The Basics of Financial Management

• Comprehensive method, including a workbook and an answer book;
• well suited for self-study due to the structural framework of the book and the additional online study materials;
• written from an international perspective.

For over 27 years now, The Basics of Financial Management has been an authoritative book on the fundamentals of financial management. The first few chapters form an introduction to the key economic concepts. The remaining chapters delve deeper into the fields of financing, management accounting and financial accounting. Together with the additional workbook and answer book The Basics of Financial Management constitutes a comprehensive method. Students can work with the books independently.

There is also a Dutch edition of this book.

In this renewed sixth edition of The Basics of Financial Management the subject matter is placed in an international perspective. To increase user friendliness, the authors have streamlined the language in this sixth edition and have divided the material into smaller units in parts 1 and 2. Naturally, the material has been updated and new topics have been added. For example, in the new edition:

• a distinction is made in capital budgeting between autonomous and induced investments, and the average cost of capital is explained in more detail. To emphasize that free cash flow is central to capital budgeting, the method of average accounting rate of return, which is based on profit, has been dropped;
• leasing is covered in more detail in the chapter about debts. The discussion of working capital management now includes a separate section on the significance of logistical principles for inventory management and factoring for credit management.
• the hidden and secret reserves have been dropped in the equity chapter. Instead, the value gap between intrinsic value and market capitalization is addressed. With regard to debts, relevant topics are now discussed in order of decreasing importance for the financing of companies.

This book is used in many different programs within higher education, like Finance & Control, Commercial Economics, Business Administration, Business Studies, Accountancy and Facility Management.

On the additional website, students can find many extra study materials, like the answers to assignments, explanatory videos, practice exams per chapter, summaries per chapter, feedback and study advice. For lecturers the website includes assignment answers and PowerPoints.

All three authors have years of experience as lecturers in higher economic education and as authors/researchers in their workfield.