This bibliography provides essential resources for both admission preparation and course success in finance studies. It includes foundational textbooks on corporate finance and investments, as well as recommended readings on key financial ratios and other course materials.
Table of Contents
Admission bibliography
Corporate Finance (3rd Edition) (Pearson Series in Finance) Jonathan Berk, Peter DeMarzo
- Introduction to Financial Statement Analysis (pages 21-58):
- The disclosure of financial information;
- The balance-sheet, the income statement;
- The statement of cash-flows;
- Other financial statement information;
- Accounting manipulation.
- Time Value of Money (pages 96-140):
- The timeline;
- The three rules of time travel;
- The power of compounding;
- Valuing the stream of cash-flows;
- The net present value of a stream of cash-flows;
- Perpetuities, annuities and other special cases;
- Solving for variables other than present value or future value.
- Interest Rates (pages 141-167):
- Interest rate quotes and adjustments;
- The determinants of interest rate;
- Risk and taxes;
- The opportunity cost of capital.
- Estimating the Cost of Capital (pages 400-436):
- Equity cost of capital;
- Beta estimation;
- The market portfolio;
- The debt cost of capital;
- Project’s cost of capital;
- Project risk characteristics and financing;
- Using the cost of capital.
- Capital Structure and Pay-out Policy (pages 478-506 & 584-611):
- Equity versus debt financing;
- Modigliani-Miller I and II;
- Capital structure fallacies;
- MM: beyond the propositions;
- Distributions to shareholders;
- Comparison of dividends and share repurchase;
- The tax disadvantage of dividends;
- Payout versus retention of cash;
- Signaling with Payout policy.
Essentials of Investments, 6th Edition Zvi Bodie, Alex Kane, Alan J. Marcus
- Introduction to Financial Markets:
- Financial securities (pages 4-6)
- Financial markets (pages 6-17)
- Mean Variance Portoflio Theory (pages 127-134):
- The characteristics of the opportunity set under risk
- Security Analysis and Portoflio Theory
- The efficient market hypothesis (pages 243-247)
- Equity valuation and trading (pages 40-42 & 59-70 & 388-403)
- Trading on margin (pages 80-85)
- Fixed income securities. bond trading, duration and convexity (pages 32-39 & 277-294 & 320-329 & 337-340)
- Financial options and their characteristics (pages 467-475 & 504-506)
- Financial futures and their uses (pages 538-556)
Financial Statements
- Balance Sheet: Financial position at a specific point in time
- Assets = Liabilities + Stockholders’ Equity
- Assets are resources owned company, split into current and non-current assets (like property and equipment).
- Liabilities are the company’s obligations, split into current and long-term liabilities (due beyond a year).
- Stockholders’ Equity is the owners’ claim on the company’s assets.
- Income Statement: Financial performance over a period of time
- Revenues (Top Line) is the income generated from the primary activities of the company (such as selling products or services).
- Expenses are the costs incurred in earning revenue (cost of goods sold, operating expenses, interest, taxes)
- Net income (Bottom line) is the profit remaining after all expenses are substracted from the revenue.
- Cash Flow Statement: Tracks cash inflows and outflows over a period, highlighting liquidity and cash management.
- Operating activities are cash flows from core business activities (Sales of goods or services, payments to suppliers, salaries)
- Investing activities are cash flows related to the acquisition and disposal of long-term assets (equipment, investment)
- Financing activities are cash flows related to debt, equity and dividends.
- Compounding: The process of growing an investment reinvesting the interest earned
- Net Present Value (NPV): The value of a series of cash flows discounted back to their present value
- Perpetuity: A type of annuity that pays a fixed amount of cash flow indefinitely
- Interest Rate: The cost of borrowing money
- Cost of Capital: The return required investors
- Equity Cost of Capital: The return required shareholders
- Capital Structure: The mix of a firm’s debt and equity financing
- Modigliani-Miller Theorem: Under certain assumptions, a firm’s value is unaffected its capital structure.
- Payout Policy: A company’s strategy for distributing profits to shareholders
Key Financial Ratios
- Profitability Ratios
- Gross Margin: Gross Profit / Sales
- Operating Margin: Operating Income / Sales
- EBIT Margin: EBIT / Sales
- Net Income Margin: Net Income / Sales
- Liquidity Ratios
- Current Ratio: Current Assets / Current Liabilities
- Quick Ratio: (Cash & Short-term Investments + Accounts Receivable) / Current Liabilities
- Cash Ratio: Cash / Current Liabilities
- Working Capital Ratios
- Accounts Receivable Days: Accounts Receivable / Average Daily Sales
- Accounts Payable Days: Accounts Payable / Average Daily Cost of Sales
- Inventory Days: Inventory / Average Daily Cost of Sales
- Accounts Receivable Turnover: Annual Sales / Accounts Receivable
- Accounts Payable Turnover: Annual Cost of Sales / Accounts Payable
- Inventory Turnover: Annual Cost of Sales / Inventory
- Interest Coverage Ratios
- EBIT/Interest Coverage: EBIT / Interest Expense
- EBITDA/Interest Coverage: EBITDA / Interest Expense
- Leverage Ratios
- Debt-Equity Ratio: Total Debt / Book (or Market) Value of Equity
- Debt-to-Capital Ratio: Total Debt / (Total Equity + Total Debt)
- Debt-to-Enterprise Value Ratio: Net Debt / Enterprise Value
- Equity Multiplier (book): Total Assets / Book Value of Equity
- Equity Multiplier (market): Enterprise Value / Market Value of Equity
- Valuation Ratios
- Market-to-Book Ratio: Market Value of Equity / Book Value of Equity
- Price-Earnings Ratio: Share Price / Earnings per Share
- Enterprise Value Ratios: Enterprise Value / EBIT or EBITDA or Sales
- Operating Returns
- Asset Turnover: Sales / Total Assets
- Return on Equity (ROE): Net Income / Book Value of Equity
- Return on Assets (ROA): (Net Income + Interest Expense) / Book Value of Assets
- Return on Invested Capital (ROIC): (EBIT (1-Tax rate)) / (Book Value of Equity + Net Debt)
Courses bibliography
The bibliography of the courses:
- Monetary Policy, Inflation, and the Business Cycle: An Introduction to the New Keynesian Framework and Its Applications, second edition Jordi Galí (ISBN: 978-0691164786)
- Monetary Theory and Policy, fourth edition Carl E. Walsh (ISBN: 978-0262035811)
- Economics of Money, Banking and Financial Markets, The (The Pearson Series in Economics), 11th edition Frederic Mishkin (ISBN: 978-0133836790)
- User Guide: An Introduction to the Solution and Estimation of DSGE Models
- Investments ISE Alan Marcus (ISBN: 978-1266885389)
- Corporate Finance, sixth edition Jonathan Berk (ISBN: 978-1292446318)
- Introductory Econometrics for Finance, 4th edition Chris Brooks (ISBN: 978-1108436823)
- Elements of Financial Risk Management, 2nd edition Peter Christoffersen (ISBN: 978-0128102350)
- Applied Econometric Time Series, 4th edition Walter Enders (ISBN: 978-1118808566)
- Paul Wilmott on Quantitative Finance, 2nd edition Paul Wilmott (ISBN: 978-0470018705)
- Economic Analysis, eighth edition William Greene (ISBN: 978-1292231136)
- Investment Valuation, University Edition: Tools and Techniques for Determining the Value of any Asset, fourth edition Aswath Damodaran (ISBN: 978-1394262731)
- Capital Budgeting Valuation: Financial Analysis for Today’s Investment Projects H. Kent Baker (ISBN: 978-0470569504)
- Valuation: Measuring and Managing the Value of Companies, University Edition, seventh edition Tim Koller (ISBN: 978-1119611868)
- Corporate Finance ISE, thirdteenth edition Bradford Jordan (ISBN: 978-1265533199)
- Analysis for Financial Management ISE, thirdteenth edition Jennifer Koski (ISBN: 978-1265042639)
- Cost of Capital, fifth edition Shannon P. Pratt (ISBN: 978-1118555804)
- Fundamentals of Corporate Finance, thirteenth edition Stephen Ross (ISBN: 978-1260772395)