Principles of Finance

Contents
Preface
Chapter 1 Introduction to Finance
	Why It Matters
	1.1 What Is Finance?
	1.2 The Role of Finance in an Organization
	1.3 Importance of Data and Technology
	1.4 Careers in Finance
	1.5 Markets and Participants
	1.6 Microeconomic and Macroeconomic Matters
	1.7 Financial Instruments
	1.8 Concepts of Time and Value
	Summary
	Key Terms
	Multiple Choice
	Review Questions
	Video Activity
Chapter 2 Corporate Structure and Governance
	Why It Matters
	2.1 Business Structures
	2.2 Relationship between Shareholders and Company Management
	2.3 Role of the Board of Directors
	2.4 Agency Issues: Shareholders and Corporate Boards
	2.5 Interacting with Investors, Intermediaries, and Other Market Participants
	2.6 Companies in Domestic and Global Markets
	Summary
	Key Terms
	CFA Institute
	Multiple Choice
	Review Questions
	Video Activity
Chapter 3 Economic Foundations: Money and Rates
	Why It Matters
	3.1 Microeconomics
	3.2 Macroeconomics
	3.3 Business Cycles and Economic Activity
	3.4 Interest Rates
	3.5 Foreign Exchange Rates
	3.6 Sources and Characteristics of Economic Data
	Summary
	Key Terms
	CFA Institute
	Multiple Choice
	Review Questions
	Problems
	Video Activity
Chapter 4 Accrual Accounting Process
	Why It Matters
	4.1 Cash versus Accrual Accounting
	4.2 Economic Basis for Accrual Accounting
	4.3 How Does a Company Recognize a Sale and an Expense?
	4.4 When Should a Company Capitalize or Expense an Item?
	4.5 What Is “Profit” versus “Loss” for the Company?
	Summary
	Key Terms
	Multiple Choice
	Review Questions
	Problems
	Video Activity
Chapter 5 Financial Statements
	Why It Matters
	5.1 The Income Statement
	5.2 The Balance Sheet
	5.3 The Relationship between the Balance Sheet and the Income Statement
	5.4 The Statement of Owner’s Equity
	5.5 The Statement of Cash Flows
	5.6 Operating Cash Flow and Free Cash Flow to the Firm (FCFF)
	5.7 Common-Size Statements
	5.8 Reporting Financial Activity
	Summary
	Key Terms
	CFA Institute
	Multiple Choice
	Review Questions
	Problems
	Video Activity
Chapter 6 Measures of Financial Health
	Why It Matters
	6.1 Ratios: Condensing Information into Smaller Pieces
	6.2 Operating Efficiency Ratios
	6.3 Liquidity Ratios
	6.4 Solvency Ratios
	6.5 Market Value Ratios
	6.6 Profitability Ratios and the DuPont Method
	Summary
	Key Terms
	CFA Institute
	Multiple Choice
	Review Questions
	Problems
	Video Activity
Chapter 7 Time Value of Money I: Single Payment Value
	Why It Matters
	7.1 Now versus Later Concepts
	7.2 Time Value of Money (TVM) Basics
	7.3 Methods for Solving Time Value of Money Problems
	7.4 Applications of TVM in Finance
	Summary
	Key Terms
	CFA Institute
	Multiple Choice
	Review Questions
	Problems
	Video Activity
Chapter 8 Time Value of Money II: Equal Multiple Payments
	Why It Matters
	8.1 Perpetuities
	8.2 Annuities
	8.3 Loan Amortization
	8.4 Stated versus Effective Rates
	8.5 Equal Payments with a Financial Calculator and Excel
	Summary
	Key Terms
	CFA Institute
	Multiple Choice
	Problems
	Video Activity
Chapter 9 Time Value of Money III: Unequal Multiple Payment Values
	Why It Matters
	9.1 Timing of Cash Flows
	9.2 Unequal Payments Using a Financial Calculator or Microsoft Excel
	Summary
	Key Terms
	CFA Institute
	Multiple Choice
	Review Questions
	Problems
	Video Activity
Chapter 10 Bonds and Bond Valuation
	Why It Matters
	10.1 Characteristics of Bonds
	10.2 Bond Valuation
	10.3 Using the Yield Curve
	10.4 Risks of Interest Rates and Default
	10.5 Using Spreadsheets to Solve Bond Problems
	Summary
	Key Terms
	CFA Institute
	Multiple Choice
	Review Questions
	Problems
	Video Activity
Chapter 11 Stocks and Stock Valuation
	Why It Matters
	11.1 Multiple Approaches to Stock Valuation
	11.2 Dividend Discount Models (DDMs)
	11.3 Discounted Cash Flow (DCF) Model
	11.4 Preferred Stock
	11.5 Efficient Markets
	Summary
	Key Terms
	CFA Institute
	Multiple Choice
	Review Questions
	Problems
	Video Activity
Chapter 12 Historical Performance of US Markets
	Why It Matters
	12.1 Overview of US Financial Markets
	12.2 Historical Picture of Inflation
	12.3 Historical Picture of Returns to Bonds
	12.4 Historical Picture of Returns to Stocks
	Summary
	Key Terms
	Multiple Choice
	Review Questions
	Video Activity
Chapter 13 Statistical Analysis in Finance
	Why It Matters
	13.1 Measures of Center
	13.2 Measures of Spread
	13.3 Measures of Position
	13.4 Statistical Distributions
	13.5 Probability Distributions
	13.6 Data Visualization and Graphical Displays
	13.7 The R Statistical Analysis Tool
	Summary
	Key Terms
	CFA Institute
	Multiple Choice
	Review Questions
	Problems
	Video Activity
Chapter 14 Regression Analysis in Finance
	Why It Matters
	14.1 Correlation Analysis
	14.2 Linear Regression Analysis
	14.3 Best-Fit Linear Model
	14.4 Regression Applications in Finance
	14.5 Predictions and Prediction Intervals
	14.6 Use of R Statistical Analysis Tool for Regression Analysis
	Summary
	Key Terms
	Multiple Choice
	Review Questions
	Problems
	Video Activity
Chapter 15 How to Think about Investing
	Why It Matters
	15.1 Risk and Return to an Individual Asset
	15.2 Risk and Return to Multiple Assets
	15.3 The Capital Asset Pricing Model (CAPM)
	15.4 Applications in Performance Measurement
	15.5 Using Excel to Make Investment Decisions
	Summary
	Key Terms
	CFA Institute
	Multiple Choice
	Review Questions
	Problems
	Video Activity
Chapter 16 How Companies Think about Investing
	Why It Matters
	16.1 Payback Period Method
	16.2 Net Present Value (NPV) Method
	16.3 Internal Rate of Return (IRR) Method
	16.4 Alternative Methods
	16.5 Choosing between Projects
	16.6 Using Excel to Make Company Investment Decisions
	Summary
	Key Terms
	CFA Institute
	Multiple Choice
	Review Questions
	Problems
	Video Activity
Chapter 17 How Firms Raise Capital
	Why It Matters
	17.1 The Concept of Capital Structure
	17.2 The Costs of Debt and Equity Capital
	17.3 Calculating the Weighted Average Cost of Capital
	17.4 Capital Structure Choices
	17.5 Optimal Capital Structure
	17.6 Alternative Sources of Funds
	Summary
	Key Terms
	CFA Institute
	Multiple Choice
	Review Questions
	Problems
	Video Activity
Chapter 18 Financial Forecasting
	Why It Matters
	18.1 The Importance of Forecasting
	18.2 Forecasting Sales
	18.3 Pro Forma Financials
	18.4 Generating the Complete Forecast
	18.5 Forecasting Cash Flow and Assessing the Value of Growth
	18.6 Using Excel to Create the Long-Term Forecast
	Summary
	Key Terms
	Multiple Choice
	Review Questions
	Problems
	Video Activity
Chapter 19 The Importance of Trade Credit and Working Capital in Planning
	Why It Matters
	19.1 What Is Working Capital?
	19.2 What Is Trade Credit?
	19.3 Cash Management
	19.4 Receivables Management
	19.5 Inventory Management
	19.6 Using Excel to Create the Short-Term Plan
	Summary
	Key Terms
	Multiple Choice
	Review Questions
	Video Activity
Chapter 20 Risk Management and the Financial Manager
	Why It Matters
	20.1 The Importance of Risk Management
	20.2 Commodity Price Risk
	20.3 Exchange Rates and Risk
	20.4 Interest Rate Risk
	Summary
	Key Terms
	CFA Institute
	Multiple Choice
	Review Questions
	Problems
	Video Activity
Index
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Copyright
Title Page
Dedication
Contents
Chapter 1: ‘I’m thinking’ – Oh, but are you?
Chapter 2: Renegade perception
Chapter 3: The Pushbacker sting
Chapter 4: ‘Covid’: The calculated catastrophe
Chapter 5: There is no ‘virus’
Chapter 6: Sequence of deceit
Chapter 7: War on your mind
Chapter 8: ‘Reframing’ insanity
Chapter 9: We must have it? So what is it?
Chapter 10: Human 2.0
Chapter 11: Who controls the Cult?
Chapter 12: Escaping Wetiko
Postscript
Appendix: Cowan-Kaufman-Morell Statement on Virus Isolation
Bibliography
Index
Copyright
Title Page
Dedication
Contents
Chapter 1: ‘I’m thinking’ – Oh, but are you?
Chapter 2: Renegade perception
Chapter 3: The Pushbacker sting
Chapter 4: ‘Covid’: The calculated catastrophe
Chapter 5: There is no ‘virus’
Chapter 6: Sequence of deceit
Chapter 7: War on your mind
Chapter 8: ‘Reframing’ insanity
Chapter 9: We must have it? So what is it?
Chapter 10: Human 2.0
Chapter 11: Who controls the Cult?
Chapter 12: Escaping Wetiko
Postscript
Appendix: Cowan-Kaufman-Morell Statement on Virus Isolation
Bibliography
Index
Contents
Preface
Chapter 1 Prerequisites
	Introduction to Prerequisites
	1.1 Real Numbers: Algebra Essentials
	1.2 Exponents and Scientific Notation
	1.3 Radicals and Rational Exponents
	1.4 Polynomials
	1.5 Factoring Polynomials
	1.6 Rational Expressions
	Chapter Review
	Exercises
Chapter 2 Equations and Inequalities
	Introduction to Equations and Inequalities
	2.1 The Rectangular Coordinate Systems and Graphs
	2.2 Linear Equations in One Variable
	2.3 Models and Applications
	2.4 Complex Numbers
	2.5 Quadratic Equations
	2.6 Other Types of Equations
	2.7 Linear Inequalities and Absolute Value Inequalities
	Chapter Review
	Exercises
Chapter 3 Functions
	Introduction to Functions
	3.1 Functions and Function Notation
	3.2 Domain and Range
	3.3 Rates of Change and Behavior of Graphs
	3.4 Composition of Functions
	3.5 Transformation of Functions
	3.6 Absolute Value Functions
	3.7 Inverse Functions
	Chapter Review
	Exercises
Chapter 4 Linear Functions
	Introduction to Linear Functions
	4.1 Linear Functions
	4.2 Modeling with Linear Functions
	4.3 Fitting Linear Models to Data
	Chapter Review
	Exercises
Chapter 5 Polynomial and Rational Functions
	Introduction to Polynomial and Rational Functions
	5.1 Quadratic Functions
	5.2 Power Functions and Polynomial Functions
	5.3 Graphs of Polynomial Functions
	5.4 Dividing Polynomials
	5.5 Zeros of Polynomial Functions
	5.6 Rational Functions
	5.7 Inverses and Radical Functions
	5.8 Modeling Using Variation
	Chapter Review
	Exercises
Chapter 6 Exponential and Logarithmic Functions
	Introduction to Exponential and Logarithmic Functions
	6.1 Exponential Functions
	6.2 Graphs of Exponential Functions
	6.3 Logarithmic Functions
	6.4 Graphs of Logarithmic Functions
	6.5 Logarithmic Properties
	6.6 Exponential and Logarithmic Equations
	6.7 Exponential and Logarithmic Models
	6.8 Fitting Exponential Models to Data
	Chapter Review
	Exercises
Chapter 7 Systems of Equations and Inequalities
	Introduction to Systems of Equations and Inequalities
	7.1 Systems of Linear Equations: Two Variables
	7.2 Systems of Linear Equations: Three Variables
	7.3 Systems of Nonlinear Equations and Inequalities: Two Variables
	7.4 Partial Fractions
	7.5 Matrices and Matrix Operations
	7.6 Solving Systems with Gaussian Elimination
	7.7 Solving Systems with Inverses
	7.8 Solving Systems with Cramer's Rule
	Chapter Review
	Exercises
Chapter 8 Analytic Geometry
	Introduction to Analytic Geometry
	8.1 The Ellipse
	8.2 The Hyperbola
	8.3 The Parabola
	8.4 Rotation of Axes
	8.5 Conic Sections in Polar Coordinates
	Chapter Review
	Exercises
Chapter 9 Sequences, Probability, and Counting Theory
	Introduction to Sequences, Probability and Counting Theory
	9.1 Sequences and Their Notations
	9.2 Arithmetic Sequences
	9.3 Geometric Sequences
	9.4 Series and Their Notations
	9.5 Counting Principles
	9.6 Binomial Theorem
	9.7 Probability
	Chapter Review
	Exercises
Answer Key
	Chapter 1
	Chapter 2
	Chapter 3
	Chapter 4
	Chapter 5
	Chapter 6
	Chapter 7
	Chapter 8
	Chapter 9
Index
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Contents
Preface
Chapter 1 An Introduction to Sociology
	Introduction
	1.1 What Is Sociology?
	1.2 The History of Sociology
	1.3 Theoretical Perspectives in Sociology
	1.4 Why Study Sociology?
	Key Terms
	Section Summary
	Section Quiz
	Short Answer
	Further Research
	References
Chapter 2 Sociological Research
	Introduction
	2.1 Approaches to Sociological Research
	2.2 Research Methods
	2.3 Ethical Concerns
	Key Terms
	Section Summary
	Section Quiz
	Short Answer
	Further Research
	References
Chapter 3 Culture
	Introduction
	3.1 What Is Culture?
	3.2 Elements of Culture
	3.3 High, Low, Pop, Sub, Counter-culture and Cultural Change
	3.4 Theoretical Perspectives on Culture
	Key Terms
	Section Summary
	Section Quiz
	Short Answer
	Further Research
	References
Chapter 4 Society and Social Interaction
	Introduction
	4.1 Types of Societies
	4.2 Theoretical Perspectives on Society
	4.3 Social Constructions of Reality
	Key Terms
	Section Summary
	Section Quiz
	Short Answer
	Further Research
	References
Chapter 5 Socialization
	Introduction
	5.1 Theories of Self-Development
	5.2 Why Socialization Matters
	5.3 Agents of Socialization
	5.4 Socialization Across the Life Course
	Key Terms
	Section Summary
	Section Quiz
	Short Answer
	Further Research
	References
Chapter 6 Groups and Organization
	Introduction
	6.1 Types of Groups
	6.2 Group Size and Structure
	6.3 Formal Organizations
	Key Terms
	Section Summary
	Section Quiz
	Short Answer
	Further Research
	References
Chapter 7 Deviance, Crime, and Social Control
	Introduction
	7.1 Deviance and Control
	7.2 Theoretical Perspectives on Deviance and Crime
	7.3 Crime and the Law
	Key Terms
	Section Summary
	Section Quiz
	Short Answer
	Further Research
	References
Chapter 8 Media and Technology
	Introduction
	8.2 Media and Technology in Society
	8.3 Global Implications of Media and Technology
	8.4 Theoretical Perspectives on Media and Technology
	Key Terms
	Section Summary
	Section Quiz
	Short Answer
	Further Research
	References
Chapter 9 Social Stratification in the United States
	Introduction
	9.1 What Is Social Stratification?
	9.2 Social Stratification and Mobility in the United States
	9.3 Global Stratification and Inequality
	9.4 Theoretical Perspectives on Social Stratification
	Key Terms
	Section Summary
	Section Quiz
	Short Answer
	Further Research
	References
Chapter 10 Global Inequality
	Introduction
	10.1 Global Stratification and Classification
	10.2 Global Wealth and Poverty
	10.3 Theoretical Perspectives on Global Stratification
	Key Terms
	Section Summary
	Section Quiz
	Short Answer
	Further Research
	References
Chapter 11 Race and Ethnicity
	Introduction
	11.1 Racial, Ethnic, and Minority Groups
	11.2 Theoretical Perspectives on Race and Ethnicity
	11.3 Prejudice, Discrimination, and Racism
	11.4 Intergroup Relationships
	11.5 Race and Ethnicity in the United States
	Key Terms
	Section Summary
	Section Quiz
	Short Answer
	Further Research
	References
Chapter 12 Gender, Sex, and Sexuality
	Introduction
	12.1 Sex, Gender, Identity, and Expression
	12.2 Gender and Gender Inequality
	12.3 Sexuality
	Key Terms
	Section Summary
	Section Quiz
	Short Answer
	Further Research
	References
Chapter 13 Aging and the Elderly
	Introduction
	13.1 Who Are the Elderly? Aging in Society
	13.2 The Process of Aging
	13.3 Challenges Facing the Elderly
	13.4 Theoretical Perspectives on Aging
	Key Terms
	Section Summary
	Section Quiz
	Short Answer
	Further Research
	References
Chapter 14 Relationships, Marriage, and Family
	Introduction
	14.1 What Is Marriage? What Is a Family?
	14.2 Variations in Family Life
	14.3 Challenges Families Face
	Key Terms
	Section Summary
	Section Quiz
	Short Answer
	Further Research
	References
Chapter 15 Religion
	Introduction
	15.1 The Sociological Approach to Religion
	15.2 World Religions
	15.3 Religion in the United States
	Key Terms
	Section Summary
	Section Quiz
	Short Answer
	Further Research
	References
Chapter 16 Education
	Introduction
	16.1 Education around the World
	16.2 Theoretical Perspectives on Education
	16.3 Issues in Education
	Key Terms
	Section Summary
	Section Quiz
	Short Answer
	Further Research
	References
Chapter 17 Government and Politics
	Introduction
	17.1 Power and Authority
	17.2 Forms of Government
	17.3 Politics in the United States
	17.4 Theoretical Perspectives on Government and Power
	Key Terms
	Section Summary
	Section Quiz
	Short Answer
	Further Research
	References
Chapter 18 Work and the Economy
	Introduction to Work and the Economy
	18.1 Economic Systems
	18.2 Globalization and the Economy
	18.3 Work in the United States
	Key Terms
	Section Summary
	Section Quiz
	Short Answer
	Further Research
	References
Chapter 19 Health and Medicine
	Introduction
	19.1 The Social Construction of Health
	19.2 Global Health
	19.3 Health in the United States
	19.4 Comparative Health and Medicine
	19.5 Theoretical Perspectives on Health and Medicine
	Key Terms
	Section Summary
	Section Quiz
	Short Answer
	Further Research
	References
Chapter 20 Population, Urbanization, and the Environment
	Introduction
	20.1 Demography and Population
	20.2 Urbanization
	20.3 The Environment and Society
	Key Terms
	Section Summary
	Section Quiz
	Short Answer
	Further Research
	References
Chapter 21 Social Movements and Social Change
	Introduction to Social Movements and Social Change
	21.1 Collective Behavior
	21.2 Social Movements
	21.3 Social Change
	Key Terms
	Section Summary
	Section Quiz
	Short Answer
	References
Answer Key
	Chapter 1
	Chapter 2
	Chapter 3
	Chapter 4
	Chapter 5
	Chapter 6
	Chapter 7
	Chapter 8
	Chapter 9
	Chapter 10
	Chapter 11
	Chapter 12
	Chapter 13
	Chapter 14
	Chapter 15
	Chapter 16
	Chapter 17
	Chapter 18
	Chapter 19
	Chapter 20
	Chapter 21
Index