Financial Management: Theory & Practice

This book provides a comprehensive understanding of the key concepts, principles, and practices of corporate finance. Blending theory with real-world applications, it enables students to make informed financial decisions in dynamic business environments.

This edition has been revised and updated to reflect current developments in the field. It includes new sections on The Value of a Company, Free Cash Flow, Capital Rationing, Empirical Evidence on Capital Structure, Corporate Governance, Organizational Architecture, Corporate Culture, Sustainability and ESG in Financial Management, and Finance for Startups. These additions make the book contemporary and industry-aligned.

Widely accepted across top Indian management institutes, this book is trusted by students and instructors. It is an essential text for MBA/PGDM courses and a valuable reference for finance professionals, analysts, and entrepreneurs seeking a strong foundation in financial decision-making and corporate value creation.

Salient Features ⭐

• ✔️ Comprehensive Coverage
• 📘 Builds understanding of central ideas and theories of modern finance
• 📊 Decisional Focus and Analytical Approach
• 💻 Excel Applications
• 🧠 Emphasis on Behavioural Dimension
• 📖 Beyond the Pages: Collection of short articles on various topics

Web Supplements 🌐

Instructor Resources

• 📊 Power Point Presentations
• 📂 Chapter Excel Files
• 📖 “Beyond the Pages” Content
• 📝 Solutions Manual
• 💻 Excel Files for Solutions Manual
• ❓ Quizzes
• 📚 Test Bank

Student Resources

• 📝 Additional Self-Test Problems
• ✅ Additional Solved Problems
• 📖 “Beyond the Pages” Content
• 💻 Chapter Excel Files
• 🔑 Key to Additional Self-Test Problems

Table of Contents 📑

Part-I Introduction

1. Financial Management: An Overview
2. The Financial System

Part-II Financial Analysis and Planning

1. Financial Statements, Taxes, and Cash Flow
2. Analysis of Financial Statements
3. Financial Planning and Forecasting

Part-III Fundamental Valuation Concepts

1. The Time Value of Money
2. Valuation of Bonds and Stocks
3. Risk and Return
4. Risk and Return: Portfolio Theory and Asset Pricing Models
5. Options and Their Valuation

Part-IV Capital Budgeting

1. Techniques of Capital Budgeting
2. Estimation of Project Cash Flows
3. Risk Analysis in Capital Budgeting
4. The Cost of Capital
5. Capital Budgeting: Extensions

Part-V Long Term Financing

1. Market Efficiency and Behavioural Paradigm
2. Sources of Long-Term Finance
3. Raising Long Term Finance

Part-VI Capital Structure and Dividend Decisions

1. Capital Structure and Firm Value
2. Capital Structure Decision
3. Dividend Policy and Firm Value
4. Dividend Decision

Part-VII Working Capital Management

1. Working Capital Policy
2. Cash and Liquidity Management
3. Credit Management
4. Inventory Management
5. Working Capital Financing
6. Working Capital Management: Extensions

Part-VIII Debt and Hybrid Financing

1. Debt Analysis and Management
2. Leasing, Hire-Purchase, Infrastructure Finance and Project Finance
3. Hybrid Financing

Part-IX Corporate Valuation, Restructuring and Value Creation

1. Corporate Valuation
2. Value Based Management
3. Mergers, Acquisitions, and Restructuring

Part-X Corporate Governance and Performance Management

1. Corporate Governance and Executive Compensation
2. Performance Management and Organisational Architecture

Part-XI International Finance and Risk Management

1. International Financial Management
2. Derivatives and Risk Management

Part-XII Special Topics

1. Financial Management in Companies with Special Characteristics
2. Financial Management in Sick Units
3. Behavioural Corporate Finance
4. The State of Our Knowledge

Appendix-A. Tables

Appendix-B. Solutions to End-of-Chapter Problems and Mini Cases

Appendix-C. Sources of Financial Information

Glossary

Index