behavior and use of CVP for managerial decision making.

C05 Use capital budgeting techniques to analyse and make capital budgeting decisions.

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 2. Text Book

T1 Financial Accounting – A Managerial Perspective, R. Narayanaswamy, PHI, 5th edition, 2014.

T2 Accounting Text & Cases, Robert Anthony, David Hawkins, Kenneth Merchant, 13th edition,
2013 (For select cases & Management Accounting)
T3 Financial Markets and Institutions, Anthony Saunders and Marcia Cornett, McGraw Hill, 5th
Edition

*If you are not able to find a copy of Text Book, feel free to get any one of the three reference books mentioned
below.

Reference Book(s)

R1 Introduction to financial accounting Horngren, C. T., Sundem, G. L, Elliott, John A and Philbrick,
Donna R (). Introduction to financial accounting. 11th Edition, Prentice Hall.
R2 Financial Accounting: A Managerial Emphasis, Ashok Banerjee, Excel Books; 3rd Revised edition,
2009
R3 P. C. Tulsian, Financial Accounting, Tata McGraw Hill, latest edition
R4 Bhole, L.M.and Jitendra Mahakud, “Financial Institutions & Markets: Structure, Growth and
Innovations” Tata McGraw Hill, 5th edition, 2009

3 Course Plan: Study Modules and Learning Outcomes:

Module No Module Title Objectives Learning outcome (You should be No of
able to answer these questions after Sessions
the module)
1: Introduction to To understand Is accounting mere a historic 2
Preparation Accounting importance of financial record of transactions or can it
of Financial and management create value for business?
Statements accounting in business
as a source of value
creation
Generally To understand What is the philosophy behind 1
Accepted underlying principles of record keeping? Are there any
Accounting financial accounting guiding principles for transaction
Principles recording?
(GAAP)
Journal To learn the process of How do they record every small 3
recording business business transaction? Are there
transactions in first book any rules? Is there a scientific
of entry called ‘Journal’ method for recording
transactions?
Ledger To learn to classify The transactions can differ in 2
transactions recorded in type and nature. How do they
Journal using ‘ledger account for that?
posting’ process
Trial balance To learn to prepare ‘trial It must be difficult to go through 2
balance statement’ thousands of transaction records.
(using records from Can one just have a summary of

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 ledger) to get a transactions like a bird’s eye
summarize state of view?
business transactions
Final Accounts To learn the process of What is the result of all 4
preparation of ‘Profit transactions that took place
and Loss Account’ and during a year - profit or loss?
‘Balance Sheet’ using How much does the business own
summary of accounts and how much does it owe?
provided by trial balance
Cash flows To learn the process of Are you saying profit earned does 3
statement preparation of ‘Cash not equal cash earned? How are
Flow Statement’ using these two different? Does that
data supplied by mean there transactions that do
‘Income Statement’ and not involve cash?
‘Balance Sheet’

2. Financial Financial To learn to examine How efficiently is business being 4

Statements statement financial health of run? Is the financial position of
Analysis and Analysis and business by converting business healthy or critical? Is it
Interpretation Interpretations data exhibited in headed for insolvency? What
‘Income Statement’ and areas need immediate attention?
‘Balance Sheet’ into
useful information
Assessing To learn to identify How to deal with accounting 1
Quality of accounting red flags noise and biases while analysing
Financial wherein there is scope of final health of an organization
Reporting noise and bias due to (How to undo accounting
rigidity in accounting distortions)?
rules
3. Cost Cost To learn different cost Taking decisions on cost 1
Concepts and Accounting – concepts and objectives minimization versus revenue
Analysis Measuring and of cost accounting, maximization, what is the cost of
Analysing cost analyse cost behaviour, products and services? How to
of products and identify various cost take make or buy decisions,
Services drivers and learn to
prepare cost sheet.
Cost-volume- To learn to determine What is the minimum scale of 1
profit analysis optimal scale of business business that needs to be
operations for different achieved before it starts making
profit levels conditional profit? What scale needs to be
to cost structure of a achieved to earn a target profit
firm level?
Marginal / To learn to make How to decide when faced with 1
Differential decisions from short-run alternative choices?
Costing alternative choices using What is marginal / differential
management accounting cost?
information.
4 Introduction to To learn and examine Know the concepts and structure 1
Financial the structure of Indian of financial system – understand
System Financial System its components, functions and
effects.

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5 Determinants of To learn the determinants Know the demand and supply 3
Interest rates of Interest rates and its factors of interest rate, time value
and Interest impact on the security of money, PV, FV and annuities
rates and valuation and interest rate impact on bonds
Security and equity prices.
Valuation
6 Securities Money Markets To learn structure of short-term 2
Markets money markets,
instruments and participants.
Bond Markets To learn structure of different 2
bonds and
participants of bond markets.
Mortgage markets To learn structure of mortgage, 1
instruments and participants.
Stock Markets To learn long-term securities, 2
markets structure,
instruments and participants
and basics of Risk & Return
Foreign Exchange Rates To learn concepts and 2
mechanisms of Forex Market,
and exchange rate
determination
Derivatives securities To understand the nature of 2
markets derivative products such as
forwards, futures, options and
swaps.
7 Other Financial To learn structure Understand effect of short-term 2
Institutions insurance, investment money market on financial system.
banks, mutual funds,
hedge funds and pension
funds
Total Sessions 42

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 4. Evaluation Scheme:
Component Duration Weightage Date & Time Nature of
100%= 300 Component
Marks
Quizzes 10 15% Will be announced three CB
minutes = 45 Marks days prior on CMS
Group 20% Second week of April OB
Assignment/Simulations =60 Marks 2024
(Experiential Learning)
Mid Sem Test 90 30% 15/03 - 4.00 - CB
Minutes =90 Marks 5.30PM
Comprehensive 180 35% 17/05 AN CB
Minutes =105 Marks

*Note: No make-ups for the quizzes & Assignments.

All quizzes & assignments will be counted for final grade calculation.
Chamber Consultation Hour: Wednesday & Thursday 4:00 PM to 5:00 PM.
Group Assignment/simulation details will be shared on CMS by third week of February 2024. Assignment /
Simulation submission by the second week of April 2024 (Soft copy should be sent to
[email protected] Post due date submissions will not be considered for evaluation and the
entire group will be awarded zero marks in this component. Only 20 percent of the plagiarism is allowed and
thereafter for every 10 percent of additional plagiarism, one mark (or ten points) will be deducted.
Academic Honesty and Integrity Policy: Academic honesty and integrity are to be maintained by all the students
throughout the semester and no type of academic dishonesty is acceptable .

Instructor in Charge
ECON F212
INSTRUCTOR-IN-CHARGE

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