Analysis for Financial Management ^{6th Ed.}

New

• PowerPoint slides help students study more efficiently, and lets instructors customize lectures
• Five times more websites for quick access of additional information
• New sections in Chapter 2 on international variations
• Added section in Chapter 5 lets students estimate the value of their employee stock options
• More in Chapter 6 on the agency perspective in capital structure decisions
• More in Chapter 7 on the relevant costs and benefits in investment appraisal

Features

• Modern emphasis on market efficiency, beta risk, and market signaling
• Clear and simple presentation of sustainable growth
• Thorough discussion of cash flows, based on objective data

• Part I: Assessing the Financial Health of the Firm
1. Interpreting Financial Statements
• The Cash Flow Cycle
• The Balance Sheet
• Current Assets and Liabilities
• Shareholders' Equity
• The Income Statement
• Measuring Earnings
• Sources and Uses Statements
• The Two-Finger Approach
• The Cash Flow Statement
• Financial Statements and the Value Problem
• Market Value versus Book Value
• Economic Income versus Accounting Income
• Chapter Summary
• Additional Resources
• Chapter Problems
2. Evaluating Financial Performance
• The Levers of Financial Performance
• Return on Equity
• The Three Determinants of ROE
• The Profit Margin
• Asset Turnover
• Financial Leverage
• Is ROE a Reliable Financial Yardstick?
• The Timing Problem
• The Risk Problem
• The Value Problem
• ROE or Market Price?
• Ratio Analysis
• Using Rations Effectively
• Ratio-Analysis of The Timberland Company
• Appendix: International Differences in Financial Structure
• Percentage Balance Sheet
• Comparisons among Publicly Traded Companies
• International Accounting Differences
• Chapter Summary
• Additional Resources
• Chapter Problems
• Part II: Planning Future Financial Performance
3. Financial Forecasting
• Pro Forma Statements
• Percent-of-Sales Forecasting
• Pro Forma Statements and Financial Planning
• Sensitivity Analysis
• Scenario Analysis
• Interest Expense
• Seasonality
• Forecasting with Computer Spreadsheets
• Simulation
• Cash Flow Forecasts
• Cash Budgets
• The Techniques Compared
• Planning in Large Companies
• Chapter Summary
• Additional Resources
• Chapter Problems
4. Managing Growth
• Sustainable Growth
• The Sustainable Growth Equation
• Too Much Growth
• Balanced Growth
• Triad Guarantee's Sustainable Growth Rate
• "What If" Questions
• What to do When Actual Growth Exceeds Sustainable Growth
• Sell New Equity
• Increase Leverage
• Profitable Pruning
• Sourcing
• Pricing
• Is Merger the Answer?
• Too Little Growth
• What to do When Sustainable Growth Exceeds Actual Growth
• Ignore the problem
• Return the Money to Shareholders
• Buy Growth
• Sustainable Growth and Inflation
• Sustainable Growth and Pro Forma Forecasts
• Chapter Summary
• Additional Resources
• Chapter Problems
• Part III: Financing Operations
5. Financial Instruments and Markets
• Financial Instruments
• Bonds
• Common Stock
• Preferred Stock
• Financial Markets
• Private Placement or Public Issue?
• Exchanges and Over-the-Counter Markets
• International Financial Markets
• Investment Banking
• Issue Costs
• Regulatory Changes
• Efficient Markets
• What Is an Efficient Market?
• Implications of Efficiency
• Appendix: Forward Contracts, Options, and the Management of Corporate Risk
• Forward Markets
• Hedging in Money and Capital Markets
• Hedging with Options
• Limitations of Financial Market Hedging
• Valuing Options
• Chapter Summary
• Additional Resources
• Chapter Problems
6. The Financing Decision
• Financial Leverage
• Techniques for Analyzing Financing Alternatives
• Leverage and Risk
• Leverage and Earnings
• How Much to Borrow
• Tax Benefits and Distress Costs
• Flexibility and Market Signaling
• The Financing Decision and Sustainable Growth
• Selecting a Maturity Structure
• Inflation and Financing Strategy
• Appendix: The Irrelevance Proposition
• No Taxes or Distress Costs
• Taxes but Still No Distress Costs
• Chapter Summary
• Additional Resources
• Chapter Problems
• Part IV: Evaluating Investment Opportunities
7. Discounted Cash Flow Techniques
• Figures of Merit
• The Payback Period and the Accounting Rate of Return
• The Time Value of Money
• Equivalence
• The Net Present Value
• The Benefit-Cost Ratio
• The Internal Rate of Return
• Calculating NPVs, IRRs, and BCRs with a Computer Spreadsheet
• Bound Valuation: An Example of NPV and IRR Calculations
• Mutually Exclusive Alternatives and Capital Rationing
• Determining the Relevant Cash Flows
• Depreciation
• Working Capital and Spontaneous Sources
• Sunk Costs
• Allocated Costs
• Excess Capacity
• Financing Costs
• Appendix: Mutually Exclusive Alternatives and Capital Rationing
• What Happened to the Other $578,000?
• Unequal Lives
• Capital Rationing
• The Problems of Future Opportunities
• A Decision Tree
• Chapter Summary
• Additional Resources
• Chapter Problems
8. Risk Analysis om Investment Decisions
• Risk Defined
• Estimated Investment Risk
• Three Techniques for Estimating Investment Risk
• Including Risk in Investment Evaluation
• Risk-Adjusted Discount Rates
• The Cost of Capital
• The Cost of Capital Defined
• Timberland Company's Cost of Capital
• The Cost of Capital in Investment Approaisal
• Multiple Hurdle Rates
• Four Pitfalls in the Use of Discounted Cash Flow Techniques
• The Enity Perspective versus the Equity Perspective
• Inflation
• Real Options
• Excessive Risk Adjustment
• Economic Value Added
• EVA and Investment Analysis
• EVA's Appeal
• A Cautionary Note
• Appendix: Diversification and β-Risk
• Diversification
• Measuring Beta
• Using Beta in Investment Evaluation
• Beta Risk and Conglomerate Diversification
• Chapter Summary
• Additional Resources
• Chapter Problems
9. Business Valuation and Corporate Restructuring
• Valuing a Business
• Assets or Equity?
• Dead or Alive?
• Minority Interest or Control?
• Discounted Cash Flow Valuation
• Free Cash Flow
• The Terminal Value
• A Numerical Example
• Problems with Present Value Approaches to Valuation
• Valuation Based on Comparable Trades
• Lack of Marketability
• The Market for Control
• The Premium for Control
• Financial Reasons for Restructuring 
• The Empirical Evidence
• The AT&T — McCaw Merger
• Chapter Summary
• Additional Resources
• Chapter Problems

1. Present Value of $1 in Year N, Discounted at Discount Rate K
2. Present Value of an Annuity of $1 for N Years, Discounted at Rate K

A book that every prospective MBA should have, as it is very clear and gives a lot of resource listings and examples. Recommended for anyone that need to deal with financial issues.

What makes it even better, is that it lives up to its back cover: it turns Finance into Management, or at least tries very hard to show what a CFOs life is really about, in practical examples.

Very strongly recommended for people that need to understand what being a CFO is about (all prospective MBAs) or people that need to understand what choices sometimes have to be made in finance.