Principles of Managerial Finance Global & Southern African Perspectives

Name: Principles of Managerial Finance Global & Southern African Perspectives
Brand: Pearson HigherEducation
Price: 17.49 EUR
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Ashenafi Fanta John Hall Elmarie Louw Patricia Makoni Maluleka Ngwenya Marolee Smith Barry Strydom Daniel Makina(Autor*in)

Pearson HigherEducation (Verlag)

3. Auflage

Erschienen am 20. April 2023

870 Seiten

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978-1-4857-1887-1 (ISBN)

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Inhalt

Front Cover
Brief Contents
Detailed Table of Contents
Preface
About the authors
How to use this book
Part 1: Introduction To Managerial Finance
Chapter 1: The role of managerial finance
Corporate governance woes at Eskom
1.1: Finance and the firm
What is finance?
Career opportunities in finance
Legal forms of business organisation
Why study managerial finance?
Review questions
1.2: Goal of the firm
Maximise shareholder wealth
Maximise profit
What about stakeholders?
The role of business ethics
Focus on ethics
Review questions
Focus on ethics
1.3: Managerial finance function
Organisation of the finance function
Relationship to economics
Relationship to accounting
Primary activities of the financial manager
Review questions
1.4: Governance and agency
Corporate governance
The agency issue
Review questions
Summary
Opener-in-review
Self-test problems
Warm-up exercises
Problems
Spreadsheet exercise
Chapter 1 Case study: Management remuneration and financial performance of JSE firms
Chapter 2: The financial market enviroment
The regulation and supervision of South African banks
2.1: Financial institutions and markets
Financial institutions
Commercial banks, investment banks, and the shadow banking system
Financial markets
The relationship between institutions and markets
The money market
The capital market
Focus on practice
Review questions
Focus on Ethics
2.2: Financial risks and bank failures
Credit risk
Counterparty credit risk
Market risk
Operational risk
Interest rate risk
Liquidity risk
Review questions
2.3: Regulation of financial institutions and markets
Regulations governing the financial sector in South Africa
Review questions
Summary
Opener-in-review
Self-test problem
Warm-up exercises
Advanced problems
Spreadsheet exercise
Chapter 2 Case study: The pros and cons of being publicly listed
Integrative Case study 1: Lewanika Enterprises
Part 2: Financial tools
Chapter 3: Financial statements and analysis
Leopard Clothing Company
3.1: The shareholders' report
Global focus
The letter to shareholders
The International Accounting Standard 1 (IAS 1) and the four key financial statements
Focus on ethics
Notes to the financial statements
Review questions
3.2: Using financial ratios
Interested parties
Types of ratio comparisons
Cautions about using ratio analysis
Categories of financial ratios
Review questions
3.3: Liquidity ratios
Current ratio
Quick (acid-test) ratio
Review question
3.4: Activity ratios
Inventory turnover
Average collection period
Average payment period
Total asset turnover
Review question
3.5: Debt ratios
Debt ratio
Times interest earned ratio
Review questions
3.6: Profitability ratios
Common-size statements of comprehensive income
Gross profit margin
Operating profit margin
Net profit margin
Earnings per share (EPS)
Return on total assets (ROA)
Return on ordinary shareholder's equity (ROE)
Review questions
3.7: Market ratios
Price/earnings (P/E) ratio
Market/book (M/B) ratio
Review question
3.8: A complete ratio analysis
Summarising all ratios
DuPont system of analysis
Applying the DuPont system
Review questions
Summary
Opener-in-review
Self-test problems
Warm-up exercises
Problems
Chapter 3 Case study: Assessing Global Manufacturing Company's current financial position
Spreadsheet exercise
Chapter 4: Long and short-term financial planning
Not streaming at Netflix - cash flow
4.1: The financial planning process
Long-term (strategic) financial plans
Short-term (operating) financial plans
Review questions
4.2: Measuring the firm's cash flow
Depreciation
Depreciation methods
Developing the statement of cash flows
Interpreting the statement
Free cash flow
Focus on ethics
Focus on practice
Review questions
4.3: Cash planning: cash budgets
The sales forecast
Preparing the cash budget
Evaluating the cash budget
Coping with uncertainty in the cash budget
Cash flow within the month
Review questions
4.4: Profit planning: pro forma statements
Preceding year's financial statements
Sales forecast
Review question
4.5: Preparing the pro forma statement of comprehensive income
Considering types of costs and expenses
Review questions
4.6: Preparing the pro forma statement of financial position
Review questions
4.7: Evaluation of pro forma statements
Review questions
Summary
Opener-in-review
Self-test problems
Warm-up exercises
Advanced problems
Spreadsheet exercise
Chapter 4 Case study: Preparing ProtectU's pro forma financial statements
Chapter 5: Time value of money
The reality of South Africa's retirees
5.1: The role of time value in finance
Future value versus present value
Computational tools
Basic patterns of cash flow
Review questions
5.2: Single amounts
Future value of a single amount
Compound interest versus simple interest
Present value of a single amount
Comparing present value and future value
Review questions
5.3: Annuities
Types of annuities
Finding the future value of an ordinary annuity
Finding the present value of an ordinary annuity
Finding the future value of an annuity due
Finding the present value of an annuity due
Finding the present value of a perpetuity
Review questions
5.4: Mixed streams
Future value of a mixed stream
Present value of a mixed stream
Review question
5.5: Compounding interest more frequently than annually
Semi-annual compounding
Quarterly compounding
Monthly compounding
A general equation for compounding more frequently than annually
Using computational tools for compounding more frequently than annually
Continuous compounding
Nominal and effective annual rates of interest
Review questions
Focus on ethics
5.6: Special applications of the time value
Determining deposits needed to accumulate a future sum
Loan amortisation
Finding interest or growth rates
Focus on practice
Finding an unknown number of periods
Summary
Opener-in-review
Self-test problems
Warm-up exercises
Problems
Advanced problems
Spreadsheet exercise
Chapter 5 Case study: Funding Leonard Chaba's retirement annuity
Integrative Case study 2: Efficient Software Ltd
Part 3: Valuation of securities
Chapter 6: Interest rates and bond valuation
Eskom bonds
6.1: Interest rates and required returns
Interest rate fundamentals
Term structure of interest rates
Focus on practice
Risk premiums: issuer and issue characteristics
Review questions
6.2: Government and corporate bonds
Legal aspects of corporate bonds
Cost of bonds to the issuer
General features of a bond issue
Bond yields
Bond prices
Bond ratings
Focus on ethics
Common types of bonds
International bond issues
Review questions
6.3: Valuation fundamentals
Key inputs
Basic valuation model
Review questions
6.4: Bond valuation
Bond fundamentals
Bond valuation
Semi-annual interest rates and bond values
Changes in bond values
Yield to maturity (YTM)
Review questions
Summary
Opener-in-review
Self-test problems
Warm-up exercises
Problems
Spreadsheet exercise
Chapter 6 Case study: Evaluating Marlene Mashiymbe's proposed investment in Aluta Industries' bonds
Chapter 7: Share valuation
Vodacom: Initial public offering
7.1: Differences between debt and equity capital
Voice in management
Claims on income and assets
Maturity
Tax treatment
Review question
7.2: Ordinary and preference share capital
Ordinary share capital
Preference share capital
Interpreting share quotations
Review questions
7.3: Ordinary share valuation
Market efficiency and stock valuation
Ordinary share dividend valuation model
Focus on practice
Free cash flow share valuation model
Other approaches to ordinary share valuation
Focus on ethics
Review questions
7.4: Decision-making and ordinary share value
Changes in expected dividends
Changes in risk
Combined effect
Review questions
Summary
Opener-in-review
Self-test problems
Warm-up exercises
Problems
Advanced problems
Chapter 7 Case study: Assessing the impact of Babeca Wholesalers' proposed risky investment on its share value
Integrative Case study 3: Performac Automotive International
Part 4: Risk and the required rate of return
Chapter 8: Risk and return
Risk management at Remgro Ltd
8.1: Risk and return fundamentals
Risk defined
Return defined
Focus on ethics
Risk preferences
Review questions
8.2: Risk of a single asset
Risk assessment
Risk measurement
Review questions
8.3: Risk of a portfolio
Portfolio return and standard deviation
Correlation
Diversification
Correlation, diversification, risk and return
International diversification
Global focus
Review questions
8.4: Risk and return: The capital asset pricing model (CAPM)
Types of risk
The model: CAPM
Review questions
Summary
Opener-in-review
Self-test problems
Warm-up exercises
Problems
Advanced problem
Chapter 8 Case study: Analysing risk and return on Booster Products' investments
Spreadsheet exercise
Chapter 9: The cost of capital
Growthpoint Properties Ltd
9.1: Overview of the cost of capital
Some key assumptions
The basic concept
Focus on ethics
Specific sources of capital
Review questions
9.2: Cost of long-term debt
Net proceeds
The before-tax cost of debt
The after-tax cost of debt
Review questions
9.3: Cost of a preference share
Preference share dividends
Calculating the cost of a preference share
Review question
9.4: Cost of an ordinary share
Finding the cost of ordinary share equity
Cost of retained earnings
Cost of new issues of ordinary shares
Review questions
9.5: Weighted average cost of capital
Calculating weighted average cost of capital (WACC)
Weighting schemes
Review questions
9.6: Marginal cost and investment decisions
The weighted marginal cost of capital (WMCC)
Focus on practice
Investment opportunities schedule (IOS)
Using the WMCC and IOS to make financing/investment decisions
Review questions
Summary
Opener-in-review
Self-test problem
Warm-up exercises
Problems
Advanced problem
Chapter 9 Case study: Making Tackle Bob's financing/investment decision
Spreadsheet exercise
Integrative Case study 4: Eskimo Cooling's green air conditioners
Part 5: Long-term investment decisions
Chapter 10: Capital budgeting techniques
The gold standard for evaluating gold mines
10.1: Overview of capital budgeting
Motives for capital expenditure
Steps in the process
Basic terminology
Benonxi Company's relevant cash flows
Review question
10.2: Payback period
Decision criteria
Pros and cons of payback periods
Review questions
10.3: Net present value (NPV)
Decision criteria
NPV and the profitability index (PI)
NPV and Economic Value Added
Review questions
10.4: Internal rate of return (IRR)
Decision criteria
Calculating the IRR
Review questions
10.5: Comparing NPV and IRR techniques
Net present value profiles
Conflicting rankings
Which approach is better?
Review questions
Focus on ethics
Summary
Opener-in-review
Self-test problem
Warm-up exercises
Problems
Advanced problems
Chapter 10 Case study: Making Clean Air's new ventilator investment decision
Spreadsheet exercise
Chapter 11: Capital budgeting cash flows
Eskom
11.1: Relevant project cash flows
Major cash flow components
Focus on ethics
Expansion versus replacement decisions
Sunk costs and opportunity costs
International capital budgeting and long-term investments
Review questions
Global focus
11.2: Finding the initial investment
Installed cost of new asset
After-tax proceeds from sale of old asset
Change in net working capital
Calculating the initial investment
Review questions
11.3: Finding the operating cash flows
Interpreting the term cash flows
Interpreting the term after-tax
Interpreting the term incremental
Review questions
11.4: Finding the terminal cash flow
Proceeds from sale of assets
After-tax proceeds from the sale of new and old assets
Change in net working capital
Review question
11.5: Summarising the relevant cash flows
Review question
Summary
Opener-in-review
Self-test problems
Warm-up exercises
Problems
Advanced problems
Chapter 11 Case study: Developing relevant cash flows for Everest Publishing Company's machine renewal or replacement decision
Spreadsheet exercise
Chapter 12: Risk and refinements in capital budgeting
MTN's Nigerian experience
12.1: Introduction to risk in capital budgeting
Review question
12.2: Behavioural approaches for dealing with risk
Break-even analysis
Scenario analysis
Simulation
Focus on practice
Review questions
12.3: International risk considerations
Adjusting for currency risk
Review question
12.4: Risk-adjusted discount rates
Determining risk-adjusted discount rates (RADRs)
Review of CAPM
Focus on ethics
Applying RADRs
Portfolio effects
RADRs in practice
Review questions
12.5: Capital budgeting refinements
Comparing projects with unequal lives
Recognising real options
Capital rationing
Review questions
Summary
Opener-in-review
Self-test problem
Warm-up exercises
Problems
Advanced problem
Chapter 12 Case study: Evaluating MargiMedco Equipment's risky plans for increasing its production capacity
Spreadsheet exercise
Integrative Case study 5: UniMining Manufacturing Company
Part 6: Long-term financial decisions
Chapter 13: Leverage and capital structure
APPLE INC. Apple leverages its brand
13.1 Leverage
Break-even analysis
Operating leverage
Focus on practice
Financial leverage
Total leverage
Relationship of operating, financial and total leverage
Focus on ethics
Review questions
13.2: The firm's capital structure
Types of capital
External assessment of the capital structure
International capital structure comparisons
Capital structure theory
Optimal capital structure
Review Questions
13.3: EBIT-EPS approach to capital structure
Presenting a financing plan graphically
Comparing alternative capital structures
Considering risk in EBIT-EPS analysis
Basic shortcoming of EBIT-EPS analysis
Review question
13.4: Choosing the optimal capital structure
Linkage
Estimating value
Maximising value versus maximising EPS
Some other important considerations
Review questions
Summary
Opener-in-review
Self-test problems
Warm-up exercises
Problems
Advanced problem
Chapter 13 Case study: Evaluating Claudia Pharmaceutical's capital structure
Spreadsheet exercise
Chapter 14: Payout policy
Vodacom Group Limited: a great dividend stock?
14.1: The basics of payout policy
Elements of payout policy
Trends in earnings and dividends
Trends in dividends and share repurchases
Focus on ethics
Review questions
14.2: The mechanics of payout policy
Cash dividend payment procedures
Share repurchase procedures
Tax treatment of dividends and repurchases
Focus on practice
Review questions
Dividend reinvestment plans
Share price reactions to corporate payouts
14.3: Relevance of payout policy
Residual theory of dividends
The dividend irrelevance theory
Arguments for dividend relevance
Review questions
14.4: Factors affecting dividend policy
Legal constraints
Contractual constraints
Growth prospects
Owner considerations
Market considerations
Review question
14.5: Types of dividend policies
Constant-payout-ratio dividend policy
Regular dividend policy
Low-regular-and-extra dividend policy
Review question
14.6 Other forms of dividends
Share dividends
Share splits
Review questions
Summary
Opener-in-review
Self-test problem
Warm-up exercises
Problems
Advanced problem
Chapter 14 Case study: Medical Personal Protective Equipment dividend payment policy
Spreadsheet exercise
Integrative Case study 6: Co-operative Wine Merchants
Part 7: Short-term financial decisions
Chapter 15: Working capital and current assets management
HSBC announces cutting 35,000 jobs as profits fall by a third
15.1: Net working capital fundamentals
Working capital management
Net working capital
Trade-off between profitability and risk
Review questions
15.2: Cash conversion cycle
Calculating the cash conversion cycle
Funding requirements of the cash conversion cycle
Strategies for managing the cash conversion cycle
Review questions
15.3: Inventory management
Differing viewpoints about inventory level
Common techniques for managing inventory
Focus on practice
International inventory management
Review questions
15.4: Trade receivables management
Credit selection and standards
Focus on practice
Credit terms
Credit period
Credit monitoring
Review questions
15.5: Management of receipts and disbursements
Float
Speeding up collections
Slowing down payments
Focus on practice
Cash concentration
Zero-balance accounts
Investing in short-term investments
Review questions
Summary
Opener-in-review
Self-test problems
Warm-up exercises
Problems
Advanced problems
Chapter 15 Case study: Assessing Azania Publishing Company's cash management efficiency
Spreadsheet exercise
Chapter 16: Current liabilities management
South African FinTech start-ups innovating in the payments
16.1: Spontaneous liabilities
Trade and other payables management
Accruals
Review questions
16.2: Unsecured sources of short-term loans
Bank loans
Commercial paper
Focus on practice
International loans
Review questions
16.3: Secured sources of short-term loans
Characteristics of secured short-term loans
Use of trade receivables as collateral
Use of inventory as collateral
Review questions
Summary
Opener-in-review
Self-test problem
Warm-up exercises
Problems
Advanced problems
Chapter 16 Case study: Choosing between an aggressive and conservative shortterm funding strategy for Kamperville Komponents CC
Spreadsheet exercise
Integrative Case study 7: Superior Outdoor Plastics
Part 8: Special topics in managerial finance
Chapter 17: Hybrid and derivative securities
Sasol shares jump after locking in fuel prices
17.1: Overview of hybrids and derivatives
Review question
17.2: Leasing
Types of leases
Leasing arrangements
Focus on practice
Lease-versus-purchase decision
Effects of leasing on future financing
Advantages and disadvantages of leasing
Review questions
17.3: Convertible securities
Types of convertible securities
General features of convertibles
Financing with convertibles
Determining the value of a convertible bond
Review questions
Focus on ethics
17.4: Share purchase warrants
Key characteristics
Implied price of an attached warrant
Values of warrants
Review questions
17.5: Options
Calls and puts
Options markets
Options trading
Role of call and put in fundraising
Hedging foreign-currency exposures with options
Forward and futures contracts
17.6: Swaps
Review questions
Summary
Opener-in-review
Self-test problems
Warm-up exercises
Problems
Advanced problems
Chapter 17 Case study: Wirley Wind Turbine Turners
Spreadsheet exercise
Chapter 18: Mergers, LBOs, divestitures and business failure
Sibanye-Stillwater acquires Lonmin
18.1: Merger fundamentals
Terminology
Motives for merging
Types of mergers
Review questions
18.2: LBOs and divestitures
Leveraged buyouts (LBOs)
Divestitures
Review questions
18.3: Analysing and negotiating mergers
Valuing the target company
Share swap transactions
Merger negotiation process
Global focus
Holding companies
International mergers
Review questions
Global focus
18.4: Business failure fundamentals
Types of business failure
Major causes of business failure
Review questions
18.5: Reorganisation and liquidation in bankruptcy
Bankruptcy legislation
Focus on practice
Priority of claims
Review questions
Summary
Opener-in-review
Self-test problems
Warm-up exercises
Problems
Advanced problems
Chapter 18 Case study: The dilemma of Unathi Company: To acquire or to liquidate - what shall we do?
Spreadsheet exercise
Chapter 19: International managerial finance
Mr Price expects a rise in bad customer debt due to COVID-19
19.1: The multinational company and its environment
Key trading blocs
GATT and the WTO
Legal requirements for MNCs
Taxes
Financial markets
Review questions
19.2: Financial statements
Subsidiary characterisation and functional currency
Translation of individual accounts
Review question
19.3: Risk
Exchange rate risks
Political risks
Review questions
19.4: Long-term investment and financing decisions
Foreign direct investment
Investment cash flows and decisions
Capital structure
Global focus
Long-term debt
Equity capital
Review questions
19.5: Short-term financial decisions
Cash management
Credit and inventory management
Review questions
19.6: Mergers and joint ventures
Review question
Summary
Opener-in-review
Self-test problem
Warm-up exercises
Problems
Advanced problems
Chapter 19 Case study: Assessing a direct investment in Kenya by Capita Computer Company
Spreadsheet exercise
Integrative Case study 8: Organic Solutions
Appendices
A: Financial tables
B: Solutions to self-test problems
C: Answers to selected end-of-chapter problems
Glossary
Index
Back Cover

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