Taxmann's Fundamentals of Financial Management book by R.P. Rustagi

Fundamentals of Financial Management is a comprehensive and authentic textbook that thoroughly explains financial management's core principles, theories, and practices. Tailored in accordance with the National Education Policy (NEP), it integrates conceptual clarity with practical applications—particularly using Excel—making it a helpful resource for understanding financial decision-making in a dynamic business environment. The text blends theoretical frameworks with practical illustrations, solved examples, and step-by-step guidance, offering a solid foundation in all critical aspects of financial management.

This book is intended for the following audience:

• Undergraduate Students – Ideal for B.Com. (Hons.) and other commerce and management degree programs, including open and distance learning courses in various central universities across India
• Educators & Instructors – It is a reliable reference tool and textbook for teaching fundamental finance concepts, with a clear structure to facilitate lectures, discussions, and assessments
• Finance Enthusiasts & Professionals – Although primarily aimed at undergraduates, the book's lucid explanations, practical examples, and Excel tutorials make it relevant for professionals looking to reinforce or refresh their knowledge in corporate finance, capital budgeting, and working capital management

The Present Publication is the 20^th Edition, authored by Dr R.P. Rustagi, with the following noteworthy features:

• [National Education Policy (NEP) Aligned] Offers curriculum-driven content that reflects the latest educational guidelines and competency-based learning approaches
• [Excel Integration] Demonstrates financial decision-making through hands-on Excel examples, equipping readers with practical, technical skills
• [Concise Synopses & Points to Remember] Each chapter begins with a brief overview (synopsis) and concludes with a recap of essential concepts
• [University Exam-oriented] Incorporates questions from past university examinations, multiple-choice questions (MCQs), and typical theoretical and numerical questions, helping students prepare more effectively
• [Abundant Solved Illustrations] Features numerous graded problems and examples, illustrating key finance concepts and techniques step-by-step
• [Systematic Coverage] Covers everything from basic financial management concepts to complex capital budgeting, financing decisions, dividend policy, and working capital management
• [Author's Background] Written by Dr R.P. Rustagi, a distinguished academician with over four decades of teaching finance and accounting at Shri Ram College of Commerce, University of Delhi. His expertise ensures the book's content remains both scholarly and practical
• [Practical Pedagogy] The chapters are designed to facilitate classroom learning, self-study, and exam preparation, making this book a one-stop resource for both theory and practice in financial management

The coverage of the book is as follows:

• Introduction to Financial Management
  • Lays out basic financial concepts, functions, goals, and the time value of money, underscoring risk and return considerations
• Capital Budgeting
  • Explores the significance of long-term investment decisions, outlines various capital budgeting methods (Payback, NPV, IRR, MIRR, PI), and explains risk analysis
• Cost of Capital & Financing Decisions
  • Details how to compute the cost of different sources of capital—debt, equity, preference shares—along with weighted average cost of capital (WACC). Examines leverage analysis, EBIT–EPS relationships, and theories of capital structure
• Dividend Decisions
  • Discusses the relevance and irrelevance theories of dividend policy (Walter, Gordon, Modigliani-Miller), along with models for determining dividend payouts
• Working Capital Management
  • Provides a framework to manage current assets efficiently, including planning and forecasting techniques for cash, receivables, and inventory
• Valuation of Securities
  • Covers bond valuation, preference and equity share valuation, yield to maturity, and other essential valuation concepts
• Excel Applications
  • An appendix provides step-by-step guidance on applying Excel to solve financial management problems, making computations more accurate and efficient

The book is organised into six parts, each focusing on a core area of financial management:

• Part I | Background
  • Chapter 1 – Financial Management—An Introduction
  • Chapter 2 – The Mathematics of Finance (Time Value of Money)
• Part II | Long-Term Investment Decisions (Capital Budgeting)
  • Chapter 3 – Capital Budgeting—An Introduction
  • Chapter 4 – Techniques of Capital Budgeting Evaluation
• Part III | Financing Decision
  • Chapter 5 – Cost of Capital
  • Chapter 6 – Leverage Analysis
  • Chapter 7 – EBIT–EPS Analysis
  • Chapter 8 – Leverage, Cost of Capital, and Value of the Firm
  • Chapter 9 – Capital Structure—Planning and Designing
• Part IV | Dividend Decision
  • Chapter 10 – Dividend Decision and Valuation of the Firm
  • Chapter 11 – Dividend Policy—Determinants and Constraints
• Part V | Management of Current Assets
  • Chapter 12 – Working Capital—Planning and Management
  • Chapter 13 – Estimation and Calculation of Working Capital
  • Chapter 14 – Management of Cash and Marketable Securities
  • Chapter 15 – Receivables Management
  • Chapter 16 – Inventory Management
• Part VI | Valuation
  • Chapter 17 – Valuation of Securities
• Following these chapters are appendices that include:
  • Appendix I – Excel-based financial decision-making examples
  • Appendix II – Past University Examination Papers with suggested solutions
  • Appendix III – Useful Mathematical Tables
• Each chapter includes:
  • Synopsis of key objectives
  • Detailed explanations of concepts
  • Points to Remember for quick revision
  • Solved Graded Illustrations
  • MCQs & Objective Type Questions
  • Assignments & Practical Problems for hands-on practice