Cover image for Guide to financial analysis
Title:
Guide to financial analysis
Author:
Bowlin, Oswald Doniece, 1928-
Publication Information:
New York : McGraw-Hill, [1980]

©1980
Physical Description:
xii, 335 pages ; 24 cm.
General Note:
Includes index.
Language:
English
ISBN:
9780070067813
Format :
Book

On Order

Table of Contents

Prefacep. xi
Chapter 1 Financial Managementp. 1
Financial Decisionsp. 1
The Financial Managerp. 2
The Objective of Financial Managementp. 3
Valuation in an Efficient Marketp. 5
Spreadsheets in Financial Analysisp. 8
Outline of the Bookp. 10
Referencesp. 11
Chapter 2 Financial Analysisp. 13
A Brief Review of the Firm's Financial Statementsp. 13
Financial Statement Analysisp. 24
Financial Performance and the Creation of Shareholder Wealthp. 35
Limitations of Ratio Analysisp. 39
Using Ratios to Predict Corporate Bankruptcyp. 40
Statistical Studies of Financial Ratiosp. 41
Chapter Summaryp. 42
Problemsp. 43
Referencesp. 46
Chapter 3 Financial Forecasting, Planning, and Controlp. 47
Forecasting Salesp. 48
Cash Budgetp. 55
Pro Forma Financial Statementsp. 61
Financial Spreadsheetsp. 67
Chapter Summaryp. 69
Problemsp. 70
Referencesp. 72
Appendix 3A Analyzing Forecast Accuracyp. 73
Chapter 4 Valuationp. 80
The Concept of Valuationp. 80
Estimating Market Valuep. 83
Computation of the Time-Adjusted Rate of Returnp. 88
Solved Problemsp. 91
The Valuation of Corporate Securities and Business Firmsp. 93
Valuation of the Total Equity of a Firmp. 106
Chapter Summaryp. 106
Solved Problemsp. 107
Problemsp. 110
Referencesp. 112
Appendix 4A Summing a Geometric Progressionp. 113
Chapter 5 Capital Budgeting Techniquesp. 115
The Investment Cash Flowsp. 116
Evaluation of Investment Proposalsp. 123
Capital Rationingp. 143
Chapter Summaryp. 144
Solved Problemsp. 145
Problemsp. 148
Referencesp. 153
Appendix 5A Federal Taxation of Business Incomep. 154
Chapter 6 The Effect and Measurement of Risk of New Investmentsp. 161
Investment Risk of an Individual Asset: Project Riskp. 162
Measurement of Project Riskp. 168
Investment Risk to the Firm: Firm Riskp. 174
Risk of a Project to the Firm's Stockholders: Systematic Riskp. 180
Portfolio Theoryp. 181
Capital Asset Pricingp. 185
Chapter Summaryp. 189
Solved Problemsp. 191
Problemsp. 193
Referencesp. 197
Appendix 6A Interest Rate Riskp. 198
Appendix 6B Evaluating Option Components of Capital Expendituresp. 202
Chapter 7 Estimating the Required Rate of Return on Investment Proposalsp. 208
Cost of Individual Sources of Capitalp. 209
Deriving a Weighted-Average Cost of Capitalp. 229
Setting Required Rates for Risk Categoriesp. 236
Cost of Capital for Company Divisionsp. 236
Acquisitions of Other Firmsp. 237
Chapter Summaryp. 240
Problemsp. 240
Referencesp. 243
Chapter 8 Managing Cash and Marketable Securitiesp. 245
Rationale for Holding Cashp. 245
Objectives and Decisionsp. 248
Collection and Disbursement Proceduresp. 249
Cost/Benefit Analysis of Cash Management Servicesp. 257
Marketable Securities Portfolio Structurep. 257
Chapter Summaryp. 266
Problemsp. 267
Referencesp. 269
Chapter 9 Credit and Inventory Managementp. 272
Credit Managementp. 272
Credit Analysisp. 274
Collectionsp. 277
Inventoriesp. 278
The Inventory Investmentp. 278
Chapter Summaryp. 286
Solved Problemsp. 287
Problemsp. 289
Referencesp. 293
Chapter 10 Credit Policy Decisionsp. 294
The Investment Required in Offering Creditp. 295
Net Cash Benefitsp. 299
The Evaluation of Credit Policy Proposals: Specificsp. 300
Variations in Cash Flows Over Timep. 313
Chapter Summaryp. 315
Solved Problemp. 315
Problemsp. 318
Referencesp. 322
Chapter 11 Determining the Financing Mixp. 325
Business Risk and Financial Riskp. 325
The Concept of Operating Leveragep. 327
Financial Leveragep. 332
Total Leveragep. 334
The Debt Maturity Financing Decisionp. 336
Choosing the Appropriate Financing Mixp. 340
The Cost of Financing in Practicep. 345
Chapter Summaryp. 347
Problemsp. 348
Referencesp. 350
Appendix 11A Debt Refundingp. 351
Chapter 12 Dividend Policyp. 359
The Irrelevance of Dividend Policyp. 360
Factors Influencing Dividend Policyp. 361
Dividend Payment Strategiesp. 367
Dividend Payment Procedurep. 369
Alternatives to Cash Dividendsp. 370
Chapter Summaryp. 376
Problemsp. 377
Referencesp. 378
Appendix A Present-Value and Future-Value Tablesp. 381
A-1 Present Value of $1p. 382
A-2 Present Value of an Annuity of $1p. 386
A-3 Future Value of $1p. 390
A-4 Future Value of an Annuity of $1p. 393
Appendix B Cumulative Normal Distributionp. 396
Appendix C Answers to Selected Study Problemsp. 398
Appendix D Glossaryp. 403
Indexp. 413