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• Cover
• Half Title
• Endorsements
• Series Page
• Title Page
• Copyright Page
• Dedication
• Table of Contents
• List of Figures
• List of Tables
• About the Author
• Acknowledgements
• Foreword by Alvin Miu
• Introduction
• 1. Financial Statements
• Chapter Overview
• Income Statement
• Revenue and Costs
• EBITDA
• How the Money Made from Operations is Distributed
• Beyond (Beneath) Net Income
• Balance Sheet
• What the Balance Sheet Really Says
• Cash Flow Statement
• Summary
• 2. Financial Decisions and Investment Criteria
• Chapter Overview
• What is Corporate Finance?
• Capital Budgeting
• The Time Value of Money and Present Value
• Discount Rate and Risk
• Discount Rate and the Cost of Capital
• Investment Decision-Making Criteria
• Net Present Value
• Payback
• Internal Rate of Return
• Summary
• Appendix: How to Discount Cs that Go on Forever
• Perpetuity
• Growing Perpetuity
• 3. Free Cash Flows
• Chapter Overview
• Measuring Value
• The Peril of Profit
• Cash is King
• The Makeup of FCF
• 1 Cash Flow from Operations
• 2 Capital Expenditure
• 3 Change in Net Working Capital
• FCF
• Considerations when Estimating FCF
• Relevant Cash Flows Only
• Erosion and Synergy
• Sunk Costs
• Allocated Costs
• Summary
• Appendix: Pulling it all Together in an Example – MC Production, Inc.
• CFO
• CAPEX
• NWC
• FCF and Conclusions
• 4. Net Working Capital Management
• Chapter Overview
• How NWC is Calculated
• Current Assets
• Current Liabilities
• Implications of NWC
• Managing NWC
• Managing NWC in Days
• Implications of Managing Working Capital on Free Cash Flows (FCF)
• Increasing the Amount of Financing
• Improving FCF
• The Misconception of Negative NWC
• Summary
• 5. Debt
• Chapter Overview
• Bank Loans
• Cost of Capital Provided and Return to Investors: Two Sides of the Same Coin
• Bonds
• Basic Makeup of a Typical Bond
• Calculation of Bonds
• The (Inverse) Relationship between Bond Price and YTM
• Factors Determining the Return that the Lenders Require
• Available Alternatives
• Borrower’s Credentials
• Market Views
• Implications of Debt on Capital Structure
• Leverage
• Tax Benefits
• Economic Downturn, Covid-19 and Debt
• Summary
• References
• 6. Equity
• Chapter Overview
• Characteristics of Shareholders’ Equity
• rE > rD
• Determining the Cost of Equity
• Method 1: Dividend Growth Model
• Capital Asset Pricing Model (CAPM)
• Revisiting CAPM
• CAPM for Small, Private Businesses
• Weighted Average Cost of Capital
• Bringing NPV, FCF and WACC Together
• Summary
• Appendix: Calculating the Cost of Capital – MC Production, Inc.
• Cost of the Bond
• Cost of Equity
• WACC and FCF Discounting
• 7. Mergers and Acquisitions (I)
• Chapter Overview
• Terminology
• Takeover
• Merger
• Acquisition
• Mergers and Acquisitions
• Buyout
• Leverage Buyout and Private Equity
• Venture Capital
• Alternatives to M&A
• Organic Growth or “Greenfield”
• Strategic Alliances
• Formats of M&A
• M&A Approaches
• Rationale behind M&A
• 1 Operational
• 2 Industry-specific
• 3 Strategic
• 4 Financial
• 5 Personal
• Summary
• 8. Mergers and Acquisitions (II)
• Chapter Overview
• How can a Company be Valued?
• FCF-based Balance Sheet
• The Three Most Common Valuation Methods
• 1 WACC Method
• 2 Industry Comparables
• 3 M&A Comparables
• Putting the Three Approaches Together
• Important Points about Company Valuation
• There is no Single Value of a Company
• There are Inherent Biases
• Parameters have Impact
• The Final Transaction Value is Likely to be Different
• Summary
• 9. Corporate Finance for Growing Businesses
• Cash – Still One of the Fundamentals of Finance
• Dos and Don’ts when Valuing (Tech) Start-ups
• A Look at the Revenue …
• … and Cost
• Summary
• 10. Corporate Finance: The Big Picture
• Chapter Overview
• From Economics and Accounting …
• … To Corporate Finance
• 1 Capital Budgeting
• Investment Criteria
• FCF
• M&A and Company Valuation
• 2 Capital Structure
• Debt
• Equity
• WACC
• 3 Working Capital
• The Future of Corporate Finance
• Index