A way of thinking about finance We are very pleased with the success of the first three editions of the book. It has encouraged us to retain the approach in order to explain corporate finance to students and professionals. There are four key features that distinguish this book from the many other corporate finance text books available on the market today: Our strong belief that financial analysis is part of corporate finance. Corporate Finance is neither a theoretical textbook nor a practical workbook. It is a book in which theory and practice are constantly set off against each other, in the same way as in our daily practice as investment bankers, as board members of several listed and unlisted companies, as business angels and as teachers at the Bocconi and HEC Paris business schools. Emphasis is placed on concepts, intended to give you an understanding of situations, rather than on techniques, which tend to shift and change over time.
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A way of thinking about finance We are very pleased with the success of the first three editions of the book. It has encouraged us to retain the approach in order to explain corporate finance to students and professionals.
There are four key features that distinguish this book from the many other corporate finance text books available on the market today: Our strong belief that financial analysis is part of corporate finance. Corporate Finance is neither a theoretical textbook nor a practical workbook. It is a book in which theory and practice are constantly set off against each other, in the same way as in our daily practice as investment bankers, as board members of several listed and unlisted companies, as business angels and as teachers at the Bocconi and HEC Paris business schools.
Emphasis is placed on concepts, intended to give you an understanding of situations, rather than on techniques, which tend to shift and change over time. Financial concepts are international, but they are much easier to grasp when they are set in a familiar context. We have tried to give examples and statistics from all around the world to illustrate the concepts.
The five sections This book starts with an introductory chapter reiterating the idea that corporate financiers are the bridge between the economy and the realm of finance.
Increasingly, they must play the role of marketing managers and negotiators. Their customers are bankers and investors. A good financial manager listens to customers and sells them good products at high prices. A good financial manager always thinks in terms of value rather than costs or earnings. Section I goes over the basics of financial analysis, i.
We are amazed at the extent to which large numbers of investors neglected this approach during the latest stockmarket euphoria. When share prices everywhere are rising, why stick to a rigorous approach? For one thing, to avoid being caught in the crash that inevitably follows.
Return to reason has also return financial analysis to its rightful place as a cornerstone of economic decision-making. Next you must master the basic techniques of accounting, including accounting principles, consolidation techniques and certain complexities Chapters 6—7 , based on international IFRS standards now mandatory in over 80 countries, including the EU for listed companies , Australia, South Africa and accepted by the SEC for US listing.
In order to make things easier for the newcomer to finance, we have structured the presentation of financial analysis itself around its guiding principle: in the long run, a company can survive only if it is solvent and creates value for its shareholders. To do so, it must generate wealth Chapters 9 and 10 , invest Chapter 11 , finance its investments Chapter 12 and generate a sufficient return Chapter The illustrative financial analysis of the Italian appliance manufacturer Indesit will guide you throughout this section of the book.
Section II reviews the basic theoretical knowledge you will need to make an assessment of the value of the firm. Here again, the emphasis is on reasoning, which in many cases will become automatic Chapters 15—19 : efficient capital markets, the time value of money, the price of risk, volatility, arbitrage, return, portfolio theory, present value and future value, market risk, beta, etc.
Then we review the major types of financial securities: equity, debt and options, for the purposes of valuation, along with the techniques for issuing and placing them Chapters 20— The central section, the third one, is devoted to value, to its theoretical foundations and to its computation.
Value is the focus of any financier, bothits measure and the way it is shared. Over the medium term, creating value, is most of the time, the first aim of managers Chapters 26 — Such decisions include choosing a capital structure, investment decisions, cost of capital, dividend policy, share repurchases, capital increases, hybrid security issues, etc.
We have devoted considerable space to the use of options as a technique or a type of reasoning in each financial decision Chapters 32— Suggestions for the reader To make sure that you get the most out of your book, each chapter ends with a summary, a series of problems and questions a total of , with the solutions provided.
For those interested in exploring the topics in greater depth, there is an end-of-chapter bibliography and suggestions for further reading, covering fundamental research papers, articles in the press, published books and web sites. A large number of graphs and tables over ! Finally, there is a fully comprehensive index. The masculine pronoun has been used throughout this book simply for convenience and brevity. This use is not intended to be discriminatory in any way.
An Internet site with huge and diversified content Vernimmen. There is a letterbox for your questions to the authors we reply within 72 hours, unless of course you manage to stump us! There are questions and answers and much more. The site has its own internal search engine, and new services are added regularly.
The Internet site is already visited by over unique visitors a day. It contains: A conceptual look at a topical corporate finance problem e. Four mistakes to be avoided at all costs when financing a start-up Statistics and tables that you are likely to find useful in the day-to-day practice of corporate finance e. A critical review of a financial research paper with a concrete dimension e. Access to equity markets: a tool for growth and innovation. A question left on the vernimmen.
How to take into account customer risk when choosing an investment. Subscribe to Vernimmen. And lastly a Facebook page We publish daily comments on financial news that we deem to be of interest, answer questions from web-users and publish finance- and business-related quotes.
Since then the different versions have accompanied me throughout my career and throughout the world. Not only was the alignment of the successive editions looking good in my different offices but I must confess I have opened and cherished each of them. Whether an investment banker, a CFO in a universal bank or more simply a world banker…" Bertrand Badre, Former Managing Director and CFO of the World Bank "What sets the Vernimmen apart from other textbooks is its integration of practice and current affairs in a rigorous theoretical framework.
Recipes and pontification are replaced by a scientific approach. And, thanks to the Newsletter, this is done practically in real time! The site is well designed, always up-to-date and also extremely useful for explaining financial concepts simply and intelligently to non-financial colleagues.
The book is a written manual for finance, explaining the fundamentals in a very thought provoking way, making it intriguing to delve into the complexities. This book is a must have in your personal library as you will refer back to it even after years. I used it in my classes, looked back into it during my internships, use it again now to deep dive into corporate finance for my thesis and know I will keep interacting with it later in my career.
Its coverage of the market aspects of corporate finance distinguishes its content, but its treatment of all the material makes it essential reading for the student, financier or industrialist. The exposition is clear and concise and, most importantly, relies on commonsense reasoning throughout.
This is not a book with obscure formulae, yet is still rigorous and at the same time a model of clarity. After having spent just a few weekends reading it, I felt better equipped for my role in financial management at Paribas.
Now at Apax, the Vernimmen remains my companion in my search for value creation key in the private equity industry.
The book is 47 chapters about 1 pages full of corporate finance. I have to agree with the authors: "It is a book in which theory and practice are constantly set off against each other …" I really like it.
Especially the emphasis not so much on techniques "which tend to shift and change over time". Very well done! Moreover, the authors also put out a monthly newsletter and have a web site that could stand alone as one of the best in the business. Check it out! The multi-country content of the "Corporate Finance: Theory and Practice" book makes it my preferred companion as I work in a cross-border environment.
Its international focus is the perfect complement to my multicultural experience. I read it again in my thirties to review some of the key Finance challenges I was facing in my professional life and I am now, in my forties, reviewing it another time to compare the reality I have to face now in Asia, with the most advanced financial concepts.
I have never been disappointed and have always been able to find the appropriate answer to my questions, as well as food for thought… Vernimmen is not another book on Finance: this is Finance as a life experiment.
It is an outstanding and unique blend of the theory and the practice, European flavour and world perspective, and traditional topics and emerging themes. Above all, the book is an excellent manual for teachers, students, and corporate managers. Bang Dang Nguyen, Lecturer of Finance, Judge Business School University of Cambridge As a business student, I appreciated this book for being both exhaustive with almost 1, pages and easy to digest. The strengths of this book are its conversational writing style and emphasis on practical problem solving.
Plus the authors make theory come alive with the use of concrete examples with real companies. This book was a fine introduction to corporate finance and continues to be a useful reference for me. Hock Kim Teh, Independent consultant, Singapore "The understanding of Corporate Finance is a key issue to successfully manage a company.
The "Vernimmen", written for Europeans by Europeans is a most useful reference for the student as well as the practitioner. The style of the book is concise, yet every conceivable aspect of Corporate Finance is covered. Complemented by an exhaustive website containing summaries of key concepts, of formulae, and of financial statements of a wide range of companies, the "Vernimmen" is a must.
It is obvious that the authors are passionate about finance, and their enthusiasm is contagious. Written in an easy and accessible style, this book deserves to become a reference work.
The French-language versions of the "Vernimmen" have been for me one of the most helpful and trusted companions throughout my professional career. I have known this excellent book for many years, which all professionals can easily use when they need to go back to the basics of modern corporate finance.
Smartly written, thorough, lively, regularly updated. I strongly recommend it to every one: from the beginner in Finance to high level experts. Learning with Vernimmen is a real pleasure. I would recommend this book to those who want to succeed in in-house and external consulting world as well as in the corporate finance area.
The Vernimmen is a true bible of corporate finance. With regular updates through their monthly newsletter and upgrades, the authors have made it applicable to any place, any time. This is pretty unique in the field.
Summaries of Vernimmen chapters
Corporate Finance : Theory and Practice