Introduction

In case you couldn’t already tell, this book is about corporate finance. If you were looking for poodle grooming, you picked up the wrong book. Go try again.

Corporate finance is the study of how groups of people work together as a single organization to provide something of value to society. If a corporation is using up more value than it’s producing, it will lose money and fail. So it’s the job of those in corporate finance to manage the organization so that resources are efficiently utilized, the most valuable projects are pursued, and the corporation can remain competitive and everyone gets to keep his job. You can do this task through a very easy process: measuring! In corporate finance, you measure value using money, and the final goal of a corporation is to make money. Why? When a corporation makes money — that is, when it’s profitable — that means it’s making sales that have more value than the things it buys; it’s adding value to society rather than sucking the world dry.

Ensuring that a corporation is financially successful is far more complicated than simply ensuring that a corporation is profitable, though. Throughout this book, I discuss a wide range of topics in corporate finance. This is an introductory book, after all, so think of it as a sampler or a greatest-hits album — it’s everything you need in order to understand what corporate finance is and how to begin functioning on a basic level in the world of finance.

About This Book

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