Corporate Financial Management

Preface 

Part 1 Introduction 

Chapter 1 Goals and Functions of Finance 
Evolution of Finance • The Fourth Industrial Revolution • Objective of the Firm • Place of Finance in a Business Organization • Functions of Financial Management • Principles of Finance • Summary

Chapter 2 Operating Environment of Financial Management 
Circular Flow of Income • Financial Institutions • Other Financial Institutions • Financial Markets • Derivative Markets • Inflation • Forms of Business Organization • Tax Treatment of Corporate Income • Summary • List of Key Terms

Part 2 Financial Planning and Control 

Chapter 3 Financial Statement Analysis
Background Information • Financial Analysis •  Comparative Ratio Analysis • Limitations of Ratio Analysis • Summary • List of Key Terms • Problems
Case Study 1 Ratio Analysis
Wellington Airlines • Questions

Chapter 4 Leverage and Risk Analysis 
Break-Even Analysis and Leverage • An Overview of Operating and Financial Leverage • Operating Leverage • Financial Leverage • Combined Effect of Operating Leverage and Financial Leverage • Business Risk, Financial Risk, and Total Risk • Summary • List of Key Terms • Problems

Chapter 5 Financial Planning and Forecasting 
Nature of Budgeting • Relationships among Various Budgets • Types of Pro Forma Financial Statements • Percent-of-Sales Method • Summary • List of Key Terms • Problems
Case Study 2 Cash Budgeting
Dundas Toy Company • Questions

Part 3 Working Capital Management 

Chapter 6 An Overview of Working Capital Management 
Basic Concepts of Working Capital Management • Alternative Financing Plans • Term Structure of Interest Rates • Summary • List of Key Terms • Problems
Case Study 3 Profitability Analysis
Hawthorne Business Instruments • Questions

Chapter 7 Current Asset Management 
Cash Management • Marketable Securities • Management of Accounts Receivable • Inventory Management • Summary • List of Key Terms • Problems
Case Study 4 Inventory Management
Brown Toy Company • Questions

Chapter 8 Sources of Short-Term Financing 
Trade Credit • Short-Term Bank Loans • Commercial Paper • Accounts Receivable Financing • Inventory Financing • Summary • List of Key Terms • Problems
Case Study 5 Secured Short-Term Financing
Lavely Clothing Company • Questions

Part 4 Capital Expenditure Analysis 

Chapter 9 Time Value of Money 
Financial Calculators • Future Value of a Current Lump Sum • Future Value of an Annuity • Present Value of a Future Lump Sum • Present Value of an Annuity • Other Common Applications of Future Value and Present Value • Perpetuities • Summary • List of Key Terms • Problems • Appendix 9-A

Chapter 10 Valuation 
Understanding Valuation • Bond Valuation • Preferred Stock Valuation • Common Stock Valuation • Summary • List of Key Terms • Problems
Case Study 6 Valuation
Stone Mill Gifts Incorporated • Questions

Chapter 11 Cost of Capital 
Component Costs of Capital • Weighted Average Cost of Capital • Weighted Marginal Cost of Capital • Weighted Marginal Cost of Capital and Investment Decisions • Summary • List of Key Terms • Problems
Case Study 7 Weighted Average Cost of Capital 
Featherstun Technology Company • Questions

Chapter 12 Capital Budgeting under Certainty 
Capital Budgeting Process • Capital Budgeting Techniques under Certainty • Ranking and Selection • Summary • List of Key Terms • Problems 
Case Study 8 Cash Flow Analysis for Capital Budgeting
Farmville Fiber Corporation • Questions

Chapter 13 Other Issues in Capital Budgeting 
Factors Influencing Cash Flows • Special Topics• Summary • List of Key Terms • Problems

Chapter 14 Capital Budgeting under Uncertainty 
The Basic Concept of Risk • Methods to Adjust for Risk • Portfolio Risk and Return • Summary • List of Key Terms • Problems

Part 5 Long-Term Financing 

Chapter 15 Investment Bankers and Capital Markets  
The Primary Market • Secondary Markets • How to Read the Stock Quotations • Regulations of Security Markets • Summary • List of Key Terms • Problems

Chapter 16 Fixed Income Securities: Bonds and Preferred Stock 
Differences between Bonds, Preferred Stocks, and Common Stocks • Characteristics of Bonds • Types of Bonds • Bond Ratings • Reasons for Using Bonds •  Hybrid Nature of Preferred Stock • Characteristics of Preferred Stock • Reasons for Using Preferred Stock • Refunding Analysis • Summary • List of Key Terms • Problems
Case Study 9 Debt Financing
Southside Electric Power Company • Questions

Chapter 17 Common Stock 
Accounting Terms as Applied by Common Stock • Rights of Common Stockholders • Reasons for Using Common Stock • Convertible Securities • Warrants • Fully Diluted Earnings per Share • Summary • List of Key Terms • Problems

Chapter 18 Dividend Policy and Retained Earnings 
Factors Affecting Dividend Policy • Alternative Dividend Policies • Theories of Dividend Policy • Stock Dividends and Stock Splits • Repurchase of Common Stock • Summary • List of Key Terms • Problems

Chapter 19 Term Loans and Leases 
Bank Term Loans • Other Term Loans • Leases • Summary • List of Key Terms • Problems

Part 6 Special Topics in Finance 

Chapter 20 Corporate Growth through Mergers 
Internal Growth versus External Growth • Types of Business Combination • Terms of Combination • Some Accounting Aspects of Business Combinations • Holding Companies • Summary • List of Key Terms

Chapter 21 Corporate Growth through Globalization 
Motives for World Trade • Motives for Foreign Investment • Political Risks • Foreign Exchange Market and Risks • Financing Foreign Trade • Financing Foreign Investment • Foreign Corrupt Practices Act • Summary • List of Key Terms
Case Study 10 International Finance 1
GM Operations in Mexico and the Peso Crisis • Questions

Case Study 11 International Finance 2
Multinational Capital Budgeting Practices • Questions

Case Study 12 Ethics in Financing
Presley technology’s Ethical Dilemma • Questions

Appendix A Interest Tables 
Glossary of Financial Terms
Answers to Selected End-of-Chapter Problems 
Index