Customer Reviews

Principles of Managerial Finance (10th Edition)

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I have been a fan of Lawrence J. Gitman's writing style for years. His approach to finance is simple to understand & this is very beneficial for both students & teachers. The 10th Edition of "Principles of Managerial Finance" (Hardcover) has the following improvements:

a. Calculation of "n" in the chapter of "Time Value of Money"
b. Adding the "Free Cash Flow Valuation Model" in the chapter of "Stock Valuation"
c. Adding "Strategic Net Present Value (NPV)" in the chapter of "Risk & Refinements in Capital Budgeting"
d. Having two (2) "Time Value of Money Tables":
d.1. more detailed tables (in terms of more "i"; note: "i" was formerly "k" in the 9th Edition) located at the back of the book
d.2. tables, printed on thick paper, located at the front of the book that is perforated (can be pulled out)
e. Up to date real world examples
f. Better presentation of the topics, notably the topics on Bond & Stock Valuation
g. The Hardcover Edition includes an Excel-based student software on the book's Companion Web Site valid for six (6) months upon activation.

The book comes with a CD-ROM. The exercises have topics listed before them. This is beneficial both for students & teachers (students can EASILY practice what they've learned while teachers can give assignments by simply browsing the topics).

This is an outstanding basic finance book & I haven't found another one that's better. However, outstanding as this book is, there is still room for improvement. My suggestions are:

a. Explain "deferred annuities" (both for ordinary annuity & annuity due)
b. Present the computation of "i" & "n" using algebra (in addition to using the methods presented in the book)
c. Include the process of interpolation in the book proper
d. Fully discuss the "Average Rate of Return"(ARR), "Discounted Payback Period" (DPP), & "Modified Internal Rate of Return" (MIRR) in the chapter of "Capital Budgeting Techniques"
e. Better explain the "Earnings Before Interest & Taxes (EBIT)-Earnings Per Share (EPS) Approach" in the chapter of "Capital Stucture"
f. Correct the error (I believe this to be an editing error) on the formula for standard deviation (Equation 5.3a, page 222, footnote section)
g. Include a "Challenging Exercises Section" for every chapter where the problems are more complex & the topics are NOT stated before them
h. Increase the six (6) month student subscription to the book's Companion Web Site to one (1) year.

Overall, I highly recommend this book to anyone who wants to learn basic finance. This book is well worth buying & KEEPING.

This book, "Principles of Managerial Finance" (9th Edition), is an excellent finance book. It explains financial concepts in an easy-to-understand manner. Gitman gives you a step-by-step guide to understanding finance. Gone are the days when one dreads reading a finance book because of complexity. You'll actually look forward to reading this book. However, there are some items that need to be added/fully explained in the book itself (like how to interpolate, finding the number of periods in the time value of money, calculating free cash flows in valuation, etc.) & there are things that need to be clarified in the cost of capital & capital budgeting techniques sections. Nevertheless, it is still a great book well worth buying.

Having struggled through many finance courses this text truely brought the area of finance into a much clearer perspective for me. It provides a lot of general knowledge about the field and as a stand alone text is very useful. However, the assignments that accompanied the text definitley lacked substance and did not prove to be worthwhile.