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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
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
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
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
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).
2. Varshney & Maheswari: Managerial Economics, Sultan Chand, 2003.
3. S A Siddhiqui &AS Siddhiqui , Managerial Economics and Financial Analysis, New Age international
4. M. Kasi Reddy & Saraswathi, Managerial Economics and Financial Analysis ,PHI New Delhi 2012.
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
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
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
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
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
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
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:
- Course Objective & Outcome Matrix:
- 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
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:
d) More inputs,
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
Lord Keynes defined economics as ‘the study of the administration of scarce means and the determinants of
employments and income”.
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.
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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