Entrepreneurial finance

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Title:

Personal Author:

Adelman, Philip J.

Edition:

6th ed.

Publication Information:

Boston : Pearson, 2014

Physical Description:

xi, 487 pages ; 26 cm.

ISBN:

9780133140514

General Note:

Includes index

Subject Term:

Small business -- Finance

Added Author:

Marks, Alan M.

Available:*

Library	Item Barcode	Call Number	Material Type	Item Category 1	Status
Searching... Perpustakaan Raja Zarith Sofiah	35000000003742	HG4027.7 A34 2014	Open Access Book	Book	Searching... Unknown

For many, starting a business can be an overwhelming experience. Understanding the financial aspects of running a business can be even more daunting. Entrepreneurial Finance, Sixth Edition was written to help a broad range of U.S. business owners understand the financial aspects of entrepreneurship. Unlike traditional corporate finance books, this text explains the financial topics most important to running a profitable small business suchasinventory control, time value of money, working capital management, and forecasting. Updated to reflect recent economic trends, this edition also shows how two popular business tools (excel and TI BA II Plus calculator) can assist business owners in problem-solving and decision-making.

Features

Tackles the financial aspects of business entrepreneurship-- from business planning to inventory control, to time value of money, to working capital management, to forecasting and financial planning for both the entrepreneur and the business.

Provides critical background knowledge-- by presenting basic economic and financial concepts early in the text.

Explains the different types of small businesses-- by examining the financial statements for Sole Proprietorships, Partnerships, LLCs and Corporations.

Explains all six time value of money formulas-- and their application in both personal financial planning and business financial planning.

Offers a glimpse at real small businesses-- using short end-of-chapter case studies.

Shows how to solve sample problems-- using excel and the Texas Instruments BAII Plus calculator.

Includes time value of money tables-- see Appendix B.

Preface	p. ix
Chapter 1 Financial and Economic Concepts	p. 1
Basic Financial Concepts	p. 2
Importance of Finance	p. 3
Economic Concepts of Finance	p. 3
Scarce Resources	p. 4
Opportunity Costs	p. 6
Savings, Income, Expenditures, and Taxes	p. 8
Supply of Money Saved	p. 11
Demand for Borrowed Funds	p. 15
Federal Reserve Policy	p. 18
Inflation	p. 18
Risk	p. 20
Conclusion	p. 23
Review and Discussion Questions	p. 24
Exercises and Problems	p. 24
Recommended Team Assignment	p. 25
Case Study: Macy's Housewares, Incorporated	p. 25
Chapter 2 Financial Management and Planning	p. 29
Management Functions	p. 30
Planning	p. 30
Organizing	p. 31
Staffing	p. 32
Directing	p. 32
Controlling	p. 33
Business Organizations and Ownership	p. 33
Sole Proprietorship	p. 34
Partnership	p. 36
Corporation	p. 38
Limited Liability Company	p. 41
Franchise	p. 43
Nonprofit Organizations	p. 43
Starting a Business	p. 44
Development of a Business Plan	p. 46
Executive Summary	p. 46
General Company Description	p. 47
Business Ownership Succession Plans	p. 52
Financing a Business or Raising Capital	p. 52
Sources of Financing	p. 54
Conclusion	p. 56
Review and Discussion Questions	p. 57
Exercises and Problems	p. 57
Suggested Group Project	p. 58
Case Study: Introduction to Entrepreneurship	p. 59
Chapter 3 Financial Statements	p. 63
Personal Cash Flow Statement	p. 66
Income Statement	p. 67
Chart of Accounts	p. 67
Statement of Financial Position	p. 72
Balance Sheet	p. 74
Sole Proprietorship	p. 78
Partnership	p. 78
Public Corporations	p. 79
Owner's Equity	p. 82
Statement of Cash Flows	p. 82
Problems with Financial Statements	p. 85
Conclusion	p. 87
Review and Discussion Questions	p. 88
Exercises and Problems	p. 88
Recommended Team Assignments	p. 89
Case Study: DPSystems, LLC	p. 90
Chapter 4 Analysis of Financial Statements	p. 95
Vertical Analysis	p. 97
Horizontal Analysis	p. 99
Ratio Analysis	p. 101
Types of Business Ratios	p. 101
Liquidity Ratios	p. 101
Current Ratio	p. 102
Quick (Acid Test) Ratio	p. 102
Activity Ratios	p. 103
Inventory Turnover Ratio	p. 103
Accounts Receivable Turnover Ratio	p. 104
Fixed Asset Turnover Ratio	p. 105
Total Asset Turnover Ratio	p. 105
Leverage Ratios	p. 106
Debt-to-Equity Ratio	p. 106
Debt-to-Total-Assets Ratio	p. 107
Times-Interest-Earned Ratio	p. 107
Profitability Ratios	p. 108
Gross Profit Margin Ratio	p. 108
Operating Profit Margin Ratio	p. 109
Net Profit Margin Ratio	p. 109
Operating Return on Assets Ratio	p. 110
Net Return on Assets Ratio	p. 110
Return on Equity Ratio	p. 110
Market Ratios	p. 111
Earnings per Share Ratio	p. 111
Price Earnings Ratio	p. 112
Operating Cash Flow per Share Ratio	p. 113
Free Cash Flow per Share	p. 114
Sources of Comparative Ratios	p. 116
Conclusion	p. 116
Review and Discussion Questions	p. 117
Exercises and Problems	p. 118
Recommended Team Assignment	p. 122
Case Study: Mosbacher Insurance Agency	p. 122
Background	p. 122
Gaming Experience	p. 123
Mosbacher Insurance Company	p. 124
Entrepreneurship at Work	p. 124
The result	p. 125
Chapter 5 Profit, Profitability, and Break-Even Analysis	p. 127
Efficiency and Effectiveness	p. 128
Profit	p. 129
Profitability	p. 129
Earning Power	p. 130
Break-Even Analysis	p. 131
Break-Even Quantity	p. 132
Break-Even Dollars	p. 136
Break-Even Charts	p. 137
Leverage	p. 138
Operating Leverage	p. 139
Financial Leverage	p. 140
Bankruptcy	p. 143
Conclusion	p. 146
Review and Discussion Questions	p. 147
Exercises and Problems	p. 147
Recommended Team Assignment	p. 150
Case Study: Mark Wheeler Craftsman, Inc.	p. 150
Chapter 6 Forecasting and Pro Forma Financial Statements	p. 153
Forecasting	p. 154
Types of Forecasting Models	p. 156
Mean Absolute Deviation	p. 161
Practical Sales Forecasting for Start-Up Businesses	p. 175
Pro Forma Financial Statements	p. 178
Pro Forma Income Statement	p. 178
Pro Forma Cash Budget	p. 180
Pro Forma Balance Sheet	p. 184
Monitoring and Controlling the Business	p. 188
Start-Up Business Costs Revisited	p. 188
Gantt Chart	p. 189
Conclusion	p. 191
Review and Discussion Questions	p. 191
Exercises and Problems	p. 192
Recommended Team Assignment	p. 195
Case Study: Hannah's Donut Shop	p. 196
Historical Background	p. 197
Environmental Changes	p. 198
Changes in Measurement Systems	p. 198
Changes in Strategy	p. 199
Implementing the Five-Step Process and Drum Buffer Rope	p. 202
Step 1	p. 202
Step 2	p. 202
Step 3	p. 203
The Change Process	p. 203
Step 4	p. 204
Step 5	p. 204
Results	p. 204
Shirring Constraints	p. 205
Summary	p. 206
Chapter 7 Working Capital Management	p. 207
Working Capital	p. 208
Working Capital Management	p. 208
Current Asset Management	p. 210
Cash Management	p. 210
Marketable Securities Management	p. 213
Accounts Receivable Management	p. 214
Inventory Management	p. 219
Economic Order Quantity Formula	p. 219
Types of Inventories	p. 224
Current Liabilities Management	p. 228
Short-Term Debt Management	p. 228
Accrued Liabilities Management	p. 230
Accounts Payable Management	p. 231
Conclusion	p. 236
Review and Discussion Questions	p. 237
Exercises and Problems	p. 238
Recommended Team Assignment	p. 240
Case Study: Associated Steel Trading, LLC	p. 240
Background	p. 240
Chapter 8 Time Value of Money-Part I: Future and Present Value of Lump Sums	p. 243
Simple Interest	p. 245
Fixed Principal Commercial Loans	p. 246
Bridge Loans	p. 249
Bank Discount	p. 250
Compound Interest	p. 254
Financial Calculators	p. 255
Rounding Errors	p. 256
Effective Rate	p. 257
Time-Value-of-Money Methods	p. 259
Future Value of a Lump Sum	p. 260
Present Value of a Future Lump Sum	p. 263
Internal Rate of Return	p. 268
Conclusion	p. 271
Review and Discussion Questions	p. 272
Exercises and Problems	p. 272
Recommended Team Assignment	p. 274
Case Study: Blue Bonnet Café	p. 275
Chapter 9 Time Value of Money-Part II: Annuities	p. 279
Future Value of an Ordinary Annuity	p. 280
Future Value of an Annuity Due	p. 286
Present Value of an Ordinary Annuity	p. 291
Present Value of an Annuity Due	p. 294
Present Value and Amortization	p. 298
Amortization	p. 300
Combining Lump Sum and Annuities into the Same Problem	p. 304
Conclusion	p. 308
Review and Discussion Questions	p. 308
Exercises and Problems	p. 309
Recommended Team Assignment	p. 311
Case Study: Entrepreneurial Spirit	p. 311
Chapter 10 Capital Budgeting	p. 315
Capital Budgeting	p. 316
Factors Affecting Capital Budgeting	p. 317
Changes in Government Regulations	p. 317
Research and Development	p. 318
Changes in Business Strategy	p. 318
Formulating a Proposal	p. 319
Costs in Capital Budgeting	p. 319
Benefits in Capital Budgeting	p. 320
Evaluating the Data (Techniques of Capital Budgeting)	p. 323
Payback	p. 324
Net Present Value	p. 324
Profitability Index	p. 330
Internal Rate of Return	p. 331
Accounting Rate of Return	p. 335
Lowest Total Cost	p. 336
Making the Decision	p. 338
Following Up	p. 339
Taking Corrective Action	p. 339
Conclusion	p. 340
Review and Discussion Questions	p. 341
Exercises and Problems	p. 342
Recommended Group Activity	p. 345
Case Study: SWAN Rehabilitation Company: A Great Success Story	p. 345
Chapter 11 Personal Finance	p. 349
Risk	p. 350
Identification of Risk Exposure	p. 351
Risk Management	p. 351
Life, Health, Disability, Property, and Liability Insurance	p. 353
Financial Planning Goals	p. 358
Investments	p. 358
Cash Equivalents	p. 358
Certificates of Deposit	p. 359
Bonds	p. 360
Stock	p. 364
Mutual Funds	p. 370
Real Estate	p. 373
Precious Metals	p. 375
Collectibles	p. 375
Investment Strategies	p. 376
Short-Term Investment Strategies	p. 376
Long-Term Investment Strategies	p. 377
Pension Planning	p. 377
Retirement Plans	p. 378
Retirement Strategies	p. 383
Retirement Strategy Examples	p. 384
Estate Planning	p. 387
Conclusion	p. 391
Review and Discussion Questions	p. 391
Exercises and Problems	p. 392
Recommended Group Activities	p. 395
Case Study: The Gilberts: An Entrepreneurial Family	p. 396
Appendix A Working with Spreadsheets and Calculators	p. 399
Spreadsheet Basics	p. 399
Formula Entry	p. 403
Simple Interest	p. 403
Compound Interest or Future Value of a Lump Sum	p. 403
Present Value of a Future Lump Sum	p. 405
Future Value of an Ordinary Annuity	p. 406
Future Value of an Annuity Due	p. 408
Present Value of an Ordinary Annuity	p. 409
Present Value of an Annuity Due	p. 411
Working with Calculators	p. 412
Appendix B Time-Value-of-Money Tables	p. 417
Appendix C Answers to Even-Numbered Exercises and Problems	p. 425
Chapter 1 p. 425
Chapter 2 p. 425
Chapter 3 p. 426
Chapter 4 p. 427
Chapter 5 p. 430
Chapter 6 p. 431
Chapter 7 p. 435
Chapter 8 p. 435
Chapter 9 p. 438
Chapter 10 p. 442
Chapter 11 p. 444
Case Studies	p. 447
Glossary	p. 463
Index	p. 477

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