Book Title: Introduction to Financial Management: A Contemporary Approach

Book Description

“Introduction to Financial Management: A Contemporary Approach” is a comprehensive open-source textbook designed to provide students and professionals with a solid foundation in financial management. This textbook is structured into four key parts, each addressing essential aspects of financial management and modern practices.

What sets this textbook apart from traditional finance texts are two key innovations. First, it embraces a broader perspective beyond the traditional shareholder primacy view, acknowledging the significance of non-financial factors in decision-making. Second, it is designed to be accessible, engaging, and practical, featuring interactive activities and video content.

These features make “Introduction to Financial Management: A Contemporary Approach” an invaluable resource for anyone looking to understand the intricacies of financial management in today’s dynamic economic environment.

Part 1: Foundations

• Chapter 1: What is Financial Management – Introduces the fundamental concepts and objectives of financial management in today’s world, laying the groundwork for the entire textbook.
• Chapter 2: Five Principles of Finance – Explores the core principles guiding financial decision-making, including the time value of money, risk-return trade-off, and market efficiency.

Part 2: Valuation and Capital Budgeting

• Chapter 3: Time Value of Money (Part 1) – Covers the essential concept of the time value of money, focusing on calculations related to single cash flows.
• Chapter 4: Time Value of Money (Part 2) – Covers the essential concept of the time value of money, focusing on calculations related to multiple cash flows.
• Chapter 5: Valuing Debt – Examines methods for assessing the value of bonds and other debt instruments.
• Chapter 6: Valuing Shares – Provides insights into equity valuation, including dividend discount models and price/earnings ratios.
• Chapter 7: Capital Budgeting Methods – Reviews various capital budgeting techniques such as Net Present Value, payback period, and internal rate of return (IRR)
• Chapter 8: NPV – Relevant Cash Flows – Focuses on identifying and estimating the relevant cash flows for Net Present Value (NPV) calculations.
• Chapter 9: NPV – Modelling and Analysis – Covers advanced NPV modelling techniques to evaluate investment projects more accurately.

Part 3: Risk and Return

• Chapter 10: Risk and Return – Explains the relationship between risk and return, including portfolio theory and the Capital Asset Pricing Model (CAPM).
• Chapter 11: Cost of Capital – Explores methods to determine a company’s cost of capital, incorporating both debt and equity financing.

Part 4: Sustainable Finance

• Chapter 12: Corporate Sustainability & Sustainable Finance – Investigates the growing field of sustainable finance, corporate social responsibility (CSR), and how businesses can integrate sustainability into their financial strategies.

By blending theoretical foundations with practical applications, this textbook offers a well-rounded approach to financial management, making it an essential tool for learning and teaching in today’s ever-evolving financial landscape.