Corporate Finance with Financial Modelling

This comprehensive guide dives into the fundamentals of corporate finance and the critical role of financial modelling. It introduces corporate finance as the new paradigm shift in financial management. It covers the spectrum from financial analysis to strategic financial planning, offering a mix of real-world examples, case studies, and practical exercises. With an emphasis on practical application, this book equips readers with the knowledge to make informed financial decisions, thereby contributing to businesses' long-term sustainability and success.

It's designed for a broad audience, including students, finance professionals, and anyone interested in enhancing their understanding of corporate financial decision-making processes.

This book is structured around five core principles, which are as follows:

• Long-term Investment Financing – Emphasizes the necessity of funding long-term investments with long-term sources of capital
• Matching Costs with Incomes – Advocates for aligning 'Fixed Costs or Regular Outflows' with 'Fixed Incomes or Regular Inflows'
• Wealth Over Appearances – Highlights that while money may project wealth, wise financial decisions ensure lasting prosperity
• Decision-Making – Suggests that the best financial decisions are made with a focus on facts ('Eyes Open') rather than opinions ('Ears Closed').
• Short-term Financing – Stresses the importance of meeting short-term needs with short-term financial sources

The Present Publication is the Latest Edition, authored by Prof. Rishi Mehra and Dr Ruchi Arora, with the following noteworthy features:

• [Comprehensive Coverage] This book covers a broad ranking of topics ranging from:
• Financial Statement Analysis
• Cash Flow Forecasting
• Capital Budgeting
• Risk Management
• Advanced Subjects, such as:
• Valuation Techniques
• Mergers & Acquisitions
• Strategic Financial Planning
• [Practical Approach] Beyond theoretical concepts, the book emphasizes hands-on implementation, offering:
• Step-By-Step Guidance
• Illustrations
• Global Case Studies
• Exercises in Both Manual & Excel Formats
• [Learning Strategies] This book uses the following to maximize learning outcomes:
• Sequential Reading
• Active Participation
• Use of Supplementary Resources
• Application of Concepts to Real-World Scenarios
• [Blend of Theory with Practice] This book uniquely blends practical insights with comprehensive theoretical underpinnings, making it useful for anyone looking to enhance their understanding and application of corporate finance and financial modelling in real-world scenarios

The detailed contents of the book are as follows:

• Foundations for Corporate Finance
• Basics of Corporate Finance and Financial Modelling
• Chapter 1 provides an overview of corporate finance, including a glance at the financial system, institutions, instruments, and markets.
• Chapter 2 discusses the time value of money, its relevance, inflation, interest rates, discounting, and annuities, along with a financial model on loan amortization
• Chapter 3 covers financial statement analysis, its purpose, tools, techniques, and types of ratios, and includes a financial model for financial analysis
• Chapter 4 discusses risk and return analysis with an associated financial model for evaluating risk and return
• Long-Term Decisions in Financial Management
• Financing Decision – Capital Structure Analysis
• Chapters 5 and 6 make the reader understand the sources of long-term capital, the cost of capital, capital structure theories, and factors affecting costs, and include a WACC model
• Chapter 7 discusses operating and financial leverage with a related financial model on leverage
• Investment Decision – Capital Budgeting Techniques
• Chapters 8 and 9 focus on cash flow estimation, risk evaluation, capital budgeting tools and techniques, including a financial model on capital budgeting
• Short-Term Decisions in Financial Management
• Working Capital Management
• Chapter 10 examines the fundamentals of working capital management, covering current assets, liabilities, the purpose and dimensions of working capital, factors affecting its composition, and includes a working capital model
• Chapter 11 is about receivable management, including credit policy, appraisal, and management
• Chapter 12 discusses inventory management, its advantages, costs, techniques, valuation techniques and includes an inventory management model
• Chapter 13 covers cash management tools, Baumol and Miller & ORR models, and includes a cash management model
• Strategic Decisions in Corporate Finance
• Strategic Corporate Decisions
• Chapters 14 to 16 cover fundamentals of dividend decisions, mergers & acquisitions, and valuation of securities with associated financial models for corporate actions
• New Developments
• New Developments in Financial Management
• Chapter 17 discusses new developments in corporate finance and includes mathematical tables for reference