This updated and revised edition of well-established text provides a step-by-step approach to the principles of finance in the context of electronic spreadsheets, LOTUS 1-2-3, and other software packages wherever appropriate. It gives an expanded coverage of the working capital to reflect the importance of liquidity and short-term sources of financing. It also broadens the coverage of financial securities and long-term fund sources.

KEY FEATURES:

Increased clarity of presentation. Some of the cases have been simplified to

focus the attention of the reader on the essential issues. Many of the explanations of key points have been modified, including the addition of new examples, to assist the reader in complex points.

Spreadsheet formats. Problem-solving approaches have been converted to formats that are suitable for spreadsheet processing. Examples include financial analysis, capital budgeting, and lease-buy decisions.

Expanded working capital coverage. Strong emphasis on managing short-term assets and liabilities. Thoroughly revised approaches to calculating effective costs and rates of return on short-term loans and investments are developed in

a spreadsheet format.

PART ONE THE FOUNDATION


1 Overview of Financial Management 1

2 Financial Securities and Markets 23

3 A Review of Financial Accounting 46


PART TWO THE FIRM AND ITS OPERATIONS

4 Financial Statements 63

5 Financial Analysis 98

6 Profit Planning 133

7 Leverage 157


PART THREE WORKING CAPITAL MANAGEMENT

8 Working Capital and Cash Management 177

9 Management of Receivables and Inventory 208

10 Economics of Working Capital 261

11 Investing Excess Cash 279


PART FOUR INVESTMENT POLICY

12 Capital Budgeting 298

13 Risk and Required Return 339

14 Valuation of the Firm 367

15 Merqers and Acquisitions 391


PART FIVE FINANCING DECISIONS


16 Sources of Short- and Intermediate-Term Financing 426

17 Long-Term Financing Decisions 465

18 Lease-Buy Decisions 484

19 Dividend Policies arid Decisions 511


APPENDIX 525