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Book Description

Based on a popular class taught by a Harvard Business School professor.

If you're not a numbers person, then finance can be intimidating and easy to ignore. But if you want to advance in your career, you'll need to make smart financial decisions and develop the confidence to clearly communicate those decisions to others.

In How Finance Works, Mihir Desai--a professor at Harvard Business School and author of The Wisdom of Finance--guides you into the complex but endlessly fascinating world of finance, demystifying it in the process.

Through entertaining case studies, interactive exercises, full-color visuals, and a conversational style that belies the topic, Professor Desai tackles a broad range of topics that will give you the knowledge and skills you need to finally understand how finance works. These include:

  • How different financial levers can affect a company's performance
  • The different ways in which companies fund their operations and investments
  • Why finance is more concerned with cash flow than profits
  • How value is created, measured, and maximized
  • The importance of capital markets in helping companies grow

Whether you're a student or a manager, an aspiring CFO or an entrepreneur, How Finance Works is the colorful and interactive guide you need to help you start thinking more deeply about the numbers.

Table of Contents

  1. Praise
  2. Title Page
  3. Copyright
  4. Dedication
  5. Contents
  6. Introduction
  7. Chapter 1. Financial Analysis: Using ratios to analyze performance—all while playing a game
  8. Chapter 2. The Finance Perspective: Why finance is obsessed with cash and the future
  9. Chapter 3. The Financial Ecosystem: Understanding the who, why, and how of capital markets
  10. Chapter 4. Sources of Value Creation: Risk, costly capital, and the origins of value
  11. Chapter 5. The Art and Science of Valuation: How to value a home, an education, a project, or a company
  12. Chapter 6. Capital Allocation: How to make the most important decisions facing CEOs and CFOs
  13. Conclusion
  14. Answers
  15. Glossary
  16. Notes
  17. Index
  18. Acknowledgments
  19. About the Author