Name: Financial management

Type: textbook

publishing house: INFRA-M

The year of publishing: 2003

Pages: 240

Format:PDF

file size: 13.8 MV

Archive size: 13.5 MV

Description: The training course covers topics, questions and concepts, the study of which is provided for by the requirements of the new ones introduced in 2000. State standards higher vocational education Russian Federation in the specialties "Accounting, analysis and audit", "Finance and credit", etc., program issues full courses financial management of leading universities developed countries.

The basic concepts of the theory of financial markets and the theory of capital structure are considered, the methodology financial analysis and planning, evaluation criteria investment projects, basic management decisions in the field of enterprise finance, examples and reference materials are provided. It is intended for students and teachers of economic specialties of universities and practitioners.

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Foreword

CHAPTER 1. FINANCIAL MANAGEMENT AND THEORIES OF FINANCE

Goals, objectives, role and content of financial management

Ideal capital markets and discounted cash flow

The theory of capital structure and the theory of dividends Modigliani and Miller

Portfolio theory and - model for assessing the profitability of financial assets

Option pricing theory

Market efficiency and the ratio between risk and return

Theory of agency relations

Asymmetric Information Theory

Risk of individual financial assets

Risk Meter - Iota Ratio

CHAPTER 2. RISK AND RETURN

Analysis of the return and risk of assets in the portfolio

Effective portfolios

Choosing the optimal portfolio

Model for assessing the profitability of financial assets CAPM

Capital market line and market line valuable papers

Intangible and financial assets

Beta concept

Theory arbitrage pricing

CHAPTER 3. VALUATION OF SHARES, BONDS AND OPTIONS

Basic Financial Asset Pricing Model (DCF)

Bond valuation

Valuation of preferred shares

Valuation of ordinary shares

Fundamentals of the theory of options

Black-Scholes option pricing model

Option pricing and corporate financial policy

CHAPTER 4. CAPITAL PRICE AND INVESTMENT EFFICIENCY

Components of capital and their price

The price of the main sources of capital

Valuation of Retained Earnings and Newly Issued Ordinary Shares

Weighted average cost of capital

Capital budget

Investment Efficiency Criteria

CHAPTER 5. ANALYSIS OF CASH FLOWS OF INVESTMENT PROJECTS AND CAPITAL BUDGET RISK

Cash flow estimate

Asset substitution, flow bias and managerial options

Projects with unequal durations, termination of projects, accounting for inflation

Risk associated with the project

Single and intracompany risks

Market risk

Accounting for risk and cost of capital when adopting an investment budget

CHAPTER 6 OPTIMUM CAPITAL BUDGET AND CAPITAL STRUCTURE DECISION

Investment Opportunity Graph and Graph marginal price capital

Joint analysis of MCC and IOS charts

Problems and practice of optimizing the capital investment budget

General production and financial risks

Capital structure theory: Modigliani-Miller models

Market production and financial risks

Financial hardship costs and agency costs

CHAPTER 7. CAPITAL STRUCTURE AND DIVIDEND POLICY

Capital Structure Theory

Problems and approaches to choosing a target capital structure

Theoretical basis dividend policy

Dividend policy in practice

Dividend Policy Factors, Share Repurchases and Share Payments

CHAPTER 8

Ordinary shares

Transformation of an enterprise into a public company and the procedure for issuing ordinary shares

Transformation into a closed company and the allocation of part of the capital for open sale

Investment banking process

Debt instruments

Operations for early redemption of bonds with replacement for new ones

CHAPTER 9. HYBRID AND RENT FINANCING

Preference shares

Warrants

convertible securities

Rent and tax effect

Tenant valuation

Landlord valuation

CHAPTER 10. FINANCIAL ANALYSIS AND PLANNING

Financial statements

Analytical coefficients

Vertical and factor analysis

Strategic, operational and financial plans

Forecasting the volume of sales and financial forecasting

External financing needs and acceptable growth rate

Problems and methods of forecasting and planning

CHAPTER 11. SHORT-TERM FINANCING AND MANAGEMENT OF QUICK-LIQUID ASSETS

Short term financial planning and money circulation

Funding strategies working capital

Sources of short-term financing

Cash budget

Determination of the target cash balance

Management methods in cash

Securities management

CHAPTER 12. MANAGEMENT OF INVENTORIES, RECEIVABLES AND CREDIT POLICY

Inventory Management

Order batch and production series optimization

Accounts receivable management

Credit policy

Incremental Credit Policy Analysis

List of abbreviations and symbols

Application

Archive size 13.5 MV

Financial management.Basovsky L.E.

CONTENT
Preface 7
CHAPTER 1. FINANCIAL MANAGEMENT AND THEORIES OF FINANCE 10
Goals, objectives, role and content of financial management 10
Ideal capital markets and discounted cash flow 12
The theory of capital structure and the theory of dividends Modigliani and Miller 13
Portfolio theory and model for assessing the return on financial assets 14
Option pricing theory 15
Market efficiency and risk-reward ratio 15
Agency theory 18
Asymmetric Information Theory 20
Risk of individual financial assets 21
Risk Meter - Iota Ratio 23
CHAPTER 2. RISK AND RETURN 27
Analysis of return and risk of assets in a portfolio 27
Effective portfolios 30
Choosing the optimal portfolio 34
Model for assessing the profitability of financial assets CAPM 35
Capital Market Line and Securities Market Line 36
Intangible and financial assets 39
40 beta concept
Arbitrage pricing theory 43
CHAPTER 3 VALUATION OF STOCK, BONDS AND OPTIONS 45
Basic Financial Asset Pricing Model (DCF) 45
Bond valuation, 47
Valuation of preferred shares 50
Valuation of ordinary shares 51
Fundamentals of Option Theory 55
Black-Scholes Option Pricing Model 58
Option pricing and corporate financial policy 60
CHAPTER 4. CAPITAL PRICE AND INVESTMENT EFFICIENCY 63
Components of capital and their price 63
Price of main sources of capital 64
Valuation of Retained Earnings and Newly Issued Ordinary Shares 66
Weighted average cost of capital 70
Capital budget 72
Investment efficiency criteria 73
CHAPTER 5. CASH FLOW ANALYSIS OF INVESTMENT PROJECTS AND CAPITAL BUDGET RISK 79
Cash flow estimate 79
Asset substitution, flow bias and managerial options 82
Projects with unequal durations, termination of projects, accounting for inflation 86
Risk associated with the project 89
Single and intracompany risks 92
Market risk 94
Accounting for risk and cost of capital when adopting an investment budget 96
CHAPTER 6. OPTIMUM CAPITAL BUDGET AND CAPITAL STRUCTURE DECISIONS 98
Investment Opportunity Chart and Marginal Price of Capital Chart 98
Joint analysis of MCC and IOS 103 charts
Problems and practice of capital budget optimization 105
General production and financial risks 107
Capital structure theory: Modigliani-Miller models 110
Market production and financial risks 111
Financial difficulties and agency costs 113
CHAPTER 7. CAPITAL STRUCTURE AND DIVIDEND POLICY 116
Theory of capital structure 116
Problems and approaches to choosing a target capital structure 120
Theoretical foundations of dividend policy 125
Dividend policy in practice 128
Dividend Policy Factors, Share Repurchases and Share Payments 130
CHAPTER 8
Ordinary shares 134
Transformation of an enterprise into a public company and the procedure for issuing ordinary shares 136
Transformation into a closed company and the allocation of part of the capital for public sale 139
Investment banking process 141
etc.

The training course covers topics, questions and concepts, the study of which is provided for by the requirements of the new State Standards of Higher Professional Education of the Russian Federation, put into effect in 2000, in the specialties "Accounting, Analysis and Audit", "Finance and Credit", etc., questions programs of full courses in financial management of leading universities in developed countries. Basic concepts of the theory of financial markets and the theory of capital structure, methods of financial analysis and planning, criteria for evaluating investment projects, basic management decisions in the field of enterprise finance are considered, examples and reference materials are given.
Designed for students and teachers of economic specialties of universities and practitioners.

Compulsory study of the discipline "Financial Management" by students of economic specialties of universities, including such as "Accounting, Analysis and Audit", "Finance and Credit", is determined by the requirements of the Russian state educational standards of higher professional education introduced in 2000.
Financial management as a science dedicated to the methodology and techniques of enterprise financial management has been formed within the framework of modern theory finance by supplementing it with analytical sections accounting. The first books on the new discipline appeared in English-speaking countries in the early 1960s.
The content of financial management is determined by the targets of the owners and top management personnel of enterprises and organizations. The main goals are to ensure the maximum growth rate of the enterprise price, or maximization of its price, the achievement of which is ensured by increasing the capitalized value of the enterprise.

CONTENT
Preface 7
CHAPTER 1. FINANCIAL MANAGEMENT AND THEORIES OF FINANCE 10
Goals, objectives, role and content of financial management 10
Ideal capital markets and discounted cash flow 12
The theory of capital structure and the theory of dividends Modigliani and Miller 13
Portfolio theory and model for assessing the return on financial assets 14
Option pricing theory 15
Market efficiency and risk-reward ratio 15
Agency theory 18
Asymmetric Information Theory 20
Risk of individual financial assets 21
Risk Meter - Iota Ratio 23
CHAPTER 2. RISK AND RETURN 27
Analysis of return and risk of assets in a portfolio 27
Effective portfolios 30
Choosing the optimal portfolio 34
Model for assessing the profitability of financial assets CAPM 35
Capital Market Line and Securities Market Line 36
Intangible and financial assets 39
40 beta concept
Arbitrage pricing theory 43
CHAPTER 3 VALUATION OF STOCK, BONDS AND OPTIONS 45
Basic Financial Asset Pricing Model (DCF) 45
Bond Valuation 47
Valuation of preferred shares 50
Valuation of ordinary shares 51
Fundamentals of Option Theory 55
Black-Scholes Option Pricing Model 58
Option pricing and corporate financial policy 60
CHAPTER 4. CAPITAL PRICE AND INVESTMENT EFFICIENCY 63
Components of capital and their price 63
Price of main sources of capital 64
Valuation of Retained Earnings and Newly Issued Ordinary Shares 66
Weighted average cost of capital 70
Capital budget 72
Investment efficiency criteria 73
CHAPTER 5. CASH FLOW ANALYSIS OF INVESTMENT PROJECTS AND CAPITAL BUDGET RISK 79
Cash flow estimate 79
Asset substitution, flow bias and managerial options 82
Projects with unequal durations, termination of projects, accounting for inflation 86
Risk associated with the project 89
Single and intracompany risks 92
Market risk 94
Accounting for risk and cost of capital when adopting an investment budget 96
CHAPTER 6. OPTIMUM CAPITAL BUDGET AND CAPITAL STRUCTURE DECISIONS 98
Investment Opportunity Chart and Marginal Price of Capital Chart 98
Joint analysis of MCC and IOS 103 charts
Problems and practice of capital budget optimization 105
General production and financial risks 107
Capital structure theory: Modigliani-Miller models 110
Market production and financial risks 111
Financial difficulties and agency costs 113
CHAPTER 7. CAPITAL STRUCTURE AND DIVIDEND POLICY 116
Theory of capital structure 116
Problems and approaches to choosing a target capital structure 120
Theoretical foundations of dividend policy 125
Dividend policy in practice 128
Dividend Policy Factors, Share Repurchases and Share Payments 130
CHAPTER 8
Ordinary shares 134
Transformation of an enterprise into a public company and the procedure for issuing ordinary shares 136
Transformation into a closed company and the allocation of part of the capital for public sale 139
Investment banking process 141
Debt instruments 142
Debt contract terms and bond ratings 145
Operations for early redemption of bonds with replacement for new ones 147
CHAPTER 9. HYBRID AND RENT FINANCING 151
Preferred shares 151
Warrants 152
Convertible securities 156
Rent and tax effect 158
Tenant valuation 161
Lease valuation by landlord 165
CHAPTER 10. FINANCIAL ANALYSIS AND PLANNING 168
Financial reporting 168
Analytical coefficients 171
Vertical and factor analysis 175
Strategic, operational and financial plans 176
Sales forecasting and financial forecasting 179
External financing needs and acceptable growth rate 181
Problems and methods of forecasting and planning 183
CHAPTER 11. SHORT-TERM FINANCING AND MANAGEMENT OF QUICK-LIQUID ASSETS 187
Short-term financial planning and money circulation 187
Working Capital Financing Strategies 190
Sources of short-term financing 193
Cash budget 196
Determination of the target cash balance 199
Cash Management Methods 202
Securities management 204
CHAPTER 12. MANAGEMENT OF INVENTORIES, RECEIVABLES AND CREDIT POLICY 205
Inventory management 205
Order lot and batch optimization 207
Accounts receivable management 211
Credit policy 216
Incremental analysis of credit policy 221
Conclusion: What's Next (Special Issues in Financial Management) 224
Recommended Reading 228
List of abbreviations and symbols 229
Application 231

CONTENT
Preface 7
CHAPTER 1. FINANCIAL MANAGEMENT AND THEORIES
FINANCE 10
Goals, objectives, role and content of the financial
management, 10
Ideal capital markets and discounted
cash flow 12"
Capital Structure Theory and Dividend Theory
Modigliani and Miller 13
Portfolio theory and - model for assessing profitability
financial assets 14
Option pricing theory 15
Market efficiency and risk ratio
and yield 15
Agency theory 18
Asymmetric Information Theory 20
Risk of individual financial assets: 21
Risk Meter -
iota-factor ". 23
CHAPTER 2. RISK AND RETURN 27
Analysis of return and risk of assets in a portfolio 27
Effective portfolios 30
Choosing the optimal portfolio 34
Model for assessing the profitability of financial assets CAPM 35
Capital Market Line and Securities Market Line 36
Intangible and financial assets 39
Beta concept, 40
The theory of arbitrage pricing..". 43
CHAPTER 3 VALUATION OF STOCK, BONDS AND OPTIONS 45
Basic Financial Asset Pricing Model (DCF) 45
Bond valuation, *. 47
Valuation of preferred shares 50
3
Valuation of ordinary shares 51
Fundamentals of Option Theory 55
Black-Scholes Option Pricing Model 58
Option pricing and corporate finance
politics 60
CHAPTER 4. CAPITAL VALUE AND EFFICIENCY
INVESTMENT 63
Components of capital and their price:... 63
Price of main sources of capital 64
Valuation of retained earnings and common stock
new issue 66
Weighted average cost of capital 70
Capital budget 72
Investment efficiency criteria 73
CHAPTER 5. CASH FLOW ANALYSIS
INVESTMENT PROJECTS AND BUDGET RISK
INVESTMENT 79
Cash flow estimate 79
Asset substitution, bias in flow estimates
and management options 82
Projects with unequal durations, termination of projects,
accounting for inflation 86
Risk associated with the project 89
Single and intracompany risks 92
Market risk 94
Accounting for risk and cost of capital when adopting a budget
investment 96
CHAPTER 6. OPTIMUM CAPITAL BUDGET
AND CAPITAL STRUCTURE DECISIONS 98
Investment Opportunity Graph and Graph
marginal price of capital, 98
Joint analysis of MCC and IOS 103 charts
Problems and practice of budget optimization
capital investment 105
General production and financial risks 107
Capital structure theory: Modigliani-Miller models 110
Market production and financial risks 1 1 1
4
Financial difficulties and agency costs
costs 113
CHAPTER 7. CAPITAL AND DIVIDEND STRUCTURE
POLICY 116
Theory of capital structure 116
Problems and approaches to choosing a target capital structure 120
Theoretical foundations of dividend policy 125
Dividend policy in practice 128
Dividend Policy Factors, Share Repurchases and Payouts
shares 130
CHAPTER 8. COMMON SHARES, INVESTMENT
PROCESS AND LONG-TERM LOAN CAPITAL 134
Ordinary shares 134
Transformation of the enterprise into a public company
and the procedure for issuing ordinary shares 136
Conversion to private company and spin-off
capital for public sale." 139
Investment banking process 141
Debt instruments 142
Debt contract terms and bond ratings 145
Operations on early redemption of bonds with replacement
for new ones.¦ 147
CHAPTER 9. HYBRID AND RENTAL
FINANCING 151
Preferred shares 151
Warrants 152
convertible securities.
156
Rent and tax effect 158
Tenant valuation 161
Lease valuation by landlord 165
CHAPTER 10. FINANCIAL ANALYSIS
AND PLANNING 168
Financial reporting 168
Analytical coefficients 171
Vertical and factor analysis 175
Strategic, operational and financial plans 176
5
Forecasting sales volume and financial
forecasting 179
External financing needs and acceptable pace
growth 181
Problems and methods of forecasting and planning 183
CHAPTER 11. SHORT-TERM FINANCING
AND MANAGEMENT OF QUICK LIQUID ASSETS 187
Short-term financial planning and cash
circuit 187
Working Capital Financing Strategies 190
Sources of short-term financing 193
Cash budget 196
Determination of the target cash balance 199
Cash Management Methods 202
Securities management,204
CHAPTER 12. MANAGEMENT OF INVENTORIES, RECEIVABLES
DEBT AND CREDIT POLICY 205
Inventory management 205
Order lot and batch optimization 207
Accounts receivable management 211
Credit policy 216
Incremental analysis of credit policy 221
Conclusion: what's next (special questions
financial management) 224
Recommended Reading 228
List of abbreviations and symbols 229
Application