This lesson explores practical capital structure decision-making, including features of sound capital structures, EBIT-EPS analysis, cash flow and valuation approaches, control, flexibility, loan covenants, and agency costs. It discusses capital structure differences across industries, as well as business, operating, and financial risk, using solved cases and analytical models to guide managers.
The lesson tackles theories of capital structure—debt vs. equity, Modigliani-Miller propositions, arbitrage process, Net Income and Net Operating Income approaches, and traditional theory. It explains leverage ratios (DSCR, ICR, Debt-Capital, Debt-Equity) with real-world finance applications, offering practical insights for structuring business financing and evaluating company performance.
The lesson covers financial planning models, key dimensions, sustainable growth rate, scenario analysis, sales forecasting, pro forma statements, and steps for preparing financial plans and projected balance sheets. It focuses on best practices and caveats in planning, ensuring companies understand funding needs, risk assessment, and the impact of external and internal growth strategies in decision-making.
E-business and globalisation covering nature of e-business (end-to-end processes), e-business vs e-commerce, models (B2B, B2C, C2C, C2B), impediments to e-business (strategy, financial, technology concerns), e-business applications, strategy and structure, globalisation of Indian business through IT/BPO/KPO.
Global business strategy covering global ambition (GRI, GCI indices, types of global players), global positioning (choice of countries, value proposition, standardization), global business system (value chain elements, capabilities), global organization (structure, processes, coordination, HRM), global corporate strategy.