Description
The study of finance focuses on making decisions that enhance the value of the firm. This is done by providing customers with the best products and services in a cost-effective way. In a sense we, the authors of Foundations of Finance, are trying to do the same thing. That is, we have tried to present financial management to students in a way that makes their studies as easy and productive as possible by using a step-by-step approach to walking them through each new concept or problem.
We are very proud of the history of this volume, as it was the first “shortened book” of financial management when it was published in its first edition. The book broke new ground by reducing the number of chapters down to the foundational materials and by trying to present the subject in understandable terms. We continue our quest for readability with the Eighth Edition.
Pedagogy That Works
This book provides students with a conceptual understanding of the financial decisionmaking process, rather than just an introduction to the tools and techniques of finance. For the student, it is all too easy to lose sight of the logic that drives finance and to focus instead on memorizing formulas and procedures. As a result, students have a difficult time understanding the interrelationships among the topics covered. Moreover, later in life when the problems encountered do not match the textbook presentation, students may find themselves unprepared to abstract from what they learned. To overcome this problem, the opening chapter presents five underlying principles of finance, which serve as a springboard for the chapters and topics that follow. In essence, the student is presented with a cohesive, interrelated perspective from which future problems can be approached.
With a focus on the big picture, we provide an introduction to financial decision making rooted in current financial theory and in the current state of world economic conditions. This focus is perhaps most apparent in the attention given to the capital markets and their influence on corporate financial decisions. What results is an introductory treatment of a discipline rather than the treatment of a series of isolated problems that face the financial manager. The goal of this text is not merely to teach the tools of a discipline or trade but also to enable students to abstract what is learned to new and yet unforeseen problems—in short, to educate the student in finance.