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Mastering Financial Management is a comprehensive guide for all those who need to know about financial management. Written both for professionals as well as those seeking qualifications in finance and banking, this step-by-step guide will teach you strategies, applications and skills and show you how to plan, make decisions, control financial resources and deliver real shareholder value. Mastering Financial Management: - Covers the essential basic concepts through to advanced management practice- Complements major accounting and banking examinations and illustrates how the book fits with each professional syllabus- Uses worked financial examples, mathematical formulas and case studies to explain the role of financial management- Accommodates the post-recession financial climate- Gives you free access to a comprehensive online dictionary of banking and finance at www.tbc.comFinancial management is concerned with the strategic management of an organisation's finances to ensure that financial objectives are achieved. Because money is the common denominator for the measurement and control of most aspects of a business, financial management is at the heart of all decision making, and skills in financial management will be necessary for all those in an executive position. One basic assumption of profit making organisations is the maximisation of shareholders' wealth, and sound financial management plays a major role in this. It is a very wide subject requiring knowledge of aspects of accounting, taxation, management, finance, capital management, investment appraisal, risk management, pricing, dividend policy, financial mathematics and strategic financial management. This book is targeted at those professionals who have taken over a strategic planning position but who have no knowledge of all aspects of financial management. It is also designed to help those studying for professional qualifications in finance and banking subjects. It provides a step-by-step guide from the basics elements of financial management through to advanced strategic financial management.

Clive Marsh runs HeathMarsh, a research and development, and training organisation. He’s a chartered banker and a Fellow of the Charted Institute of Management. He has a MA in Strategic Financial Management and has worked for a range of organisations including Shell, IBM, Gap Gemini and Nat West.

Foreword

Publisher’s acknowledgements

1 Overview of financial management and its relationship with corporate strategy and the markets

A definition of financial management

Financial management and corporate strategy

The role of the financial markets

Summary

2 Financial accounting and ratio analysis

Introduction

The origins of accounting and the double-entry system

The basic principles of double entry

Trial balance

Profit and loss account

Balance sheet

Classification of assets

Classification of liabilities

Fundamental accounting concepts and principles

Ratio analysis

Summary

3 Company taxation interface with financial management

Overview

Outline of corporation tax

Value added tax – VAT

PAYE and NI

Global tax planning

Overseas activities

Double–taxation relief

Foreign companies trading in the UK

Transfer pricing

Tax and decision making

Tax strategy interface with business strategy and finance

Committing to a tax strategy

4 Inflation and the changing value of money over time

Overview

Inflation, deflation, disinflation, stagflation, hyperinflation

Official sources of inflation statistics

Time value of money and discounted cash flow

Summary

5 Budgeting

Budgetary control and the budget process

Budgets and variance analysis

Budget methods and types of budgeting and relationship with planning;

Types of budgets

Choices, priorities and capital rationing

Summary

6 Marginal costing and pricing

Overview

Fixed costs

Variable costs

Semi–variable costs or semi–fixed costs

Total cost

Contribution

Break–even point

The use of marginal costing in pricing decisions

The advantages and disadvantages of marginal costing

7 Absorption costing, standard costing and activity–based costing

Absorption costing

The fully integrated standard costing system

The principal advantages of standard costing systems

Setting standards

Activity–based costing (ABC)

The use of marginal costing in conjunction with standard costing

8 Pricing and costs

Setting selling prices

Social and legal issues in pricing

Sales mix

Using linear programming techniques to solve problems of sales mix when there are resource constraints

Using cost information in pricing

Marketing strategies

Summary

9 Encouraging performance through goal alignment and congruence

Goal alignment

Reward schemes

Broader incentives

Summary

10 Working capital management

The need for working capital, the working capital ratio and cycle

Overtrading

Stock turnover and optimal stock levels

Debtors

Cash control and management

What to do with short–term surplus cash

Working capital funding strategies

Summary

11 Business finance, long–term versus short–term finance, gearing and capital structure

The uses of long–term and short–term finance

Short–term finance

Term and long–term finance and funds

Gearing and capital structure

Export finance

Bank relationship strategy

12 The cost of capital

Definition of the cost of capital and discussion

Cost of debt

Weighted average cost of capital (WACC)

Dividend growth model

Capital asset pricing model (CAPM)

Summary

13 Capital structure

Background

The MM view

Traditional view of the cost of capital

Pecking Order theory

Capital structure, cost of capital and investments

Pragmatic summary

A theoretical view – the perfect market versus the real world

14 Business valuations

Background

Business valuers and the information they require

Asset–based valuations

Income/earnings–based valuations

Cash flow valuations

Debt valuation

Summary

15 Foreign currency and exchange risk management

The nature of foreign currency risk

Reasons for exchange rate movements

Currency risk management

Currency derivatives

16 Interest rate risk

Introduction

The causes of interest rate fluctuations

Types of interest rate

Interest rate risk management

FRAs (forward rate agreements)

Interest rate derivatives

17 Investment decisions

Investment and the capital budgeting process

Relevant cash flow

Payback period method of evaluation

Return on capital employed (ROCE)

Accounting rate of return (ARR)

Discounted cash flow, net present value and internal rate of return

Capital rationing

The effect of taxation on investment appraisal and DCF

18 Mergers and acquisitions (M&A)

Background and definitions

Considerations on acquisition

Defensive tactics

Competition Commission

Acquisition consideration

The market value of shares during a takeover

The effect of takeovers on PE ratios, EPS and creating paper value

Effect of mergers and takeovers on dividend cover

Reverse takeovers

Demergers

The City Code on Takeovers and Mergers

Documents in a takeover bid

Summary of order of events in a takeover

Cross–border M&A

How will the 2009 recession effect the M&A market?

19 Outsourcing and shared services

Background

What is outsourcing?

The outsourcing decision

Outsourcing groups, associations and information sources

Shared services

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Mastering Financial Management A step-by-step guide to strategies, applications and skills

Mastering Financial Management A step-by-step guide to strategies, applications and skills

0273724541

Summary

Author Biography

Table of Contents

Supplemental Materials

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