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Test Bank for Foundations of Financial Management 17th Edition by Stanley B. Block, Geoffrey A. Hirt, Bartley R. Danielsen |All Chapters, Year-2024| £12.73
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Test Bank for Foundations of Financial Management 17th Edition by Stanley B. Block, Geoffrey A. Hirt, Bartley R. Danielsen |All Chapters, Year-2024|
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Test Bank for Foundations of Financial Management 17th Edition by Stanley B. Block, Geoffrey A. Hirt, Bartley R. Danielsen |All Chapters, Year-2024|

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  • January 12, 2024
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  • 2023/2024
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Test Bank
Foundations of Financial Management
17th Edition
by
Stanley B. Block, Geoffrey A. Hirt, Bartley R.
Danielsen

,Contents
Cover


About This Ebook


Title Page


Copyright


About the Authors


Preface


Brief Contents


List of Selected Managerial Examples and Boxes


List of Selected Global Examples and Boxes


PART 1  |   INTRODUCTION

1 The Goals and Activities of Financial Management    2

The Field of Finance    3
Evolution of the Field of Finance    3
Modern Issues in Finance    4
Risk Management and a Review of the Financial Crisis    4
The Dodd–Frank Act     5
The Impact of Information Technology    7
Activities of Financial Management    7
Forms of Organization    8
Impact of 2017 Tax Cuts and Jobs Act on Organizations    8
Sole Proprietorship    8
Partnership    9
Corporation    10
Corporate Governance    11
The Sarbanes–Oxley Act    13
Goals of Financial Management    13
A Valuation Approach    14
Maximizing Shareholder Wealth    14
Management and Stockholder Wealth    15
Social Responsibility and Ethical Behavior    15

, The Role of the Financial Markets    17
Structure and Functions of the Financial Markets    18
Allocation of Capital    18
Institutional Pressure on Public Companies to Restructure    19
Internationalization of the Financial Markets    20
Information Technology and Changes in the Capital Markets    20
Format of the Text    21
Parts    21
1. Introduction    21
2. Financial Analysis and Planning    22
3. Working Capital Management    22
4. The Capital Budgeting Process    22
5. Long-Term Financing    22
6. Expanding the Perspective of Corporate Finance    22
List of Terms    23
Discussion Questions    23
Web Exercise    24


PART 2  |  FINANCIAL ANALYSIS AND PLANNING    25

2 Review of Accounting    26

Income Statement    27
Return to Capital    28
Price-Earnings Ratio Applied to Earnings per Share    28
Limitations of the Income Statement    29
Balance Sheet    30
Interpretation of Balance Sheet Items    30
Concept of Net Worth    32
Limitations of the Balance Sheet    32
Statement of Cash Flows    34
Developing an Actual Statement    34
Determining Cash Flows from Operating Activities    35
Determining Cash Flows from Investing Activities    38
Determining Cash Flows from Financing Activities    38
Combining the Three Sections of the Statement    39
Depreciation and Funds Flow    41
Free Cash Flow    44
Income Tax Considerations    44
Corporate Tax Rates    44
Cost of a Tax-Deductible Expense    46
Depreciation as a Tax Shield    46
Summary    47
List of Terms    47
Discussion Questions    48
Practice Problems and Solutions    48
Problems    49
Web Exercise    57


3 Financial Analysis    58

Ratio Analysis    59
Classification System    59
The Analysis    60
A. Profitability Ratios     61
B. Asset Utilization Ratios    64
C. Liquidity Ratios    65
D. Debt Utilization Ratios     65
Trend Analysis    67
Impact of Inflation on Financial Analysis    69

, An Illustration    70
Disinflation Effect    72
Deflation    72
Other Elements of Distortion in Reported Income    73
Explanation of Discrepancies    73
Sales    73
Cost of Goods Sold    74
Net Income    74
Summary    75
List of Terms    75
Discussion Questions    75
Practice Problems and Solutions    76
Problems    79
Comprehensive Problem    90
Comprehensive Problem    92
Web Exercise    95


4 Financial Forecasting    96

Constructing Pro Forma Statements    97
Pro Forma Income Statement    98
Establish a Sales Projection    98
Determine a Production Schedule and the Gross Profit    98
Cost of Goods Sold     100
Other Expense Items    101
Actual Pro Forma Income Statement    101
Cash Budget    102
Cash Receipts    102
Cash Payments    103
Actual Budget    104
Pro Forma Balance Sheet    105
Explanation of Pro Forma Balance Sheet    107
Analysis of Pro Forma Statement    108
Percent-of-Sales Method    108
Summary    111
List of Terms    111
Discussion Questions    112
Practice Problems and Solutions    112
Problems    113
Comprehensive Problem    122
Comprehensive Problem    123
Web Exercise    124


5 Operating and Financial Leverage    125

Leverage in a Business    126
Operating Leverage    126
Break-Even Analysis    126
A More Conservative Approach    128
The Risk Factor    130
Cash Break-Even Analysis    130
Degree of Operating Leverage    131
Leveraged Firm    131
Conservative Firm    132
Limitations of Analysis    133
Financial Leverage    133
Impact on Earnings    134
Degree of Financial Leverage    136
Plan A (Leveraged)    137
Plan B (Conservative)    137
Limitations to Use of Financial Leverage    137

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