Financial management continues to change at a rapid pace. Advancements are occurring not only in the theory of financial management but also in its real-world practice. One result has been for financial management to take on a greater strategic focus, as managers struggle to create value within a corporate setting. In the process of value creation, financial managers are increasingly supplementing the traditional metrics of performance with new methods that encourage a greater role for uncertainty and multiple assumptions. Corporate governance issues, ethical dilemmas, conflicting stakeholder claims, a downsized corporate environment, the globalization of finance, e-commerce, strategic alliances, the growth of outsourcing, and a host of other issues and considerations now permeate the landscape of financial decision making. It is indeed a time of both challenge and opportunity. The purpose of the thirteenth edition of Fundamentals of Financial Management is to enable you to understand the financial decision-making process and to interpret the impact that financial decisions will have on value creation. The book, therefore, introduces you to the three major decision-making areas in financial management: the investment, financing, and asset management decisions. We explore finance, including its frontiers, in an easy-to-understand, user-friendly manner. Although the book is designed for an introductory course in financial management, it can be used as a reference tool as well. For example, participants in management development programs, candidates preparing for various professional certifications (e.g., Certified Management Accountant and Chartered Certified Accountant), and practicing finance and accounting professionals will find it useful. And, because of the extensive material available through the text’s website (which we will discuss shortly), the book is ideal for web-based training and distance learning.
There are many important changes in this new edition. Rather than list them all, we will explain some essential themes that governed our revisions and, in the process, highlight some of the changes. The institutional material – necessary for understanding the environment in which financial decisions are made – was updated. The book continues to grow more international in scope. New sections, examples, and boxed features have been added throughout the book that focus on the international dimensions of financial management. Attention was also given to streamlining coverage and better expressing fundamental ideas in every chapter. Chapter 1, The Role of Financial Management, has benefitted from an expanded discussion of corporate social responsibility to include sustainability. A discussion of how “bonus depreciation” works under the Economic Stimulus Act (ESA) of 2008 has been incorporated into Chapter 2, The Business, Tax, and Financial Environments. (Note: While bonus depreciation is a “temporary” situation in the US, it has been a recurring phenomenon.) Chapter 6, Financial Statement Analysis, has benefitted from the addition of a discussion of the push for “convergence” of accounting standards around the world. Accounts receivable conversion (ARC), the Check Clearing for the 21st Century Act (Check 21), remote deposit capture (RDC), and business process outsourcing (BPO) are all introduced in Chapter 9, Cash and Marketable Securities Management.
Fundamentals of Financial Management By James C. Van Horne (13th Edition)