Book Review
Dr. Paresh Shah (2010)
Financial Management
Biztantra, New Delhi
Price: Rs.449/- Pages: 1172

The book ‘Financial Management’ written by Dr. Paresh Shah, is the second edition on Financial Management, published under Biztantra and is perfect blend of system and clarity. It is designed and written in easy to understand manner.

The book starts with introduction to Financial Management where all the financial matters and the matters relating to business organization and organizational structure are considered. Any individual from non finance background can make a base by reading introductory part of this book. After reviewing both the edition of his book it was found that this edition has included various contemporary research issues such as ALM (Asset Liability Management), Credit rating, Microfinance and corporate restructuring. These issues are becoming very important in today’s economic environment. All those aspects are explained through real-life case studies which help in clear understanding of practical aspects of such issues.

The book attracts all types of readers i.e. finance as well as non finance. Non finance readers are recommended this book to understand the basics of financial system and management and finance readers can refer this book to utilize the real life case studies which are developed to cater the need of understanding practical issues involved in financial market.

The book is divided into VI parts:

Part I: Fundamental concepts of financial management – This part consist of introduction to Financial Management, Financial system, Time value of money, Valuation of Securities, Risk and Return and Financial Planning.

Part II: Long Term Investment Decision: This part of the book explain various long term investment decisions such as capital budgeting and risk in investment decisions and the cost related to such decisions. All these aspects of long term investment decision help the reader to analyze risk and return of long term investment.

Part III: Working Capital Management: Part III explains liquidity management of business through receivables, cash and inventory management. Liquidity management is very important function of every business as this helps the planning department to decide whether to go for short term financing or long term financing.

Part IV: Financing and Dividend Decision: For deciding dividend payout it is important to know the capital structure of the business thus Part IV starts with sources of funds and accordingly leverages, capitalization and capital structure is explained and finally based on all these aspects dividend policy is developed.

Part V: Financial Analysis, Planning and Forecasting: Analysis of fundamentals of any company helps in evaluating the firm performance which in results facilitate planning and forecasting. Thus part V covers analysis of fundamentals of the company.

Part VI: Special Topics in Financial Management: The attraction of this book is not only the general financial topics it covers but the topics of special nature such as International business finance, corporate risk management, options and contemporary issue are also important considerations of the book.

Student’s CD which contain solutions for unsolved exercises given at the end of each chapter and the ratio analysis excel based template of Automobile sector, Conglomerate sector, telecommunication and Pharmaceuticals sector are provided with the book which facilitate students in evaluating their understanding of the topics. Teachers can also have same advantage from Tutor CD which is designed to facilitate teaching methods. Tutor CD include Power point slides, solutions for conceptual cases, business application cases and solution to the unsolved exercises.

The exercises and examples are designed with the help of various recognized bodies and individuals such as Global Tele systems Ltd, Satyam Computers Ltd, ICICI Bank, HDFC Bank, M/s Blue star Infotech Ltd, Ranbaxy Laboratories, Allahabad Bank etc and numbers of professors and senior level executive of academics and professional bodies. 

Critique

Dr. Paresh Shah is an accredited Management teacher and thus the expectations from his book are more. Since the book is on financial management, readers such as professors and scholars expects more apart from general topics of financial management such as accounting aspects of Corporate social responsibility, Islamic Finance and Mergers & Acquisitions etc. The topics which are included in contemporary research issues are explained for basic level of understanding and thus may not be useful for finance professionals. But understanding the basics of such issues, the clarity is excellent.

All the cases are excellent narration and not made only for academicians and can be used by corporate executives too. The best part of this book is the sources provided by author to understand all the unsolved exercises is the CDs provided with the book. Conceptual cases given after the chapters are very useful to understand the practical application of concepts explained in the book. This book is rigorous research work and can easily be seen through the kind and number of examples taken under consideration.

Shweta Verma
JJT University, Rajasthan, India
E-mail: shwetaresearch.verma@gmail.com