Managerial Economics & Financial Analysis

CVR College of Engineering

B.Tech. ELECTRONICS AND COMMUNICATION ENGINEERING

3rd Year 2nd Semester 


                                                                                                 L          T/P/D      C

                                                                                                                                                    4          -/-/-         4

(55023) MANAGERIAL ECONOMICS AND FINANCIAL ANALYSIS

 

Unit-I

Introduction to Managerial Economics:

Definition, Nature and Scope of Managerial Economics – Demand Analysis: Demand Determinants, Law of Demand and its exceptions.

 

Unit-II

Elasticity of Demand: Definition, Types, Measurement and Significance of Elasticity of Demand, Demand Forecasting, Factors governing demand forecasting, methods of demand forecasting (survey methods, statistical methods, expert opinion method, test marketing, controlled experiments, judgemental approach to demand forecasting).

 

Unit-III

Theory of Production and Cost Analysis: Production Function – Isoquants and Isocosts, MRTS , Least Cost Combination of Inputs, Cobb – Douglas Production function, Laws of Returns, Internal and External Economies of Scale.

Cost Analysis: Cost concepts, Opportunity cost, Fixed vs. Variable Costs, Explicit costs vs.  Implicit costs, Out of pocket costs vs. Imputed Costs. Break-even Analysis (BEA) – Determination of Break – Even point (simple problems) – Managerial Significance and limitations of BEA.

 

UNIT-IV:

Introduction to Markets & Pricing Policies:

Market Structures: Types of competition, Features of Perfect competition, Monopoly and Monopolistic Competition, Price – Output Determination in case of Perfect Competition and Monopoly.

Objectives and Policies of Pricing – Methods of Pricing: Cost Plus Pricing, Marginal Cost Pricing, Sealed Bid Pricing, Going Rate Pricing, Limit Pricing, Market Skimming Pricing, Penetration Pricing, Two-part Pricing, Block Pricing, Bundling Pricing, Peak Load Pricing, Cross Subsidization.

 

UNIT-V:

Business & New Economic Environment: Characteristics features of Business, Features and Evaluation of Sole Proprietorship, Partnership, Joint Stock Company, Public Enterprises and their types. Changing Business Environment in Post – Liberalization scenario.

 

UNIT-VI:

Capital and Capital Budgeting: Capital and its significance, Types of Capital, Estimation of Fixed and Working capital requirements, Methods and sources of raising finance.

Nature and Scope of capital budgeting, features of capital budgeting proposals, Methods of Capital Budgeting: Payback Method, Accounting Rate of Return (ARR) and Net Present Value Method (simple problems).

 

UNIT-VII:

Introduction to Financial Accounting: Double – Entry Book Keeping, Journal, Ledger, Trial Balance – Final Accounts (Trading Account, Profit and Loss Account and Balance Sheet with simple adjustents).

 

 

UNIT-VIII:

Financial Analysis through Ratios: Computation, Analysis and Interpretation of Liquidity Ratios (Current Ratio and quick ratio), Activity Ratios (Inventory turn over ratio and debtor Turnover ratio), Capital structure Ratios (Debt – equity ratio, Interest Coverage ratio), and Profitability ratios (Gross Profit ratio, Net Profit ratio, Operating Profit ratio, P/E Ratio and EPS).

 

TEXT BOOKS:

1.      Aryasri: Managerial Economics and Financial Analysis, TMH, 2009.

2.      Varshney & Maheshwari: Managerial Economics, Sultan Chand, 2009.

 

REFERENCES:

1.      Raghunatha Reddy & Narasimhachary: Managerial Economics & Financial Analysis, Scitech, 2009.

2.      V. Rajasekarn & R. Lalitha, Financial Accounting, Pearson Education, New Delhi, 2010.

3.      Suma Damodaran, Managerial Economics, Oxford University Press, 2009.

4.      Domnick Salvatore: Managerial Economics in a Global Economy, 4th edition, Cengage, 2009.

5.      Subhash Sharma & M P Vittal, Financial Accounting for Management, Text & Cases, Machmillan, 2008.

6.      S. N. Maheswari & S. K. Maheswari, Financial Accounting, Vikas, 2008.

7.      Truet and Truet: Maganerial Economics: Anlaysis, Problems and Cases, Wiley, 2009.

8.      Dwivedi: Managerial Economics, Vikas, 2009.

9.      M. Kasi Reddy, S. Saraswathi: Managerial Economics and Financial Accounting, PHI, 2007.

10.   Erich A. Helfert: Techniques of Financial Analysis, Jaico, 2007.

 

Prerequisites: Nil

 

Objective: To explain the basic principles of managerial economics, accounting and current business environment underlying business decision making.

 

Code/Tables: Present Value Tables need to be permitted into the examinations hall.

 

Question Paper Pattern: 5 questions to be answered out of 8 questions.

 

Out of eight questions 4 questions will be theory questions and 4 questions should be problems.

Each question should not have more than 3 bits.

 

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