Corporate Finance And Strategy: An Active Learning Approach

Corporate finance is concerned with making capital investment decisions, financing company activities, and making dividend payment decisions. This book will cover methods, theory, and policy decisions, including how streams of cash flows are valued, how financial managers evaluate investment opportunities, how financial statements are used, how a manager chooses between mutually exclusive opportunities, and how they evaluate different types of investment. It will also discuss the treatment of risk when evaluating a project and the required returns on a project. Alternative sources of funds used to finance new projects will be discussed. Long-term financial planning will also be discussed.

Format: Hardback
Length: 1368 pages
Publication date: 02 August 2022
Publisher: World Scientific Publishing Co Pte Ltd

Corporate finance encompasses a wide range of activities and decisions related to the financial management of a company. It involves the strategic allocation of capital investments, the financing of business operations, and the decision-making process related to dividend payments. This comprehensive book aims to provide a comprehensive understanding of corporate finance, covering various topics such as capital budgeting, investment evaluation, financial statement analysis, opportunity assessment, risk management, and alternative funding sources.

Within the realm of corporate finance, capital budgeting plays a pivotal role. It involves the evaluation of potential investment opportunities and the determination of their financial viability. Financial managers employ various methods and theories to assess these opportunities, including discounted cash flow analysis, payback analysis, and risk-adjusted return metrics. By analyzing the projected cash flows and risks associated with an investment, financial managers can make informed decisions about whether to proceed with a project and allocate the necessary capital resources.

Investment evaluation is another critical aspect of corporate finance. Financial managers must assess the potential returns and risks of different investment options to make informed decisions about where to allocate company resources. This involves analyzing financial statements, industry trends, and market conditions to evaluate the performance and stability of potential investments. Financial statement analysis involves interpreting and analyzing a company's financial statements, such as the balance sheet, income statement, and cash flow statement, to gain insights into its financial condition, profitability, and liquidity. By analyzing these statements, financial managers can identify trends, assess the financial health of the company, and make decisions about capital allocation and dividend payments.

Opportunity assessment is another key component of corporate finance. Financial managers must identify and evaluate potential opportunities that align with the company's strategic goals and objectives. This involves conducting market research, analyzing industry trends, and assessing the competitive landscape to identify potential growth areas and new market entrants. By evaluating these opportunities, financial managers can make informed decisions about whether to invest in new projects or expand existing operations.

Risk management is an essential aspect of corporate finance. Financial managers must identify and assess the risks associated with different investment opportunities and business operations. This involves developing risk management strategies, such as diversification, hedging, and risk transfer, to mitigate the potential impact of negative events on the company's financial condition. Risk management also involves monitoring and managing financial risks, such as interest rate fluctuations, market volatility, and credit risk.

Alternative funding sources are also an important consideration in corporate finance. Companies may seek to finance new projects and expansions through a combination of internal and external sources of funds. Internal sources of funds include retained earnings, cash flows, and short-term investments. External sources of funds include bank loans, bond issuance, and equity financing. Financial managers must evaluate the costs and benefits of different funding sources and choose the most appropriate option for the company's needs.

Long-term financial planning is another critical aspect of corporate finance. It involves developing a comprehensive financial strategy that aligns with the company's long-term goals and objectives. This involves forecasting future financial needs, estimating future cash flows, and developing strategies to optimize financial performance and achieve sustainable growth. Long-term financial planning also involves developing risk management strategies and implementing measures to ensure financial stability and resilience in the face of changing market conditions and economic uncertainties.

In conclusion, corporate finance is a multidisciplinary field that involves a wide range of activities and decisions related to the financial management of a company. It encompasses capital budgeting, investment evaluation, financial statement analysis, opportunity assessment, risk management, and alternative funding sources. This book aims to provide a comprehensive understanding of corporate finance, covering these topics and providing practical insights and strategies for financial managers and professionals. By understanding the principles.

ISBN-13: 9789811239038