Financial Management looks formula-heavy, but almost everything in the paper grows out of a handful of ideas about money, time and risk.
Time value of money
A rupee today is worth more than a rupee next year, because today's rupee can earn. Discounting simply converts future amounts into today's terms so they can be compared fairly. Every capital budgeting technique rests on this.
Capital budgeting
Payback asks how quickly you get your money back. NPV asks whether the project adds value after accounting for the cost of money. IRR asks what return the project itself earns. Knowing what each question means matters more than the arithmetic.
Cost of capital
Money is never free. The weighted average cost of capital blends the cost of debt and equity into the single hurdle rate a project must beat.
Working capital
Profitable businesses still fail when cash is stuck in inventory and receivables. Working capital management is about keeping the operating cycle short enough to stay solvent.
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