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| Fundamentals of Financial Management 15th Edition by Brigham and Houston |
“Fundamentals of Financial Management” by Eugene F. Brigham and Joel F. Houston is a comprehensive textbook that provides a solid foundation in the principles and concepts of financial management. The book covers various aspects of financial management, including financial analysis, valuation, capital budgeting, risk and return, working capital management, and long-term financing decisions.
The authors begin by introducing the role of financial management in an organization and its importance in maximizing shareholder wealth. They discuss financial statements and their analysis, highlighting the key ratios and metrics used to assess a company’s financial performance.
The book explores the time value of money and its applications in discounted cash flow analysis, bond and stock valuation, and capital budgeting decisions. It delves into the concepts of risk and return, explaining how investors evaluate investment opportunities based on their risk preferences.
Additionally, the authors discuss the various sources of short-term and long-term financing available to firms. They delve into working capital management, including cash, inventory, and receivables management, and emphasize the importance of efficient working capital practices.
The latter chapters cover topics such as capital structure decisions, cost of capital, and dividend policy. The authors explain how firms determine the optimal mix of debt and equity financing and discuss the impact of capital structure choices on a firm’s value. They also delve into the cost of capital estimation and the factors affecting it. Furthermore, the book addresses dividend policy and the considerations involved in determining whether to distribute earnings to shareholders or reinvest them in the company.
Throughout the book, Brigham and Houston provide real-world examples, case studies, and end-of-chapter problems to reinforce the understanding of the concepts presented. These practical applications help readers grasp the complexities of financial management and develop analytical skills.
In summary, “Fundamentals of Financial Management” is a comprehensive textbook that covers essential topics in financial management. It offers a balanced mix of theory and practice, making it suitable for students, professionals, and anyone seeking a solid understanding of financial management principles.
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