Finance for Executives: Managing for Value Creation

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Ideal for both aspiring managers and experienced executives, the Fourth Edition of FINANCE FOR EXECUTIVES: MANAGING FOR VALUE CREATION illustrates the importance of financial information in maximizing firm value. Respected authors Gabriel Hawawini and Claude Viallet draw on their wealth of business and teaching experience to provide a concise, analytically sound introduction to financial management that is neither too simplistic nor too theoretical. In fact, the text masterfully balances a thorough exploration of modern finance principles with a strong practical focus on real-world applications and rigorous analysis, even while avoiding complicated formulas with little value for decision-making.Perfect for executive education courses, M.B.A. programs, or any class with an emphasis on translating theory into practice or learning through real-world cases, FINANCE FOR EXECUTIVES employs a strong problem-scenario approach to present key concepts within the context of realistic financial management issues that executives commonly face. In addition, a series of integrated case studies analyzes the same set of companies throughout the text to explore concepts in greater depth and reinforce learning. The new Fourth Edition maintains the text’s highly reader-friendly structure and presentation. Because each chapter is self-contained, instructors can enjoy great flexibility in structuring their courses, while students will find the text an invaluable reference and resource to use throughout their careers. In addition, the current edition features extensive updates incorporating the most recent financial data and latest references, as well as a new chapter devoted to managing corporate risk, an essential topic for success in today’s high-stakes business environment. key Features The Fourth Edition includes an entirely new chapter on managing corporate risk, which provides a comprehensive framework for this essential topic and explores corporate risk management within the context of creating value--the core objective of the entire text. The chapter devoted to company valuation has been completely revised based on the concept of “enterprise value,” which has surged in popularity and gained widespread use among financial analysts, making it an important standard for informed executives to master. A new set of companies--The Home Depot, Inc., and Lowes Companies, Inc.--are now featured in a series of integrated examples that provides a step-by-step illustration of how to perform a financial analysis using key concepts and tools presented in chapters two through five. Every chapter has been extensively updated to reflect the latest financial information, as well as current trends, issues, and tools essential for today’s successful executives and leading financial analysts. The new edition includes expanded coverage of raising capital and the valuation of financial securities, offering additional insights and greater depth to help students master these important topics. This well-balanced text emphasizes rigorous analysis but avoids complicated formulas that have little direct application to decision-making. As such, the text fills a critical gap between overly simplistic introductory accounting and finance manuals for non-financial managers and more advanced texts in corporate finance, which can become bogged down in minutiae. The text is organized around the underlying principle that firms should be managed to create value for their owners, a concept that is introduced in the first chapter, which also outlines the structure of the text and explains how each chapter and major topic relates to the central theme of value creation. The authors have extensive expertise in finance and have based much of the text on courses they have taught to more than 2,000 successful managers and executives around the globe. Each chapter is self-contained, providing optimal flexibility for instructors and making the text an ideal resource and reference students are likely to find useful throughout their careers. Topics are presented using a “problem-scenario” approach, which provides the context of a financial management problem that executives are likely to face on a day-to-day basis, making the material much more useful and meaningful for students. Table of Contents PART I: INTRODUCTION 1. Financial Management and Value Creation: An Overview 2. Understanding Balance Sheets and Income Statements PART II: FINANCIAL DIAGNOSIS AND MANAGEMENT 3. Assessing Liquidity and Operational Efficiency 4. Measuring Cash Flows 5. Diagnosing Profitability, Risk, and Growth PART III: INVESTMENT DECISIONS 6. Using the Net Present Value Rule to Make Value-Creating Investment Decisions 7. Alternatives to the Net Present Value Rule 8. Identifying and Estimating a Project’s Cash Flows PART IV: FINANCING DECISIONS 9. Raising Capital and Valuing Securities 10. Estimating the Cost of Capital 11. Designing a Capital Structure PART V: BUSINESS DECISIONS 12. Valuing and Acquiring a Business 13. Managing Corporate Risk 14. Making International Business Decisions 15. Managing for Value Creation.