Corporate Finance Core Principles And Their Applications - equitybizz.com

Corporate Finance Core Principles And Their Applications


corporate finance: core principles and applications

What Is Core Principles And Applications Of Corporate Finance?

A book sitting on top of a table

Core Principles and Applications of Corporate Finance, third edition, by Ross, Westerfield, and Jaffe, was created to express the key corporate finance principles and applications in a highly approachable manner to the widest possible audience, regardless of their background in business. This text continues to be highly influential and beneficial to business people in today’s complex corporate environment. The authors of this text clearly describe corporate finance’s role comprehensively, focusing on key issues that face businesses everywhere. Core Principles and Applications of Corporate Finance provide clear and concise explanations of key topics such as working capital management, profit margins, lender relationships, and commercial loans.

What’s So Special In The Third Edition Of This Book?

This third edition of the “must-have” text for all those involved in corporate finance and students interested in a career in finance is a refined, updated version of the previous books. It covers new areas, including corporate law and policy, transactional funding, mergers and acquisitions, and government finance. New topics include options for financing, working capital options, and investment banking. The authors have retained the same great attention to detail and clarity that have characterized the text throughout its three editions.

Which Things Are Covered In This Book?

The book covers virtually every aspect of the subject, focusing on core principles and applications. The book begins with an introduction outlining the scope and discussing some of the core principles. Several case studies illustrate essential issues that have concerned business people over the years. An introductory study of commercial real estate financing is beneficial, covering the basics of how lenders analyze mortgage documents and loan offers.

Which Are The Important Topics Of This Book?

The book then presents a short primer on financial concepts. This includes a discussion of business bank financing, examining the nature of banks as economic entities, and looking at ways to be managed more productively. An introduction to liquidity identifies the three main categories of financial liabilities – short-term obligations, long-term liabilities, and long-term assets. The book then explains the meaning of cash flow and various models used to represent its definition. Cash flow is the income from operating activities that is not reabsorbed into the company’s operating funds. A further discussion of business bank financing examines the role of bank borrowing, focusing on its role as a source of working capital for corporations.

Final Words

The authors rightly point out that corporate finance is an ever-changing area of research, and in developing a company’s strategies, it is vital to use sound financial principles. It is also essential to make changes when it is necessary. However, many of the core principles covered in this text are easily applicable to a wide range of companies and situations. They are not abstract or academic principles but are practical guides designed to enhance the managerial skills of senior managers and investors. These principles provide a solid background for understanding a company’s financial position and thus play a significant role in its successful operation.

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