Robert N. Holt, Ph.D., CPA
Analyzing Financial Statements
Projecting Earnings and Cash Flow
Creating Value for Stockholders
Calculating the Cost of Raising Capital
Assessing Merger and Acquisition Targets
Audience: Managers and analysts responsible for investment, finance, or credit decisions, as well as those people who need to understand the role of finance within a corporation.
Abstract: A practitioner-oriented text and software package, Understanding Corporate Finance is designed to provide the reader with the basic analytical skills common to all disciplines within the field of finance.
The text begins with an extensive discussion of financial statement analysis, initially focusing upon the role of accounting and the information presented in corporate financial statements. In the second half of Chapter 1, financial analysis using ratios, vertical and horizontal percentages, and comparative methodologies is investigated.
Chapter 2 discusses those processes vital to corporate and financial planner, and credit analysts- projecting financial statements into the future. The chapter emphasizes both the quantitative and qualitative factors to be considered when making projections
Chapter 3 takes a more theoretical slant by discussing the financial objective of a business entity- the creation of value for its owners. Value can be created through financing decisions, in effect, taking advantage of capital market inefficiencies, and through investments which yield returns in excess of those required by the suppliers of capital. The concepts of present and future value are introduced in this chapter.
Chapter 4 and 5 considers the measurement of the returns (capital budgeting) and the cost of the associated capital (Weighted Average Cost of Capital, Capital Asset Pricing Model, and other models).
In Chapter 6 the contemporary topic of value creation through mergers and acquisitions is introduced. Students will learn of several methods of determining the value of a firm.
Finally, in Chapter 7 students will be cast into the role of financial manager, using FRICTO analysis (Flexibility, Risk, Income, Control, Timing, and other factors) to determine whether to use debt, equity, or a combination of the two to finance investment plans.