Basic Concepts in Finance

The management of any corporation has a task and a mission to create value for all parties involved in that corporation, its stakeholders. Within this group, it is in particular the suppliers of capital who are of vital importance. They are the shareholders and the providers of interest-bearing loans. Without their capital and their collaboration a corporation cannot exist. Still, they will only offer support if they expect a sufficient rate of return on their invested capital.

For this reason the central objective in financial management is to enlarge a company’s market value for its capital providers while taking into account the interests of other parties involved. Financial managers, however, can only live up to this promise if they are familiar with the way in which this market value is determined and with the elements that play a role in this valuation process.

This book presents a clear description of the fundamentals of Finance, supported by illustrative examples. It offers everyone involved in the management of a company an opportunity to become a better discussion partner for financial experts, and it ultimately offers them a solid basis to become financial experts themselves.