Business finance

Based on the internationally successful Corporate Finance, a model-building approach by the same author, this new text takes a highly applied and practical approach to the use of finance in creating effective business solutions.It integrates theory and cases drawn from real business situations within a spreadsheet-modelling, learning framework and is structured around solving critical business issues.It allows readers to conduct their own systematic analysis, to build innovative strategies and action plans, to understand and manage risk and to create more profit, cash and value for their organisation.Originally developed for and tested with practising business people attending executive programmes in America, Asia and Europe, it is an ideal text for MBA or advanced undergraduate business or finance students taking an intermediate or advanced course in finance. It is also an ideal text for professional executives.Key features

• Twenty-four case studies focusing on critical business issues: How best to launch a new product? How to value a commitment to R6tD? How to restructure an information business and avoid the cash problems caused by explosive growth? How to structure the payments for an acquisition? How to redesign a project, remove its risk and increase its value? How fast and deep should one go for restructuring? How fast and how large should a commitment to growth be? How to assess the value of alternative business processes ('collect-then-pay1 vs. 'pay-then-collect')? Should one hedge?
• Systematic exploration of the opportunities and challenges of using spreadsheet modelling with widely tested, easy to build and effective 'trajectories-of-payments-and-receipts' models.
• A comprehensive set of financial and risk analysis tools to provide a 'business and finance' approach rather than 'pure finance' logic approach.
• A truly international perspective.

ContentsPart I: Shareholder value

• Personal financial spreadsheet models for creating maximum shareholder value

Part II: Value and risk

• Is it worth doing this business?
• Preparing for the negotiation: how to create the maximum value out of a business opportunity
• Measuring the progress made in the process of creating value
• The need to acknowledge risk

Part III: Modelling business processes and simulating their dynamics

• Cash-income parity: analyzing deviations from parity
• Building and using a per-cent-of-sales, vertical income, free cash flow and value model
• Building and using a comprehensive income, cash flow and balance sheets model
• Price, product mix and volume changes
• Building and using trajectories-of-payments-and-receipts models
• Growth, cash and value
• Sequencing payments as a source of value
• What should Delta Metal do?

Part IV: Managing the trajectories of commitment in decline and growth situations

• From 'strategic what-if' to 'real options' thinking

Part V: Decisions to commit to new products and new markets

• The challenge of evaluating new products and new markets
• Launching P12: which model would help us best?
• Designing a model of a new product decision
• Building an improved model
• Making the model work for us
• Deciding about the new product
• The value of flexibility

Part VI: Deciding to commit to external growth opportunities

• A framework for evaluating companies
• A step-by-step analysis of the dynamics of an opportunity for co-operation
• Designing a co-operative strategy and preparing for its implementation
• Creating value out of shared interests and differences: the rationale for a joint venture