Tài liệu Financial management for decision makers by dr peter atrilldr soc Tài liệu Quản trị tài chính cho người ra quyết định Financial management for decision makers by dr peter atrilldr soc Tài liệu Financial management for decision makers by dr peter atrilldr soc Tài liệu Quản trị tài chính cho người ra quyết định Financial management for decision makers by dr peter atrilldr soc Tài liệu Financial management for decision makers by dr peter atrilldr soc Tài liệu Quản trị tài chính cho người ra quyết định Financial management for decision makers by dr peter atrilldr soc Tài liệu Financial management for decision makers by dr peter atrilldr soc Tài liệu Quản trị tài chính cho người ra quyết định Financial management for decision makers by dr peter atrilldr soc
www.pearson-books.com CVR_ATRI6061_07_SE_CVR.indd Front cover image: © Getty Images Peter Atrill is a freelance academic and author working with leading institutions in the UK, Europe and SE Asia He has previously held posts as Head of Business and Management and Head of Accounting and Law at Plymouth Business School, Plymouth University FOR DECISION MAKERS The text is ideal for undergraduates from a nonfinance/accounting discipline taking an introductory module in financial management, and postgraduate students on courses such as the Diploma in Management Studies and MBA programmes The text is also suitable for finance and accounting students as a foundation for further study Peter Atrill MANAGEMENT New to this edition: • increased coverage of managing for shareholder value • additional activities throughout to help reinforce key points • increased coverage of the functioning of stock markets • more diagrams to help assist understanding • updated ‘real world’ examples • Visit www.pearsoned.co.uk/atrill to utilise a rich variety of online resources for lecturers and students SEVENTH EDITION FINANCIAL MANAGEMENT Adopting an innovative, open-learning approach to introduce the main principles of financial management in an accessible, non-technical way, this fully updated seventh edition provides a unique focus on the practical application of financial management and its role in decision making FINANCIAL MANAGEMENT FINANCIAL Peter Atrill SEVENTH EDITION FOR DECISION MAKERS Atrill FOR DECISION MAKERS SEVENTH EDITION 13/05/2014 14:04 FOR DECISION MAKERS FINANCIAL MANAGEMENT A01_ATRI6061_07_SE_FM.indd i 7/5/14 11:49 AM A01_ATRI6061_07_SE_FM.indd ii 7/5/14 11:49 AM FOR DECISION MAKERS FINANCIAL MANAGEMENT SEVENTH EDITION Peter Atrill A01_ATRI6061_07_SE_FM.indd iii 7/5/14 11:49 AM Pearson Education Limited Edinburgh Gate Harlow CM20 2JE United Kingdom Tel: +44 (0)1279 623623 Web: www.pearson.com/uk First published 1997 (print) Second edition published 2000 (print) Third edition published 2003 (print) Fourth edition published 2006 (print) Fifth edition published 2009 (print) Sixth edition published (print) 2012 Seventh edition published 2014 (print and electronic) © Pearson Education Limited 2014 (print and electronic) The right of Peter Atrill to be identified as author of this work has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988 The print publication is protected by copyright Prior to any prohibited reproduction, storage in a retrieval system, distribution or transmission in any form or by any means, electronic, mechanical, recording or otherwise, permission should be obtained from the publisher or, where applicable, a licence permitting restricted copying in the United Kingdom should be obtained from the Copyright Licensing Agency Ltd, Saffron House, 6–10 Kirby Street, London EC1N 8TS The ePublication is protected by copyright and must not be copied, reproduced, transferred, distributed, leased, licensed or publicly performed or used in any way except as specifically permitted in writing by the publishers, as allowed under the terms and conditions under which it was purchased, or as strictly permitted by applicable copyright law Any unauthorised distribution or use of this text may be a direct infringement of the author’s and the publishers’ rights and those responsible may be liable in law accordingly All trademarks used herein are the property of their respective owners The use of any trademark in this text does not vest in the author or publisher any trademark ownership rights in such trademarks, nor does the use of such trademarks imply any affiliation with or endorsement of this book by such owners Pearson Education is not responsible for the content of third-party internet sites The Financial Times With a worldwide network of highly respected journalists, The Financial Times provides global business news, insightful opinion and expert analysis of business, finance and politics With over 500 journalists reporting from 50 countries worldwide, our in-depth coverage of international news is objectively reported and analysed from an independent, global perspective To find out more, visit www.ft.com/pearsonoffer ISBN: 978-1-292-01606-1 (print) 978-1-292-01609-2 (PDF) 978-1-292-01607-8 (eText) British Library Cataloguing-in-Publication Data A catalogue record for the print edition is available from the British Library Library of Congress Cataloguing-in-Publication Data A catalogue record for the print edition is available from the Library of Congress 10 16 15 14 13 12 Front cover image: Getty Image Print edition typeset in 9.25/13pt Helvetica Neue LT Pro by 35 Print edition printed and bound by L.E.G.O S.p.A., Italy NOTE THAT ANY PAGE CROSS REFERENCES REFER TO THE PRINT EDITION A01_ATRI6061_07_SE_FM.indd iv 7/5/14 11:49 AM Contents Preface Acknowledgements How to use this book Guided tour of the book The world of financial management xiii xiv xvii xx Introduction Learning outcomes The finance function Structure of the book Modern financial management Why businesses exist? Balancing risk and return Behaving ethically Protecting shareholders’ interests Shareholder involvement 1 4 12 14 17 20 Summary Key terms References Further reading Review questions 27 28 28 29 29 Financial planning Introduction Learning outcomes Planning for the future The role of projected financial statements Preparing projected financial statements Preparing the projected statements: a worked example Projected cash flow statement Projected income statement Projected statement of financial position (balance sheet) Projected financial statements and decision making Per-cent-of-sales method Long-term cash flow projections Taking account of risk 31 31 31 32 33 34 35 36 40 42 43 45 49 54 CONTENTS A01_ATRI6061_07_SE_FM.indd v v 7/5/14 11:49 AM Summary Key terms Further reading Review questions Exercises Analysing and interpreting financial statements 69 Introduction Learning outcomes Financial ratios Financial ratio classifications The need for comparison Calculating the ratios A brief overview Profitability Efficiency Relationship between profitability and efficiency Liquidity Financial gearing Investment ratios Financial ratios and the problem of overtrading Trend analysis Using ratios to predict financial failure Limitations of ratio analysis 69 69 70 70 72 73 75 76 83 88 90 92 95 101 103 104 109 Summary Key terms References Further reading Review questions Exercises 115 116 116 117 117 117 Making capital investment decisions Introduction Learning outcomes The nature of investment decisions Investment appraisal methods Accounting rate of return (ARR) Payback period (PP) Net present value (NPV) Why NPV is better Internal rate of return (IRR) Some practical points Investment appraisal in practice Investment appraisal and strategic planning The investment appraisal process Investment decisions and human behaviour vi 59 61 61 61 61 125 125 125 126 127 128 133 136 144 145 150 154 156 157 162 CONTENTS A01_ATRI6061_07_SE_FM.indd vi 7/5/14 11:49 AM Summary Key terms Further reading Review questions Exercises Making capital investment decisions: further issues 163 165 165 166 166 173 Introduction Learning outcomes Investment decisions when funds are limited Comparing projects with unequal lives The ability to delay The problem of inflation The problem of risk Sensitivity analysis Scenario analysis Simulations Risk preferences of investors Risk-adjusted discount rate Expected net present value Event tree diagrams Risk and the standard deviation The standard deviation and the normal distribution The expected value–standard deviation rule Measuring probabilities The limits of probability analysis Portfolio effects and risk reduction 173 173 174 177 180 181 182 184 191 191 193 196 197 201 204 208 209 209 210 211 Summary Key terms Further reading Review questions Exercises 219 221 221 221 222 Financing a business 1: sources of finance 227 Introduction Learning outcomes Sources of finance External sources of finance External sources of long-term finance External sources of short-term finance Long-term versus short-term borrowing Internal sources of finance Internal sources of long-term finance Internal sources of short-term finance 227 227 228 228 229 249 253 255 255 257 Summary Key terms Further reading 261 263 263 CONTENTS A01_ATRI6061_07_SE_FM.indd vii vii 7/5/14 11:49 AM Review questions Exercises Financing a business 2: raising long-term finance 269 Introduction Learning outcomes The Stock Exchange Stock market efficiency Are the stock markets really efficient? Share issues Long-term finance for the smaller business Business angels Government assistance The Alternative Investment Market (AIM) Amazon.com: a case history 269 269 270 275 280 284 292 301 304 305 307 Summary Key terms References Further reading Review questions Exercises 308 309 309 310 310 310 The cost of capital and the capital structure decision 315 Introduction Learning outcomes Cost of capital Weighted average cost of capital (WACC) Specific or average cost of capital? Limitations of the WACC approach Cost of capital – some evidence Financial gearing Degree of financial gearing Gearing and capital structure decisions Constructing a PBIT–EPS indifference chart What determines the level of gearing? The capital structure debate 315 315 316 330 333 334 334 336 339 341 344 346 348 Summary Key terms References Further reading Review questions Exercises 360 361 361 361 362 362 Making distributions to shareholders Introduction Learning outcomes viii 264 264 371 371 371 CONTENTS A01_ATRI6061_07_SE_FM.indd viii 7/5/14 11:49 AM Paying dividends Dividend distributions in practice Dividend policy and shareholder wealth The importance of dividends Factors determining the level of dividends Dividend policy and management attitudes: some evidence Dividend smoothing in practice What should managers do? Alternatives to cash dividends 372 373 376 382 386 390 392 393 394 Summary Key terms References Further reading Review questions Exercises 401 403 403 403 403 404 10 Managing working capital 407 Introduction Learning outcomes What is working capital? The scale of working capital Managing inventories Inventories management models Managing trade receivables Managing cash Managing trade payables 407 407 408 409 412 418 423 433 441 Summary Key terms Further reading Review questions Exercises 445 447 447 448 448 11 Measuring and managing for shareholder value Introduction Learning outcomes The quest for shareholder value Creating shareholder value The need for new forms of measurement Net present value (NPV) analysis Managing the business with shareholder value analysis Implications of SVA Economic value added (EVA®) Eva®-based ratios EVA® in practice EVA® and SVA compared EVA® or SVA? Market value added (MVA) 455 455 455 456 456 457 459 466 467 467 472 473 476 477 479 CONTENTS A01_ATRI6061_07_SE_FM.indd ix ix 7/5/14 11:49 AM .. .FOR DECISION MAKERS FINANCIAL MANAGEMENT A01_ATRI6061_07_SE_FM.indd i 7/5/14 11:49 AM A01_ATRI6061_07_SE_FM.indd ii 7/5/14 11:49 AM FOR DECISION MAKERS FINANCIAL MANAGEMENT SEVENTH EDITION Peter. .. rationale for mergers Wealth-enhancing motives for mergers Other motives for mergers Forms of purchase consideration Mergers and financial performance Who benefits? The merger puzzle Ingredients for. .. end the chapter by seeing how the shares of a business may be valued for mergers and for other purposes MODERN FINANCIAL MANAGEMENT In the early years of its development, financial management was