Preface This textbook which is an introduction to financial management provides students an understanding of the methods used for analyzing the benefits of various sources of finance. Chapter Organization The course is divided into eight chapters. Each chapter begins with lesson objectives that indicate what the students are expected to learn. The basic concepts are defined, discussed, and illustrated through examples for better comprehension. At the end of each chapter are exercises. These exercises vary from chapter to chapter and may be in the following forms: 1. Concepts - multiple choice, identification, and discrimination. 2. Short problems - multiple choice 3. Long problems Some exercises are adapted from books on financial management, management advisory services, management accounting, business finance, and other related materials by prominent local and foreign authors. These sources are included in the references to acknowledge their contributions in the making of this book. Chapter Contents The eight chapters with their respective title and summary content are as follows: 1. Introduction to Financial Management - In this chapter, the students will learn the primary goal of business, the fundamentals of financial management decisions, the functions of finance manager, and the different forms of business organizations. 2. Financial Statement Analysis - In the second chapter, the students are expected to learn the concepts and limitations of financial statements, identify ways in analyzing financial statements, interpret financial ratios, and understand the statement of cash flow. 3. Financial Forecasting - This chapter contains the planning process and the structure and preparation of the budget. 4. Financial Planning and Budgeting - This chapter discusses the basic concepts of financial planning and its processes, and differentiates the budgets used in financial planning. It illustrates the stepby-step procedures of budgeting; computes the budget for sales, inventories, and variable and fixed expenses; explains the preparation of the pro-forma cash flow statement, balance sheet, and income statement. 5. Working Capital and Cash Management - The chapter explains the concepts and the tools used in analyzing working capital, and strategies for maximizing the use of working capital and cash. 6. Receivable Management - The chapter expounds the concepts, tools, factors affecting accounts receivables, and strategies for maximizing accounts receivables. 7. Inventory Management - The chapter shows the concepts, tools and techniques, factors affecting accounts receivables, relevant costs in inventory management, and strategies to minimize inventory costs. 8. Short-term Financing - This chapter covers the concepts, the sources, and the other forms of short- term financing. Invitational Message/Concluding Statement I take pride in this textbook as the fruit of my labor after years of industry practice and experience in teaching financial management. I invite my peers in the academe whose areas of expertise are finance and accounting to share their comments and suggestions that can enrich or enhance this resource. - Ferdinand L. Timbang