CA Final Advanced Financial Management (AFM) New Syllabus Study Material Compilation for May 2024 onwards

CA FINAL, CA Final G1, P2: Strategic Financial Management Leave a comment

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We are Sharing With You CA Final Advanced Financial Management (AFM) New Syllabus Study Material Compilation for May 2024 onwards Paper-2 : Advanced Financial Management (AFM) . So kindly Check Out our http://www.castudynotes.com website and ALL the Best for Your upcoming Exams.

CA STUDY NOTES

PAPER 2: ADVANCED FINANCIAL MANAGEMENT (100 MARKS)

Objective

To acquire the ability to apply financial management theories and techniques in strategic decision making.

Contents

I Financial Policy and Corporate Strategy

i Advanced role of CFO in various matters including Value Creation ii Strategic decision making frameworkiii Interface of Financial Policy and strategic management iv Balancing financial goals vis-à-vis sustainable growth

Risk Management

i Identification of types of Risk faced by an organisation ii Evaluation of Financial Risks

  1. Value at Risk (VAR)
  2. Evaluation of appropriate method for the identification and management of financial risk
Advanced Capital Budgeting Decisions

i Current trends in Capital Budgeting

  • Impact of Inflation on Capital Budgeting Decisions
  • Impact of change in technology on Capital Budgeting
  • Impact of change in Government Policies on Capital Budgeting ii Dealing with Risk in Investment Decisions

iii Internal and External Factors affecting capital budgeting decision iv Methods of incorporating risk in Capital Budgeting

  1. Adjusted Present Value
  2. Optimum Replacement Cycle
Security Analysis

i Fundamental Analysis ii Technical Analysis

  • Meaning
  • Assumptions
  • Theories and Principles
  • Charting Techniques – Basics
  • Efficient Market Hypothesis (EMH) Analysis iii Equity Research and tools available
Security Valuation

i Theory of Valuation ii Return Concepts

  1. Equity Risk Premium
  2. Required Return on Equity
  3. Discount Rate Selection in Relation to Cash Flows vi Approaches to Valuation of Equity Shares

vii Valuation of Preference Shares viii Valuation of Debentures/ Bonds

  1. Role and Responsibilities of Valuers
  2. Precautions need to be taken by a Valuer before accepting any valuation assignment
Portfolio Management

i Portfolio Analysis ii Portfolio Selectioniii Capital Market Theory iv Portfolio Revisionv Portfolio Evaluation vi Asset Allocation

  1. Fixed Income Portfolio
  2. Risk Analysis of Investment in Distressed Securities
  3. Alternative Investment Avenues
    • Real Estate
    • Gold
    • Private Equity
    • REITs
    • Hedge Funds
    • ETFs
    • Mutual Funds
    • Commodities
Securitization
  • Introduction
  • Concept and Definition iii Benefits of Securitization

iv Participants in Securitization v Mechanism of Securitization vi Problems in Securitization

  1. Securitization Instruments
  2. Pricing of Securitization Instruments
  3. Risks in Securitization x Tokenization

xi Securitization in India

Mutual Funds

i Meaning ii Typesiii Advantages and Disadvantages of Mutual Funds iv Evaluation of Mutual Fundsv Role of Fund Manager in Mutual Funds vi Hedge Fundsvii Role of FIIs in Mutual Funds

Derivatives Analysis and Valuation

i Introduction to Forwards, Futures and Options ii Futures Marketiii Pricing of Forwards and Futures iv Hedging using Futuresv Options

  • Option Pricing
  • Option Greeks
  • Exotic Options vi Credit Derivatives
  1. Real Options
  2. Derivative Mishaps and Lessons
  3. Swaps
  4. Commodity Derivatives xi Weather Derivatives

xii Electricity Derivatives

Foreign Exchange Exposure and Risk Management

i Factors affecting foreign exchange rate ii Role of SWIFT in Foreign Exchange

  1. National and International Payment Gateways

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  1. Exchange rate determination v Foreign currency market

vi Management of Foreign Exchange Risk

International Financial Management
  1. International Capital Budgeting
    • Offshore Investment Strategies vis-à-vis Domestic Capital Budgeting
    • Project vis-à-vis Parent Cash Flows
    • Discounting Rate and Adjusting Cash Flows
    • Adjusted Present Value
  2. Raising funds from International Sources iii Sovereign Funds
  3. International Financial Centre (GIFT City)
  4. International Working Capital Management
    • Multinational Cash Management
      • Objectives of Effective Cash Management
      • Optimization of Cash Flows/ Needs
    • Multinational Receivable Management
    • Multinational Inventory Management
Interest Rate Risk Management

i Benchmark Rates ii Interest Rate Riskiii Hedging Interest Rate Risk

  • Traditional Methods
    • Asset and Liability Management (ALM)
    • Forward Rate Agreement (FRA)
  • Modern Methods including Interest Rate Derivatives
    • Interest Rate Futures
    • Interest Rate Options
    • Swaps
    • Swaptions
Business Valuation

i Conceptual Framework of Valuation ii Approaches/ Methods of Valuation

  • Assets Based Valuation Model
  • Earning Based Models
  • Cash Flow Based Models
  • Measuring Cost of Equity
    • Capital Asset Pricing Model (CAPM)
    • Arbitrage Pricing Theory
    • Estimating Beta of an unlisted company
  • Relative Valuation
    • Steps involved in Relative Valuation
    • Equity Valuation Multiples
    • Enterprise Valuation Multiple
  • Other Approaches to Value Measurement
    • Economic Value Added (EVA)
    • Market Value Added (MVA)
    • Shareholder Value Analysis (SVA)
  • Arriving at Fair Value

iii Going concern and Non Going concern valuation iv Valuation of Distressed Companies

  1. Valuation of Start ups
  2. Valuation of Digital Platforms
  3. Valuation of Professional/ Consultancy Firms viii Impact of ESG on valuation
Mergers, Acquisitions and Corporate Restructuring

i Conceptual Framework ii Rationale

  1. Forms
  2. Mergers and Acquisitions
    • Financial Framework
    • Takeover Defensive Tactics
    • Reverse Merger v Divestitures
    • Partial Sell off
    • Demerger
    • Equity Carve outs
  3. Ownership Restructuring
    • Going Private
    • Management/ Leveraged Buyouts
  4. Unlocking the value through Mergers & Acquisitions and Business Restructuring viii Cross Border Mergers

ix Special Purpose Acquisition Companies (SPACs)

Startup Finance

i Introduction including Pitch Presentation ii Concept of Unicorniii Startup Initiative of GOI iv Sources of Fundingv Succession planning in Business

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