Summary
Foreword by Richard Roll xvi
Preface xviii
List of frequently used symbols xxii
1 What is corporate finance? 1
Section I
Financial analysis 15
Part One
Fundamental concepts in
FiNANCiAL ANALYsis 17
2 Cash flows 19
3 EARNiNgs 29
4 Capital employed and invested
capital 44
5 WALkiNg THROUgH from EARNiNgs TO
cash flow 57
6 GETTiNg to gRips with consolidated
accounts 73
7 How to cope with the most complex
points in financial accounts 94
9 MARgiN analysis: Structure 155
10 MARgiN analysis: Risks 178
11 WORkiNg capital and capital
expenditures 193
12 FiNANCiNg 217
13 Return on capital employed and
RETURN ON EqUiTY 232
14 Conclusion of financial analysis 252
Section II
Investment analysis 259
Part One
Investment decision rules 261
15 The financial MARkETs 263
16 The time value of money and Net
Present Value (NPV) 290
17 The Internal Rate of Return (IRR) 309
18 Incremental cash flows and other
investment criteria 327
19 MEAsURiNg VALUE CREATiON 345
20 Risk and investment analysis 367
Part Two
Financial analysis and FORECAsTiNg 121
8 How to perform a financial
analysis 123
Part Two
The Risk of securities and the cost OF capital 385
21 Risk and return 387
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