Claude Viallet and Gabriel Hawawini

New Features

* Text is organized around the principle that the firm should be managed to create value for its owners.
* Expanded Chapter 9 includes more coverage of raising capital and the valuation of financial securities.
* Two sets of problems at the end of every chapter include ten new review problems as well as self-test problems that provide additional practice and application to ensure thorough understanding.
* The text has been updated with the most recent data and references relevant to the topics addressed.

Key Features

* Real World Analysis
An in-depth analysis of the financial condition of the Polo Ralph Lauren Corporation has been added to illustrate concepts in practice.
* Distinguished Author Team
The authors have extensive expertise teaching this course to executives. The material in this text has been used by over 2000 managers around the world.
* Appropriate Coverage
This text emphasizes rigorous analysis but avoids complicated formulas that have no direct application to decision-making. The text fills the gap between introductory accounting and finance manuals for non-financial managers and advanced texts in corporate finance.
* Intuitive Presentation of Math
The text presents quantitative material in an accessible manner. Whenever a formula is used, the intuition behind it is explained and detailed applications are provided. Mathematical derivations of formulas are confined to chapter appendices.
* Value Creation Theme
The text is organized around the underlying principle that firms should be managed to create value for their owners. Chapter 1 introduces the concept of value creation, overviews the text, and explains how each topic relates to the value creation theme.
* Self-Contained Chapters
Each chapter is self-contained, providing optimal flexibility for instructors and making the text an ideal reference resource.
* Problem-Scenerio Topic Presentation
Each topic is presented using a "problem-scenario" approach – topics are presented in the context of a financial management problem that might be faced by an executive on a day-to-day basis. This makes topics more meaningful to the reader.
* Consistent Case Studies
Examples from the same set of companies run throughout the text to provide a common thread that reinforces understanding.

About the Authors

* Gabriel Hawawini (Ph.D., New York University) is the Henry Grunfeld Chaired Professor of Investment Banking at INSEAD – the European Institute of Business Administration. He has also taught finance at New York University, Columbia University, and the Wharton School of the University of Pennsylvania, where he won the Helen Kardon Moss Anvil Award for Excellence in Teaching.
Professor Hawawini is the author of ten books and over 60 research papers. In addition to serving as Vice President of the French Finance Association, he has organized, directed, and taught in management development programs at INSEAD and around the world.
* Claude Viallet (Ph.D., Northwestern University) is Professor of Finance at INSEAD and Visiting Professor of Finance at Northwestern University. Before joining INSEAD, he worked as a project manager at a major oil company and as chief financial officer of a service company in Paris.
Professor Viallet has been President of the European Finance Association and has published widely in leading academic and professor journals. He has organized, directed and taught in management development programs in Europe, the United States, Asia, and Latin America.

Table of Contents

PART I. INTRODUCTION
1. Financial Management and Value Creation: An Overview
2. Understanding Balance Sheets and Income Statements

PART II. FINANCIAL DIAGNOSIS AND MANAGEMENT
3. Assessing Liquidity and Operational Efficiency
4. Measuring Cash Flows
5. Diagnosing Profitability, Risk, and Growth

PART III. INVESTMENT DECISIONS
6. Using the Net Present Value Rule to Make Value-Creating Investment Decisions
7. Alternatives to the Net Present Value Rule
8. Identifying and Estimating a Project's Cash Flows

PART IV. FINANCING DECISIONS
9. Raising Capital and Valuing Securities
10. Estimating the Cost of Capital
11. Designing a Capital Structure

PART V. BUSINESS DECISIONS
12. Valuing and Acquiring a Business
13. Making Value-Creating Decisions in an International Environment
14. Managing for Value Creation