mefa.pdf - Geethanjali College Of Engineering And Technology Department of Management Studies COURSE SUBJECT FILE Managerial Economics Financial

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Unformatted text preview: Geethanjali College Of Engineering And Technology Department of Management Studies COURSE & SUBJECT FILE Managerial Economics & Financial Analysis COMMON TO ALL BRANCHES 2015-16 Academic Year CONTENTS REQUIRED FOR SUBJECT FILE 1. Cover Page 2. Syllabus copy 3. Vision of the Department 4. Mission of the Department 5. PEOs and POs 6. Course objectives and outcomes 7. Brief note on the importance of the course and how it fits into the curriculum 8. Prerequisites, if any 9. Instructional Learning Outcomes 10. Course mapping with Programme Outcomes 11. Class Time Table 12. Individual Time Table 13. Lecture Schedule with methodology being used/adopted 14. Detailed notes 15. Additional/missing topics 16. University previous Question papers 17. Question Bank 18. Assignment Questions 19. Unit wise Quiz Questions and long answer questions 20. Tutorial problems 21. Known Gaps, if any and inclusion of the same in lecture schedule 22. Discussion topics, if any 23. References, Journals, websites and E-links, if any 24. Quality Measurement Sheets (a) Course end survey (b) Teaching Evaluation 25. Students List 26. Group-Wise students list for discussion topics <<<>>> 1. COVER PAGE Geethanjali College Of Engineering And Technology Department of Management Studies Name of the Subject: Managerial Economics & Financial Analysis JNTUH CODE:________________________________________Programme : UG Branch: Year: common to all Version No : II & III B.Tech Semester: 01 Updated on :01-05-2015 I & II No. of pages :220 Classification status (Unrestricted / Restricted ) Distribution List : Prepared by : 1) Name K.Naupal Reddy 2) Mr. P Upender 2) Sign : 2) Sign : 3) Design : Asst.Professor 3) Design :Asst.Professor 4) Date :28-11-2015 Verified by : 4) Date * For Q.C Only. 1) Name : 1) Name : 2) Sign : 2) Sign : 3) Design : 3) Design : 4) Date : Approved by : (HOD ) 1) Name : 4) Date : 2) Sign : 3) Date : 2. SYLLABUS COPY JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY HYDERABAD 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. 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, judgmental approach to demand forecasting) Unit II: 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 III : Introduction to Markets & Pricing Policies: ket 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. Business & New Economic Environment: Characteristic 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 IV : 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 V : Introduction to Financial Accounting: Double-Entry Book Keeping, Journal, Ledger, Trial BalanceFinal Accounts (Trading Account, Profit and Loss Account and Balance Sheet with simple adjustments). Financial Analysis through ratios: Computation, Analysis and Interpretation of Liquidity Ratios (Current Ratio and quick ratio), Activity Ratios (Inventory turnover ratio and Debtor Turnover ratio), Capital structure Ratios (Debt- Equity ratio, Interest Coverage ratio), and Profitability ratios (Gross Profit Ratio, Net Profit ratio, Operating Ratio, P/E Ratio and EPS). TEXT BOOKS: 1. Aryasri: Managerial Economics and Financial Analysis, 2/e, TMH, 2005. 2. Varshney & Maheswari: Managerial Economics, Sultan Chand, 2003. 3. S A Siddhiqui &AS Siddhiqui , Managerial Economics and Financial Analysis, New Age international publishers 2013. 4. M. Kasi Reddy & Saraswathi, Managerial Economics and Financial Analysis ,PHI New Delhi 2012. REFERENCES: 1. Ambrish Gupta, Financial Accounting for Management, Pearson Education, New Delhi. 2. H. Craig Peterson & W. Cris Lewis, Managerial Economics, PHI, 4th Ed. 3. Suma Damodaran, Managerial Economics, Oxford University Press. 4. Lipsey & Chrystel, Economics, Oxford University Press.. 6. Domnick Salvatore: Managerial Economics In a Global Economy, 4th Edition, Thomson. 7. Narayanaswamy: Financial Accounting—A Managerial Perspective, PHI. 8. Raghunatha Reddy & Narasimhachary: Managerial Economics& Financial Analysis, Scitech. 9. S.N.Maheswari & S.K. Maheswari, Financial Accounting, Vikas. 10. Truet and Truet: Managerial Economics:Analysis, Problems and Cases, Wiley. 11. Dwivedi:Managerial Economics, 6th Ed., Vikas. Prerequisites: Nil Objective: To explain the basic principles of managerial economics, accounting and current business environment underlying business decision making. Codes/Tables: Present Value Tables need to be permitted into the examinations Hall. Question Paper Pattern: 5 Questions to be answered out of 8 questions. Each question should not have more than 3 bits. 3. VISION OF THE INSTITUTION AND DEPAERTMENTS VISION OF THE INSTITUTION: Geethanjali visualizes dissemination of knowledge and skills to students, who would eventually contribute to the well being of the people of the nation and global community. 4. MISSION OF THE INSTITUTION AND DEPAERTMENTS MISSION OF THE INSTITUTION: Our mission is to become a high quality premier educational institution, to create technocrats, by ensuring excellence, through enriched knowledge, creativity and self development. VISION OF THE DEPARTMENT OF CSE & IT : To produce globally competent and socially responsible computer science engineers contributing to the advancement of engineering and technology which involves creativity and innovation by providing excellent learning environment with world class facilities. MISSION OF THE DEPARTMENT OF CSE & IT: 1. To be a center of excellence in instruction, innovation in research and scholarship, and service to the stake holders, the profession, and the public. 2. To prepare graduates to enter a rapidly changing field as a competent computer science engineer. 3. To prepare graduate capable in all phases of software development, possess a firm understanding of hardware technologies, have the strong mathematical background necessary for scientific computing, and be sufficiently well versed in general theory to allow growth within the discipline as it advances. 4. To prepare graduates to assume leadership roles by possessing good communication skills, the ability to work effectively as team members, and an appreciation for their social and ethical responsibility in a global setting. 5. PEOS AND POS OF DEPARTMENTS: PROGRAM EDUCATIONAL OBJECTIVES (PEOs) OF C.S.E. DEPARTMENT 1. To provide graduates with a good foundation in mathematics, sciences and engineering fundamentals required to solve engineering problems that will facilitate them to find employment in industry and / or to pursue postgraduate studies with an appreciation for lifelong learning. 2. To provide graduates with analytical and problem solving skills to design algorithms, other hardware / software systems, and inculcate professional ethics, inter-personal skills to work in a multi-cultural team. 3. To facilitate graduates to get familiarized with the art software / hardware tools, imbibing creativity and innovation that would enable them to develop cutting-edge technologies of multidisciplinary nature for societal development. PROGRAM OUTCOMES (POs) OF C.S.E. DEPARTMENT PEO 1. Graduates will excel in professional career and/or higher education by acquiring knowledge in Mathematics, Science, Engineering principles and Computational skills. PEO 2. Graduates will analyze real life problems, design Electrical systems appropriate to the requirement that are technically sound, economically feasible and socially acceptable. PEO 3.Graduates will exhibit professionalism, ethical attitude, communication skills, team work in their profession, adapt to current trends by engaging in lifelong learning and participate in Research & Development. 6. COURSE OBJECTIVES AND OUTCOMES Introduction: It is of immense pleasure to learn, understand & practice fundamentals of economics in-view of tremendous growth in early 19th century, as an ample attitude of individuals, mangers, directors & corporate entities who tried to substantiate the subject matter of economics with finance & accountancy in early 21st century to find the workable-solutions for enormous problems that are encountered due to fluctuations in business cycles. As India is not exception, when global waves tending towards recession, India also triggered towards anti-recession tools of sustainable growth & all-round economic development through a lead in indigenous technology by using local resources as directed by Mahatma Gandhi. This situation in the economy motivated universities/institutions to provide the similar knowledge to young technocrats, who are the erectors of New India(Bharat Nirman) at source level of entrepreneurs, to achieve better out of best through efficient and effective utilisaiton of managerial resources 5Ms(men, machines, methods, money & materials). Hence Managerial Economics & Financial Analysis probes into all-round business analysis. Course Objectives: To identify the objectives, nature, scope, role & responsibilities of a manager of a business undertaking. To apply the knowledge of demand, demand elasticity & demand forecasting by using statistical techniques for any hypothetical enterprise. To explain production function relation, law of variable proportion, returns of scale, producer equilibrium, economies of scale, and To explain the relevance of cost behaviour analysis & costs that are useful for managerial decision making and Break Even Point(BEP) of an enterprise. To differentiate & distinguish price and output decisions in different market structures i.e., perfect, monopoly, monopolistic & Oligopoly competition. To compare & contrast the differences between private & public sector undertakings in their features, objectives, scope, merits, uses & limitations in functioning. To know the objectives behind financial, economic, taxation, industrial & licensing policies of GOI in the way of liberalization, privatization & globalization concepts. To know the meaning, importance, sources, & uses of capital in an enterprise and to estimate the working capital requirements. To know the meaning, importance, steps, methods, uses & limitations of Capital Budgeting Analysis and rank various projects under Pay Back, ARR, NPV, PI & IRR methods. To identify & explain the process & principles of accounting and to maintain Journal, Ledger, Trial Balance, Manufacturing A/c, Trading A/c., Profit & Loss A/c. and Balance Sheet of any business undertaking. To interpret, analyze, discuss & comment on the financial performance of a business unit through liquidity leverage, coverage, turnover & profitability ratios. Course Outcomes: Determine the objectives, nature, scope, role & responsibilities of a manager of a business undertaking. Predict the demand for a product or product mix of a company & to analyze various factors influencing demand elasticity. Forecast & compute the future sales level of a product by using various quantitative & qualitative techniques and with the help of past sales data. Examine optimum production & cost functions with the help of mathematical equations & by developing graphical solutions through linear programming applications. Assess the cost behaviour, costs useful for managerial decision making and determine Break Even Point (BEP) of an enterprise. Discuss the concept of equilibrium price and output in different market situations i.e., perfect, monopoly, monopolistic & Oligopoly competition with the help of graphs. Differentiate private & public sector undertakings in their promotion, incorporation, regulation, administration, legal formalities & existence. Critically evaluate the policies of GOI in light of liberalization, privatization & globalization concepts. Outline the steps, methods & sources of raising capital by business undertaking. List features, steps, merits, uses & limitations of Pay Back, ARR, NPV, PI & IRR methods of Capital Budgeting and compute rank of the projects. Discuss the process & principles of accounting and prepare Journal, Ledger, Trial Balance, Manufacturing A/c, Trading A/c., Profit & Loss A/c. and Balance Sheet of an enterprise. Analyze, interpret & comment on the financial statements of a business enterprise by using liquidity leverage, coverage and turnover & profitability ratios. PEO & PO Matrix: PEOs/POs I II III 1 - 2 - 3 X 4 - 5 - 6 X X 7 X X 8 - 9 - 10 X X 11 X - 12 X 13 - 14 - Course Objective & Outcome Matrix: PEOs/POs 1 2 3 4 5 6 7 8 1 - 2 - 3 - 4 - 5 - 6 @@@ 7 - 8 - 9 - 10 - 11 - 12 - 13 - 14 - ASSESSMENT OF LEARNING OUTCOMES FOR SUBJECT Managerial Economics & Financial Analysis CAY : 2015-16 SEM : ☐ODD ☐EVEN Date : SUBJECT Managerial Economics & Financial Analysis Year : ☐I ☐II ☐III ☐IV FACULTY K.Naupal Reddy , Mr . P. Upender CAY: CURRENT ACADEMIC YEAR LEARNING OUTCOMES FOR ‘MANAGERIAL ECONOMICS AND FINANCIAL ANALYSIS’ Determine the objectives and able to know the nature and scope of Managerial Economics. Predict the demand of products and services by using different methods. Examine Optimum Production, economies of scale, production, production functions, optimum size of the firm, cost, cost behavior and Break Even Point. Gain knowledge on price and market structure, behavior of consumer and producer under competitive market situations. Differentiate the types of business organizations and cope the methodology involved in their establishment. Outline the steps, methods & sources of raising capital by business undertaking. Discuss the process & principles of accounting and prepare Journal, Ledger, Trial Balance, Manufacturing A/c, Trading A/c., Profit & Loss A/c. and Balance Sheet of an enterprise Analyze, interpret & comment on the financial statements of a business enterprise by using liquidity leverage, coverage and turnover & profitability ratios. PLEASE EVALUAE ON THE FOLLOWING SCALE: Excellent(E) Good(G) Average(A) Poor(P) No Comment(NC) 5 4 3 2 1 S No QUESTIONNAIRE E G A P NC 5 4 3 2 GENERAL OBJECTIVES: 1) Has the course achieved its stated objectives? ☐ ☐ ☐ ☐ ☐ 2) Have you gained the stated skills? ☐ ☐ ☐ ☐ ☐ 3) Whether the syllabus is adequate to achieve the objectives? ☐ ☐ ☐ ☐ ☐ 4) Whether the teacher has helped in acquiring the stated skills? ☐ ☐ ☐ ☐ ☐ 5) Whether the teacher has given different live examples to understand the concepts? ☐ ☐ ☐ ☐ ☐ SPECIFIC LEARNING OUTCOMES: 6) Have you gained knowledge on nature, scope and objectives of M.E.? ☐ ☐ ☐ ☐ ☐ 7) Have you gained knowledge on concept of demand, elasticity and forecasting? ☐ ☐ ☐ ☐ ☐ 8) Have you got an idea about economies of scale, optimum size of the firm? ☐ ☐ ☐ ☐ ☐ 9) Are you able to understand different market structures & Pricing methods? ☐ ☐ ☐ ☐ ☐ 10) Have you gained knowledge on different types of business organizations? ☐ ☐ ☐ ☐ ☐ 1 11) Have you understood the concept of capital, working capital and determination of WC and capital budgeting? ☐ ☐ ☐ ☐ ☐ 12) Have you gained knowledge on principles and process of accounting and can you prepare a trial balance, P&L A/c and balance sheet? ☐ ☐ ☐ ☐ ☐ 13) Are you able to assess the company financial status with the help of ratios? ☐ ☐ ☐ ☐ ☐ SATISFICATION LEVEL: 14) Are you satisfied with the outcomes achieved through this course? 15) If your answer is No, please indicate your preferences: a) b) c) d) More inputs, additional contents, real life examples More Experienced & Capable Teacher ☐YES ☐NO ☐YES ☐NO ☐YES ☐NO 7. BRIEF NOTE ON THE IMPORTANCE OF THE COURSE: Economics is a study of human activity both at individual and national level. The economists of early age treated economics merely as the science of wealth. The reason for this is clear. Every one of us in involved in efforts aimed at earning money and spending this money to satisfy our wants such as food, Clothing, shelter, and others. Such activities of earning and spending money are called “Economic activities”. It was only during the eighteenth century that Adam Smith, the Father of Economics, defined economics as the study of nature and uses of national wealth’. Dr. Alfred Marshall, one of the greatest economists of the nineteenth century, writes “Economics is a study of man’s actions in the ordinary business of life: it enquires how he gets his income and how he uses it”. Thus, it is one side, a study of wealth; and on the other, and more important side; it is the study of man. As Marshall observed, the chief aim of economics is to promote ‘human welfare’, but not wealth. The definition given by AC Pigou endorses the opinion of Marshall. Pigou defines Economics as “the study of economic welfare that can be brought directly and indirectly, into relationship with the measuring rod of money”. Prof. Lionel Robbins defined Economics as “the science, which studies human behaviour as a relationship between ends and scarce means which have alternative uses”. With this, the focus of economics shifted from ‘wealth’ to human behaviour’. Lord Keynes defined economics as ‘the study of the administration of scarce means and the determinants of employments and income”. Microeconomics The study of an individual consumer or a firm is called microeconomics (also called the Theory of Firm). Micro means ‘one millionth’. Microeconomics deals with behavior and problems of single individual and of micro organization. Managerial economics has its roots in microeconomics and it deals with the micro or individual enterprises. It is concerned with the application of the concepts such as price theory, Law of Demand and theories of market structure and so on. Macroeconomics The study of ‘aggregate’ or total level of economics activity in a country is called macroeconomics. It studies the flow of economics resources or factors of production (such as land, labour, capital, organisation and technology) from the resource owner to the business firms and then from the business firms to the households. It deals with total aggregates, for instance, total national income total employment, output and total investment. It studies the interrelations among various aggregates and examines their nature and behaviour, their determination and causes of fluctuations in the. It deals with the price level in general, instead of studying the prices of individual commodities. It is concerned with the level of employment in the economy. It discusses aggregate consumption, aggregate investment, price level, and payment, theories of employment, and so on. Though macroeconomics ...
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