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Strategic Financial Management Casebook
- 1st Edition - October 21, 2016
- Author: Rajesh Kumar
- Language: English
- Paperback ISBN:9 7 8 - 0 - 1 2 - 8 0 5 4 7 5 - 8
- eBook ISBN:9 7 8 - 0 - 1 2 - 8 0 9 3 5 2 - 8
Strategic Financial Management Casebook strategically uses integrative case studies—cases that do not emphasize specific subjects such as capital budgeting or value based managemen… Read more
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Request a sales quoteStrategic Financial Management Casebook strategically uses integrative case studies—cases that do not emphasize specific subjects such as capital budgeting or value based management—to provide a framework for understanding strategic financial management. By featuring holistic presentations, the book puts readers into the shoes of those responsible for the world’s largest wealth creators. It covers strategies of growth, mergers and acquisitions, financial performance analysis over the past decade, wealth created in terms of stock returns since its listing in stock market, investment and financial decisions, cost of capital, and corporate valuation.
In addition, the casebook also discusses corporate restructuring activities undertaken by each company. Each chapter follows a template to facilitate learning, and each features an Excel-based case analysis worksheet that includes a complete data set for financial analysis and valuation.
- Introduces a conceptual framework for integrating strategy and finance for value creation
- Emphasizes the roles of corporate governance, corporate social responsibility, and risk management in value creation
- Encourages an analysis of investment, financing, and dividend decisions
- Examines non-financial factors that contribute to value
Upper-division undergraduates, graduate students, and professionals working in corporate finance, international financial management, financial economics, industrial organization, business administration, and business economics
- Dedication
- Preface
- Acknowledgment
- 1. Perspectives on strategic finance
- Abstract
- 1.1 Strategic role of finance
- 1.2 Managing risk
- 1.3 Challenges
- 1.4 Strategic financial planning
- 1.5 Value-based management
- 1.6 Significance of shared value
- 1.7 Innovation and value creation
- 1.8 Role of technology
- 1.9 Behavioral finance
- 1.10 Corporate restructuring
- 1.11 Value creation through financing
- 1.12 Real options strategy
- 1.13 IPO strategy
- 1.14 Risk management
- 1.15 New valuation tools
- 1.16 The balanced score card
- 1.17 Governance and ethics
- 1.18 Corporate social responsibility
- References
- Further reading
- 2. Wealth creation by Coca-Cola—a strategic perspective
- Abstract
- 2.1 Introduction
- 2.2 Growth strategies
- 2.3 Challenges
- 2.4 Corporate social responsibility activities
- 2.5 Ownership structure
- 2.6 Stakeholder engagement, business ethics, and governance
- 2.7 Financial highlights
- 2.8 Debt financing
- 2.9 Dividend decision
- 2.10 Risk management
- 2.11 Trend analysis
- 2.12 Stock wealth creation
- 2.13 Valuation
- 2.14 Relative valuation
- Further reading
- 3. Wealth creation by Johnson & Johnson
- Abstract
- 3.1 Introduction
- 3.2 Organization structure of J&J
- 3.3 Strategic pursuits of J&J
- 3.4 Strategic collaborations
- 3.5 Sustainability initiatives
- 3.6 Corporate governance
- 3.7 Corporate restructuring activities—acquisitions
- 3.8 Share buyback
- 3.9 Risk management
- 3.10 Stock compensation
- 3.11 Risk factors
- 3.12 Ownership structure
- 3.13 Financial highlights
- 3.14 Trend analysis
- 3.15 Ratio analysis
- 3.16 Estimation of WACC
- 3.17 Shareholder wealth analysis
- 3.18 Valuation perspectives
- 3.19 Performance indicator analysis
- 4. Wealth creation by Microsoft
- Abstract
- 4.1 Introduction
- 4.2 Operating segments
- 4.3 Mergers and acquisitions strategy
- 4.4 Corporate governance
- 4.5 Citizen initiatives
- 4.6 Risk management
- 4.7 Licensing options
- 4.8 Challenges from competitors
- 4.9 Patent claims and litigation issues
- 4.10 Equity ownership
- 4.11 Operational highlights segment wise
- 4.12 Share repurchases
- 4.13 Stock option plans
- 4.14 Microsoft dividends
- 4.15 Microsoft stock splits
- 4.16 Trend analysis
- 4.17 Ratio analysis
- 4.18 Stock wealth analysis
- 4.19 Estimation of weighted average cost of capital (WACC)
- 4.20 Valuation perspectives
- 4.21 Performance indicator analysis
- Further reading
- 5. Wealth creation by Exxon Mobil
- Abstract
- 5.1 Introduction
- 5.2 Economic scenario
- 5.3 Business operations
- 5.4 Strategy of growth of Exxon Mobil
- 5.5 Corporate governance
- 5.6 CSR activities
- 5.7 Mergers and acquisitions
- 5.8 Acquisition of XTO energy
- 5.9 Operational statistics
- 5.10 Ownership details
- 5.11 Wealth creation by Exxon Mobil
- 5.12 Operating performance analysis
- 5.13 Valuation of Exxon Mobil
- 5.14 Estimation of growth rate of net income from fundamentals
- 5.15 Relative valuation of Exxon Mobil
- Appendix Supplementary material
- Further reading
- 6. Wealth creation—A case analysis of Apple
- Abstract
- 6.1 Introduction
- 6.2 Growth strategy of Apple
- 6.3 Mergers and acquisitions strategy
- 6.4 Products and services
- 6.5 Risk factors
- 6.6 Ownership structure
- 6.7 Stock wealth creation
- 6.8 Dividend policy of Apple
- 6.9 Share buyback scheme
- 6.10 ESOP program
- 6.11 Financial analysis
- 6.12 Ratio analysis
- 6.13 Valuation of Apple using FCFF model
- 6.14 Relative valuation
- Further reading
- 7. Wealth creation—analysis of Google
- Abstract
- 7.1 Introduction
- 7.2 Ownership and capital structure
- 7.3 Stock details
- 7.4 Main products and services of Google
- 7.5 Strategies of growth
- 7.6 Challenges
- 7.7 Mergers and Acquisitions strategy
- 7.8 Google IPO
- 7.9 Financial analysis
- 7.10 Ratio analysis
- 7.11 Stock wealth creation
- 7.12 Valuation using Free Cash Flow to Firm (FCFF) model
- 7.13 Relative valuation
- Further reading
- 8. Wealth analysis of General Electric
- Abstract
- 8.1 Introduction
- 8.2 Segment operations
- 8.3 Strategy
- 8.4 GE Capital exit plan
- 8.5 Financial restructuring and exchange offers
- 8.6 Competitive challenges
- 8.7 GE’s ecomagination strategy
- 8.8 GE’s acquisition strategy
- 8.9 Alstom acquisition
- 8.10 Governance
- 8.11 Healthymagination
- 8.12 Risk management
- 8.13 Ownership structure
- 8.14 Authorized shares
- 8.15 Dividends
- 8.16 Share repurchase
- 8.17 Stock options
- 8.18 Financial resources and charges
- 8.19 Investments
- 8.20 Operational highlights
- 8.21 Financial highlights
- 8.22 Ratio analysis
- 8.23 Stock wealth analysis
- 8.24 Estimation of cost of capital
- 8.25 Valuation
- 8.26 Discounted cash flow valuation
- 8.27 Noncash working capital
- 8.28 Performance indicator analysis
- 8.29 Piotroski score
- 8.30 Graham number
- Further reading
- 9. Strategies of wealth creation by Berkshire Hathaway
- Abstract
- 9.1 Introduction
- 9.2 Business segments
- 9.3 Growth of Berkshire Hathaway—Strategic perspective
- 9.4 Equity Investments
- 9.5 Restructuring—Mergers and acquisitions
- 9.6 Corporate governance
- 9.7 Equity share holding
- 9.8 Financial highlights
- 9.9 Risk management
- 9.10 Stock repurchase
- 9.11 Dividends
- 9.12 Trend analysis
- 9.13 Equity ownership
- 9.14 Wealth creation by Berkshire Hathaway
- 9.15 Estimation of cost of capital
- 9.16 Economic value
- 9.17 Equity spread
- 9.18 Free cash flow valuation
- 9.19 Relative valuation
- Further reading
- 10. Analysis of wealth—Walmart
- Abstract
- 10.1 Introduction
- 10.2 Milestones of Walmart
- 10.3 Business segments
- 10.4 Strategy
- 10.5 Challenges
- 10.6 Sustainability activities
- 10.7 Acquisitions
- 10.8 Governance
- 10.9 Risk management
- 10.10 Borrowings
- 10.11 Walmart shares
- 10.12 Dividends
- 10.13 Stock splits
- 10.14 Share repurchase
- 10.15 Operational highlights
- 10.16 Financial highlights
- 10.17 Ratio analysis
- 10.18 Ownership characteristics
- 10.19 Wealth creation by Walmart
- 10.20 Estimation of WACC
- 10.21 Valuation of Walmart
- 10.22 Estimation of value of Walmart using Free Cash Flow to Equity (FCFE)
- 10.23 Valuation using FCFF model
- 10.24 Relative valuation
- 10.25 Performance indicators
- 10.26 Piotroski score
- 10.27 Graham number
- Further reading
- 11. Wealth analysis of Facebook
- Abstract
- 11.1 Introduction
- 11.2 Products
- 11.3 Strategy
- 11.4 Competition
- 11.5 Acquisitions
- 11.6 Stock ownership
- 11.7 Facebook IPO
- 11.8 Stock option plans
- 11.9 Trends in key metrics
- 11.10 Investments
- 11.11 Risk management
- 11.12 Debt financing
- 11.13 Corporate governance
- 11.14 Ownership structure
- 11.15 Ratio analysis
- 11.16 Shareholder wealth analysis of Facebook
- 11.17 Estimation of cost of capital
- 11.18 Valuation perspectives
- 11.19 Peer comparison
- 11.20 Relative valuation
- 11.21 Performance indicators
- 12. Wealth analysis of Procter and Gamble
- Abstract
- 12.1 Introduction
- 12.2 Organizational structure
- 12.3 Restructuring by P&G
- 12.4 Strategy for growth
- 12.5 Corporate governance
- 12.6 Sustainability initiatives
- 12.7 Dividends and stock splits
- 12.8 Long term debt
- 12.9 Risks and challenges
- 12.10 Risk management
- 12.11 Employee benefit plans
- 12.12 Ownership
- 12.13 Financial highlights
- 12.14 Ratio analysis
- 12.15 Estimation of Weighted Average Cost of Capital (WACC)
- 12.16 Estimation of WACC
- 12.17 Valuation perspectives
- 12.18 Performance indicators
- 13. Wealth analysis of Wells Fargo
- Abstract
- 13.1 Introduction
- 13.2 Business divisions
- 13.3 Growth strategy of Wells Fargo
- 13.4 Mergers and acquisitions by Wells Fargo
- 13.5 Corporate governance
- 13.6 Sustainability initiatives
- 13.7 CSR initiatives
- 13.8 Investment securities
- 13.9 Risk management
- 13.10 Capital management
- 13.11 Stock plans
- 13.12 Dividends
- 13.13 Ownership
- 13.14 Ratio analysis
- 13.15 Stock wealth analysis
- 13.16 Estimation of cost of capital
- 13.17 Valuation perspectives
- 14. Wealth creation by Amazon
- Abstract
- 14.1 Introduction
- 14.2 Business segments
- 14.3 Growth strategy of Amazon
- 14.4 Innovation strategy
- 14.5 Acquisitions by Amazon.com
- 14.6 Risk factors
- 14.7 Corporate Governance
- 14.8 Sustainability initiatives
- 14.9 Stock
- 14.10 Stock compensation plans
- 14.11 Stock ownership
- 14.12 Trend analysis
- 14.13 Ratio analysis
- 14.14 Stock performance analysis
- 14.15 Stock wealth analysis
- 14.16 Estimation of cost of capital
- 14.17 Valuation perspectives
- 14.18 Equity spread
- 14.19 Discounted cash flow valuation—FCFF model
- 14.20 Free cash flow model
- 14.21 Relative valuation
- 14.22 Performance indicators
- 14.23 Piotroski score
- 14.24 Graham number
- 14.25 Peter Lynch Fair valuation
- 15. Wealth analysis of AT&T
- Abstract
- 15.1 Introduction
- 15.2 Business segments
- 15.3 Strategy of growth
- 15.4 Corporate Governance at AT&T
- 15.5 Citizenship and sustainability initiatives
- 15.6 Risk management
- 15.7 Financing activities
- 15.8 Retirement and ownership plans
- 15.9 Equity repurchase program
- 15.10 Stock split and dividends
- 15.11 Ownership structure
- 15.12 Segmental operational and financial highlights
- 15.13 Financial trend analysis
- 15.14 Ratio analysis
- 15.15 Estimation of cost of capital
- 15.16 Valuation perspectives
- 15.17 Stock wealth analysis
- 16. Wealth creation by Boeing
- Abstract
- 16.1 Introduction
- 16.2 Business segments
- 16.3 Strategy of growth
- 16.4 Regulations
- 16.5 Mergers and acquisitions
- 16.6 Strategic collaborations
- 16.7 Corporate Governance
- 16.8 Risk management
- 16.9 Research and development
- 16.10 Citizenship initiatives
- 16.11 Dividends & share repurchases
- 16.12 Financing resources
- 16.13 Pension plans
- 16.14 Share-based compensation plan
- 16.15 Ownership
- 16.16 Operational highlights
- 16.17 Financial highlights: trend analysis
- 16.18 Ratio analysis
- 16.19 Stock wealth analysis
- 16.20 Estimation of cost of capital
- 16.21 Valuation perspectives
- 16.22 Equity spread
- 16.23 Dividend discount model valuation
- 16.24 FCFE valuation model
- 16.25 FCFF valuation
- 16.26 Peer comparison and relative valuation
- 16.27 Performance indicators
- 16.28 Piotroski score
- 16.29 Graham number
- 16.30 Peter Lynch valuation
- 17. Analysis of wealth—Time Warner Inc.
- Abstract
- 17.1 Introduction
- 17.2 Business segments
- 17.3 Growth strategy
- 17.4 Corporate restructuring by Time Warner
- 17.5 Strategic investments
- 17.6 Stock split
- 17.7 Dividend trends
- 17.8 Ownership structure
- 17.9 Corporate governance
- 17.10 Corporate social responsibility activities
- 17.11 Debt financing
- 17.12 Dividends and share repurchases
- 17.13 Equity shares
- 17.14 Equity compensation plans
- 17.15 Revenue highlights
- 17.16 Financial trend analysis
- 17.17 Ratio analysis
- 17.18 Stock wealth analysis
- 17.19 Estimation of cost of capital
- 17.20 Valuation perspectives
- 17.21 Peer comparison and relative valuation
- 17.22 Performance indicators
- Index
- No. of pages: 604
- Language: English
- Edition: 1
- Published: October 21, 2016
- Imprint: Academic Press
- Paperback ISBN: 9780128054758
- eBook ISBN: 9780128093528
RK
Rajesh Kumar
Dr. B. Rajesh Kumar is Professor of Finance at the Institute of Management Technology, Dubai International Academy City, UAE. He earned his PhD in Management from the Indian Institute of Technology, IIT Kharagpur. He has published over 40 empirical research papers in refereed international journals and is the author of six books. His co-authored research works have been cited in the popular financial press, such as The Financial Times, Money Week and The Economist.
He has published three books with Elsevier/Academic Press including the recently published Strategic Financial Management Casebook that strategically uses integrative case studies-cases that do not emphasize specific subjects such as capital budgeting or value based management-to provide a framework for understanding strategic financial management. His earlier book, Strategies of Banks and Other Financial Institutions, presents a comprehensive portrait of financial institutions worldwide by balancing their theories of strategy and risk structure with detailed case studies. His book on Valuation Theories and Concepts, offer a broader more holistic perspective on valuation suited to companies and markets worldwide.
Affiliations and expertise
Professor of Finance at the Institute of Management Technology, Dubai International Academy City, UAERead Strategic Financial Management Casebook on ScienceDirect