Credits: 3

Pre-requisites: None

Core / Optional: Compulsory for Mechanical Engineering with Business Track of Mechanical Engineering / Optional for Others

Aim(s):To provide basic concepts of financial accounting, financial management and management accounting to students, so that they can function effectively as professional engineers in future.

Intended Learning Outcomes:

1. Describe the role and goals of Accounting and Finance for a business.
2. Apply suitable capital budgeting techniques to make long-term investment decisions.
3. Examine suitable financing options for different requirements and stages of a business.
4. Analyse financial performance of a business using financial statements and ratios.
5. Apply costing and budgeting techniques appropriate to different activities and decisions.

Course Content:

1. Introduction: Branches of finance and accounting; why engineers need finance and accounting; goals of a firm.
2. Important Financial Concepts: Time value of money; risk and return.
3. Capital Budgeting Techniques and Working Capital Management: Process of capital budgeting; capital budgeting techniques – ARR, payback, NPV, IRR; effect of risk; inflation and tax on investment decisions; spreadsheet analysis on capital budgeting; working capital management – profitability vs. liquidity.
4. Financing Decision: Financing requirements of a business; sources of finance and different classifications; life cycle financing; capital structure and cost of capital.
5. Financial Statements and Analysis: Basic accounting concepts; accounting statements – balance sheet; income statement; cash-flow statement; statement of retained earnings; key financial ratios; ratio analysis.
6. Costing and Budgeting Techniques for Decision Making: Types and nature of costs; activity based costing vs. traditional costing; cost-volume-profit (break-even) analysis and decision making; operating budgets and cash budgets.
7. Reports and presentations:

Time Allocation:

Learning component	Hours
Theory	9
Small group activities	31
Assignments	10
Independent Learning	100

Marks Allocation:

Assessment	Percentage Marks
Small Group Activities / Case Studies / Assignments / Presentation	60%
End Semester Examination	40%