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Cover of Managerial Finance v1.0
Published: 
December 2019
Page Count: 
326
ISBN (Digital): 
978-1-4533-9222-5

Managerial Finance

Version 1.0
By Amy K. S. Scott and Bradley C. Barnhorst

Included Supplements

Key Features

  • Prime areas of focus are practical applications and ethics. Relevant topics in finance are explained in a clear, concise, applied manner to facilitate accessibility to non-finance majors, without sacrificing the depth necessary for finance majors.
  • Flexible structure facilitates use at different levels. An advanced course would likely utilize all the chapters, while a course for non-majors may only use some of the modules. Provides the necessary depth of knowledge without sacrificing breadth of coverage.
  • Encourages thinking about business problems from a financial perspective and by using an ethical stakeholder model.
  • Emphasizes practical, working knowledge by providing a multitude of concrete worked examples that demonstrate applicability across all business functions.
  • Step-by-step approach ensures theory discussions are supported by quantitative analysis.
  • Integrated discussions of technology enhance student learning through spreadsheet problems and recorded videos.
  • Ethical issues and real-world problems are woven throughout, so students can see the “bigger picture” implications of their decisions. An ethics feature appears in each chapter.

Students

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Managerial Finance, v1.0 is suitable for managerial finance, financial management, or corporate finance courses taught at the undergraduate level in two- and four-year colleges and universities and at the graduate level.

Managerial Finance, v1.0 features an unusually robust integration of theory and practical application. Development of financial “intuition” and the ability to successfully apply learning to new situations is the primary goal of the book. Consequently, the learning strategy first encourages students to understand concepts before equations and discussion of operations are presented. To support the development of financial intuition, each core theoretical concept is supported by numerically based applications. All theory and application are presented in the context of decision making within an ethical stakeholder model.

This textbook models and employs a discounted cash flow approach in order to examine the financial aspects of business management. It addresses solving problems by hand, by using a financial calculator, or by using spreadsheet software. Prerequisites for this text are a basic understanding of accounting principles and enough algebra to handle rearranging equations. Rudimentary spreadsheet exposure is beneficial, but not mandatory. Therefore, this book is appropriate for courses that range from a minimal equation approach, designed for a broader business audience, to a more rigorous approach, designed for finance majors.

  • About the Authors
  • Acknowledgements
  • Dedication
  • Preface

    • Chapter 1: Why Finance?

  • 1.1 Finance in the World
  • 1.2 Finance in Business
  • 1.3 The Role of a Financial Manager
  • 1.4 End-of-Chapter Exercises

    • Chapter 2: Ethics and Finance

  • 2.1 Ethics Foundations
  • 2.2 Ethics in Finance
  • 2.3 Ethics in Management
  • 2.4 International Considerations
  • 2.5 The Bigger Picture
  • 2.6 End-of-Chapter Exercises

    • Chapter 3: Financial Statements

  • 3.1 The Income Statement
  • 3.2 The Balance Sheet
  • 3.3 The Cash Flow Statement
  • 3.4 Other Statements
  • 3.5 Taxes
  • 3.6 Cash Flow
  • 3.7 Ratio Analysis
  • 3.8 DuPont Analysis and Comparisons
  • 3.9 Worked Problems: Niks 2 Inc.
  • 3.10 The Bigger Picture
  • 3.11 End-of-Chapter Exercises

    • Chapter 4: Pro Forma Statements

  • 4.1 Pro Forma Income Statement
  • 4.2 Pro Forma Balance Sheet
  • 4.3 Assessment of Pro Forma Statements
  • 4.4 The Bigger Picture
  • 4.5 End-of-Chapter Problems

    • Chapter 5: Time Value of Money: One Cash Flow

  • 5.1 Present Value and Future Value
  • 5.2 Principal and Interest
  • 5.3 Simple Interest
  • 5.4 Compound Interest
  • 5.5 Solving Compound Interest Problems
  • 5.6 Effective Interest Rates
  • 5.7 End-of-Chapter Problems

    • Chapter 6: Time Value of Money: Multiple Flows

  • 6.1 Multiple Cash Flows
  • 6.2 Perpetuities
  • 6.3 Annuities
  • 6.4 Loan Amortization
  • 6.5 The Bigger Picture
  • 6.6 End-of-Chapter Problems

    • Chapter 7: Securities Markets

  • 7.1 Financial Environment: Institutions and Markets
  • 7.2 Regulation of Financial Institutions
  • 7.3 Modern History of Financial Crises
  • 7.4 Types of Financial and Other Traded Assets
  • 7.5 The Bigger Picture
  • 7.6 End-of-Chapter Problems

    • Chapter 8: Interest Rates and Bond Valuation

  • 8.1 Bonds and Interest Rates
  • 8.2 Credit Risk
  • 8.3 Bond Yield
  • 8.4 Bond Valuation
  • 8.5 The Bigger Picture
  • 8.6 End-of-Chapter Problems

    • Chapter 9: Stock Valuation

  • 9.1 Common and Preferred Stock
  • 9.2 Dividend Discount Model
  • 9.3 Market Multiples Approach
  • 9.4 Free Cash Flow Approach
  • 9.5 The Bigger Picture
  • 9.6 End-of-Chapter Problems

    • Chapter 10: Assessing Risk

  • 10.1 Risk and Return Basics
  • 10.2 Portfolios
  • 10.3 Market Efficiency
  • 10.4 Standard Deviation
  • 10.5 Market History
  • 10.6 The Capital Asset Pricing Model (CAPM)
  • 10.7 The Bigger Picture
  • 10.8 End-of-Chapter Problems

    • Chapter 11: Cost of Capital

  • 11.1 Cost of Capital Overview
  • 11.2 Cost of Debt
  • 11.3 Cost of Preferred Stock
  • 11.4 Cost of Common Stock
  • 11.5 Weighted Average Cost of Capital (WACC)
  • 11.6 WACC and Investment Decisions
  • 11.7 The Bigger Picture
  • 11.8 End-of-Chapter Problems

    • Chapter 12: Capital Budgeting Decision Making

  • 12.1 Introduction to Capital Budgeting Techniques
  • 12.2 Payback Period
  • 12.3 Net Present Value
  • 12.4 Internal Rate of Return
  • 12.5 Other Methods
  • 12.6 Comparing Projects with Unequal Lives
  • 12.7 Approaches for Dealing with Risk
  • 12.8 The Bigger Picture
  • 12.9 End-of-Chapter Problems

    • Chapter 13: Capital Budgeting Cash Flows

  • 13.1 Which Cash Flows Should I Include?
  • 13.2 Capital Spending and Salvage Value
  • 13.3 Operating Cash Flows
  • 13.4 Changes in Net Working Capital
  • 13.5 Making the Investment Decision
  • 13.6 The Bigger Picture
  • 13.7 End-of-Chapter Exercises

    • Chapter 14: Raising Capital and Capital Structure

  • 14.1 Life Cycle of a Firm
  • 14.2 Leverage
  • 14.3 Capital Structure
  • 14.4 Choosing the Optimal Capital Structure
  • 14.5 The Bigger Picture
  • 14.6 End-of-Chapter Exercises

    • Chapter 15: Dividend Policy

  • 15.1 Dividend Basics
  • 15.2 Dividend Policy
  • 15.3 Other Forms of Dividends
  • 15.4 The Bigger Picture
  • 15.5 End-of-Chapter Exercises

    • Chapter 16: Cash and the Cash Conversion Cycle

  • 16.1 Financial Planning
  • 16.2 Cash Budgets
  • 16.3 Net Working Capital Basics
  • 16.4 Cash Conversion Cycle
  • 16.5 The Bigger Picture
  • 16.6 End-of-Chapter Exercises

    • Chapter 17: Current Assets and Current Liabilities Management

  • 17.1 Inventory Management
  • 17.2 Accounts Receivable Management
  • 17.3 Cash Management and Investing Idle Cash
  • 17.4 Accounts Payable Management
  • 17.5 Accruals Management
  • 17.6 Short-Term Loans (Unsecured)
  • 17.7 Secured Uses of Funds
  • 17.8 The Bigger Picture
  • 17.9 End-of-Chapter Exercises

    • Chapter 18: International Considerations

  • 18.1 Multinational Corporations
  • 18.2 Taxes and Reporting
  • 18.3 Exchange Rates
  • 18.4 Other Risk Factors
  • 18.5 Investment Decisions
  • 18.6 The Bigger Picture
  • 18.7 End-of-Chapter Exercises

    • Chapter 19: Derivatives and Hedging

  • 19.1 Futures and Forwards
  • 19.2 Options
  • 19.3 Convertible Securities
  • 19.4 Hedging Risk
  • 19.5 The Bigger Picture
  • 19.6 End-of-Chapter Exercises

    • Chapter 20: Mergers, Acquisitions, and Divestitures

  • 20.1 Mergers and Acquisitions
  • 20.2 Leveraged Buyouts
  • 20.3 Reorganization and Bankruptcy
  • 20.4 The Bigger Picture
  • 20.5 End-of-Chapter Exercises

    • Appendix A: Review of Math Concepts

  • A.1 What do you know? Math Pre-Test
  • A.2 Review of Helpful Math Concepts
  • A.3 Review of Elementary Algebra
  • A.4 End-of-Chapter Assessment
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    Amy K. S. Scott DeSales University

    Amy Scott (Ph.D. Lehigh University) is Associate Professor of Business at DeSales University. Her doctoral studies in economics included concentrations in public finance and international economics. Amy teaches courses in economics and finance at both the undergraduate and graduate level, including economics of public issues, principles of macroeconomics and microeconomics, and personal and managerial finance. 

    Her research includes regional economic impact studies and the impact of corruption on economic development. Amy’s articles have appeared in several journals, including International Economic Journal, Thunderbird International Business Review, Sport Management International Journal, and Journal of Sport and Tourism.

    Bradley C. Barnhorst DeSales University

    Bradley C. Barnhorst (MBA The Pennsylvania State University) is Chair of the Finance Major and

    Associate Professor of Business at DeSales University and Investment Committee Counsel for Canon

    Capital Wealth Management. Brad teaches corporate finance, investments, and portfolio management to undergraduate and MBA students. His years of industry experience include pricing, trading, and hedging equity derivatives and structured products at Bear Stearns. He is a member of the CFA Institute and is a CFA charter holder. 

    Brad’s research focuses on analysis of derivative pricing with a concentration on ETFs, behavioral finance effects in market microstructure, and data analytics in finance. He has a special interest in technology in the classroom, particularly in the use of computer simulations for immersive learning.

    Additions & Errata

    • Changed "Net Work Capital" to "Net Working Capital" at start of Section 16.3. (1/7/20)
    • Changed "in which ta company operates" to "in which a company operates" in the definition of political risk in Section 18.4. (1/7/20)
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