Book description
Financial Management introduces students to the fundamental tools and concepts of corporate finance by explaining the reasoning behind various financial concepts. The book prepares students for life outside the classroom through snapshots from contemporary organizations, solved examples and application-based problems. The book includes short vignettes about the financial practices of organizations such as Steel Authority of India Limited, Hindalco Industries Limited, Amazon.com and Tata Motors; useful facts and rules of thumb, and provide insights into financial practices in organizations like Godrej Industries Ltd, Infosys Technologies Ltd and ICICI Bank; solved examples, solved problems and excel worksheets to help enhance students' understanding of numerical and MS Excel-based problems.
Table of contents
- Cover
- Title Page
- Brief Contents
- Contents
- Dedication
- Preface
-
Unit I: Introduction to Corporate Finance
-
1. Introduction to Financial Management
- 1.1 - INTRODUCTION
- 1.2 - FINANCE FUNCTIONS
- 1.3 - THE ROLE OF THE FINANCE MANAGER
- 1.4 - THE GOALS OF A FIRM
- 1.5 - PROFIT AND WEALTH MAXIMIZATION
- 1.6 - MANAGEMENT VERSUS SHAREHOLDERS
- 1.7 - FIELDS RELATED TO FINANCE
- 1.8 - FINANCE AND OTHER FUNCTIONAL AREAS
- 1.9 - CORPORATE SOCIAL RESPONSIBILITY
- 1.10 - FINANCIAL PLANNING
- 1.11 - CAREERS IN FINANCE
-
2. Fundamentals of Financial Statements
- 2.1 - INTRODUCTION
- 2.2 - ACCOUNTING AND BOOKKEEPING
- 2.3 - GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP)
- 2.4 - FUNDAMENTALS OF ACCOUNTING
- 2.5 - THE BASIC ACCOUNTING EQUATION
- 2.6 - ACCOUNTING STATEMENTS
- 2.7 - DOUBLE-ENTRY SYSTEM OF ACCOUNTING
- 2.8 - JOURNALS
- 2.9 - LEDGERS
- 2.10 - TRIAL BALANCE
- 2.11 - ANNUAL REPORTS OF COMPANIES
- 2.12 - ADVANTAGES OF ACCOUNTING
- 2.13 - LIMITATIONS OF ACCOUNTING
-
3. Cash Flow Statements
- 3.1 - INTRODUCTION
- 3.2 - RATIONALE OF CASH FLOW STATEMENTS
-
3.3 - PREPARATION OF CASH FLOW STATEMENTS
- 3.3.1 - Measuring the Change in the Cash Position of the Company
- 3.3.2 - Measuring the Net Cash Flow from the Operations of the Company
- 3.3.3 - Cash Flow Arising from Investing Activities
- 3.3.4 - Cash Flow Arising from Financing Activities
- 3.3.5 - Compiling the Cash Flows Arising from Different Activities
- 3.3.6 - Methods for Preparing Cash Flow Statements
- 3.4 - FUNDS FLOW STATEMENTS
- 3.5 - FUNDS FLOW STATEMENTS VERSUS CASH FLOW STATEMENTS
- 3.6 - THE IMPORTANCE OF CASH FLOW STATEMENTS
- 4. Cost Concepts for Managers
- 5. Cost-Volume-Profit Analysis
-
1. Introduction to Financial Management
-
Unit II: Tools of Corporate Finance
- 6. Time Value of Money
- 7. Ratio Analysis
-
8. Investment Risk and Return
- 8.1 - INTRODUCTION
- 8.2 - THE OBJECTIVES OF INVESTMENT
- 8.3 - INVESTORS' ATTITUDE TOWARDS RISK
- 8.4 - RISKS ASSOCIATED WITH INVESTMENTS
- 8.5 - THE RISK–RETURN CONCEPT
- 8.6 - RISK–RETURN TRADE-OFF
- 8.7 - COMBINATIONS OF ASSETS AND DIVERSIFICATION
- 8.8 - THE CAPITAL ASSET PRICING MODEL (CAPM)
- 8.9 - THE ARBITRAGE PRICING THEORY (APT)
- 9. Beta: Determination and Implications
- 10. Bonds and Equity Valuation
-
11. Understanding Options
- 11.1 - INTRODUCTION
- 11.2 - BASIC CONCEPTS
- 11.3 - CALL OPTIONS AND PUT OPTIONS
- 11.4 - THE STRIKE PRICE AND THE SPOT PRICE OF THE UNDERLYING ASSET
- 11.5 - OPTION PREMIUM
- 11.6 - OPTION TRADING IN INDIA
- 11.7 - FACTORS AFFECTING OPTION PRICES
- 11.8 - OPTION PRICING
- 11.9 - OPTION GREEKS: MEASURES OF THE PRICE SENSITIVITY OF OPTIONS
- 11.10 - OPTION STRATEGIES AND COMBINATIONS
- 11.11 - PLAYERS IN THE OPTIONS MARKET: MARKET MAKERS
- 11.12 - BENEFITS OF USING OPTIONS
- 11.13 - CHALLENGES FACED WHILE DEALING WITH OPTIONS
-
Unit III: Aspects of Corporate Financial Structure
- 12. Leverages
-
13. Cost of Capital
- 13.1 - INTRODUCTION
- 13.2 - UNDERSTANDING COST OF CAPITAL
- 13.3 - COST OF DEBT
- 13.4 - COST OF PREFERENCE SHARES
- 13.5 - COST OF EQUITY CAPITAL
- 13.6 - COST OF DEBT VERSUS COST OF EQUITY
- 13.7 - COST OF RETAINED EARNINGS
- 13.8 - WEIGHTED AVERAGE COST OF CAPITAL (WACC)
- 13.9 - FACTORS AFFECTING COST OF CAPITAL
- 13.10 - SOME IMPORTANT COST OF CAPITAL FORMULAE
- 14. Capital Structure
- 15. Dividend Theory
-
16. Dividend Policy
- 16.1 - INTRODUCTION
- 16.2 - THE DIVIDEND RATIONALE
- 16.3 - DIVIDEND POLICY
- 16.4 - DIVIDEND POLICY AND FIRM VALUE
- 16.5 - TYPES OF DIVIDENDS
- 16.6 - SHARE REPURCHASE
- 16.7 - STOCK SPLITS
- 16.8 - STABLE DIVIDEND POLICIES
- 16.9 - THE SIGNALLING EFFECT
- 16.10 - THE CLIENTELE EFFECT
- 16.11 - FACTORS AFFECTING DIVIDEND POLICY
- 16.12 - DIVIDEND PAYOUTS IN INDIA
-
Unit IV: Dimensions of Investment
- 17. Principles of Capital Budgeting
- 18. Capital Budgeting Techniques
- 19. Capital Budgeting Under Risk and Uncertainty
-
Unit V: Dimensions of Financial Operations
-
20. Working Capital Management
- 20.1 - INTRODUCTION
- 20.2 - RATIONALE FOR WORKING CAPITAL
- 20.3 - FINANCING OF CURRENT ASSETS
- 20.4 - THE OBJECTIVE OF WORKING CAPITAL MANAGEMENT
- 20.5 - CONSERVATIVE AND AGGRESSIVE WORKING CAPITAL POLICIES
- 20.6 - FACTORS AFFECTING THE COMPOSITION OF WORKING CAPITAL
- 20.7 - THE OPERATING CYCLE AND THE CASH CYCLE
- 20.8 - THE HEDGING APPROACH
- 20.9 - PERMANENT AND VARIABLE WORKING CAPITAL
- 20.10 - ASSESSMENT OF WORKING CAPITAL REQUIREMENT
- 21. Short-Term Sources of Financing
- 22. Cash Management
- 23. Receivables Management
- 24. Inventory Management
-
20. Working Capital Management
-
Unit VI: Understanding the Financial Market
-
25. Understanding the Capital Market
- 25.1 - INTRODUCTION
- 25.2 - FINANCIAL INSTITUTIONS
- 25.3 - THE CAPITAL MARKET IN INDIA
- 25.4 - THE SECONDARY MARKET
- 25.5 - STOCK EXCHANGES
- 25.6 - THE STOCK MARKET: SOME BASIC INFORMATION
- 25.7 - STOCK INDEX
- 25.8 - DEMATERIALIZATION
- 25.9 - MEMBERS OF THE STOCK EXCHANGE
- 25.10 - THE TRADING MECHANISM
- 25.11 - THE SETTLEMENT SYSTEM
- 25.12 - PERFECTION IN THE CAPITAL MARKET
- 25.13 - INTERNATIONAL CAPITAL MARKETS
- 26. Understanding the Primary Market
-
27. Traditional Financial Instruments
- 27.1 - INTRODUCTION
- 27.2 - SHARE CAPITAL
- 27.3 - PREFERENCE SHARES
- 27.4 - DEBENTURES AND BONDS
- 27.5 - RETAINED EARNINGS
- 27.6 - EUROBONDS
- 27.7 - FOREIGN BONDS
- 27.8 - DEPOSITORY RECEIPTS
- 27.9 - EXTERNAL COMMERCIAL BORROWINGS
- 27.10 - EQUIPMENT FINANCING
- 27.11 - VENTURE CAPITAL
- 27.12 - LEASING AND HIRE PURCHASE
- 27.13 - GOVERNMENT SUBSIDIES AND SALES TAX DEFERMENTS AND EXEMPTIONS
- 28. New Financial Instruments and Derivatives
- 29. Venture Capital
-
30. Hedge Funds and Mutual Funds
- 30.1 - INTRODUCTION TO HEDGE FUNDS
- 30.2 - CHARACTERISTIC FEATURES OF HEDGE FUNDS
- 30.3 - THE GROWTH OF HEDGE FUNDS
- 30.4 - TYPES OF HEDGE FUND INVESTORS
- 30.5 - HEDGE FUND INVESTMENT STRATEGIES
- 30.6 - HEDGE FUND INDICES AND DATABASES
- 30.7 - INTRODUCTION TO MUTUAL FUNDS
- 30.8 - THE INDIAN MUTUAL FUND INDUSTRY
- 30.9 - MUTUAL FUND SCHEMES
- 30.10 - NET ASSET VALUE
-
25. Understanding the Capital Market
-
Unit VII: Influences from Beyond the Border
-
31. International Finance
- 31.1 - INTRODUCTION
- 31.2 - UNDERSTANDING INTERNATIONAL TRADE
- 31.3 - EVOLUTION OF THE INTERNATIONAL MONETARY SYSTEM
- 31.4 - THE WORLD BANK
- 31.5 - THE INTERNATIONAL MONETARY FUND
- 31.6 - FOREIGN EXCHANGE MARKETS
- 31.7 - FOREIGN EXCHANGE RATES
- 31.8 - FOREIGN EXCHANGE EXPOSURE
- 31.9 - INTERNATIONAL FINANCING
- 31.10 - THE EURO
-
32. Foreign Direct Investment
- 32.1 - INTRODUCTION
- 32.2 - THE RATIONALE FOR FDI
- 32.3 - COSTS OF FDI
- 32.4 - FOREX RATE VOLATILITY, BOP AND FDI
-
32.5 - DETERMINANTS OF FDI
- 32.5.1 - Market Size
- 32.5.2 - Political Risk
- 32.5.3 - Quality of Labour
- 32.5.4 - Quality of Business Infrastructure
- 32.5.5 - GDP Growth Rate
- 32.5.6 - Macroeconomic Stability
- 32.5.7 - The Regulatory Environment
- 32.5.8 - Profit Repatriation
- 32.5.9 - Openness
- 32.5.10 - Incentives and Operating Conditions
- 32.6 - FDI IN INDIA
- 32.7 - ADVANTAGES OF FDI
- 32.8 - FDI AND ASIAN COUNTRIES
-
31. International Finance
-
Unit VIII: Strategic Dimensions for Value Creation
- 33. Corporate Governance
-
34. Mergers and Acquisitions
- 34.1 - INTRODUCTION
- 34.2 - STRATEGIC RATIONALE
- 34.3 - MERGERS AND ACQUISITIONS AS A RESTRUCTURING TOOL
- 34.4 - TYPES OF MERGERS AND ACQUISITIONS
- 34.5 - MERGERS AND ACQUISITIONS: INDIAN LEGAL DUE DILIGENCE
- 34.6 - VALUATION IN MERGERS AND ACQUISITIONS
- 34.7 - ACCOUNTING FOR ACQUISITIONS
- 34.8 - DEAL STRUCTURING
- 35. Business Valuation
- 36. Brand Valuation
-
37. Strategic Financial Decisions
- 37.1 - INTRODUCTION
- 37.2 - STRATEGIC VITALS
- 37.3 - CASH FLOWS
- 37.4 - PROFITABILITY AND PRICING
- 37.5 - PROFILING FOR FUTURE PROFITS
- 37.6 - MONITORING AGAINST BENCHMARKS
- 37.7 - FINANCIAL STRATEGY AND MARKETING INVESTMENTS
- 37.8 - STRATEGIC EVALUATION OF ADVERTISING INVESTMENTS
- 37.9 - FUTURE FORECASTING AND BENCHMARKING
- 37.10 - OPERATIONAL/FUNCTIONAL STRATEGY AND FINANCIAL IMPACT
- 37.11 - OPTIMIZING VARIABLE COST EXPENSES
- 37.12 - FORECASTING OUTCOMES
- 37.13 - STRATEGIC MANAGEMENT FOR CUSTOMER DELIGHT
- 37.14 - A COMPREHENSIVE OVERVIEW
-
Notes
- Chapter 1
- Chapter 2
- Chapter 5
- Chapter 7
- Chapter 8
- Chapter 9
- Chapter 10
- Chapter 11
- Chapter 12
- Chapter 14
- Chapter 15
- Chapter 16
- Chapter 19
- Chapter 22
- Chapter 24
- Chapter 25
- Chapter 26
- Chapter 27
- Chapter 28
- Chapter 29
- Chapter 30
- Chapter 31
- Chapter 32
- Chapter 33
- Chapter 34
- Chapter 35
- Chapter 36
- Chapter 37
- Acknowledgements
- Copyright
Product information
- Title: Financial Management
- Author(s):
- Release date: September 2010
- Publisher(s): Pearson India
- ISBN: 9788131731659
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