S. L. Tang - Construction Financial Management [eBook (PDF)]

Description

This is a textbook on construction financial management written in simple English for undergraduate students who study construction related programmes. It is also suitable for postgraduate students (as a bridging course) who know construction technology well but are less familiar with financial management. Readers, after studying this book, will have a very good understanding on income statement, balance sheet, NPV (net present value), IRR (internal rate of return), and so on. They will be able to analyze the financial statements of a company and perform the financial analysis of a project proposal. Other related topics such as break-even analysis, S-Curve and working capital financing of a project are also discussed in this book.
Content

Financial Statements – Income Statement and Balance Sheet
Introduction
Income Statement
Balance Sheet
Working Capital and Current Ratio
Under Billing and Over Billing
Worked Examples
Financial Statement Analysis of a Construction Company
Analysis of Financial Statements by Financial Ratios
Five Categories of Financial Ratios
A Case Study
Compound Interest, Net Present Value (NPV), Equivalent Annual Cost and Loan Redemption
Nominal Interest Rate and Real Interest Rate
Compound Interest Calculations
Benefit-Cost Ratio
Salvage Value and Equivalent Annual Cost
Redeeming a Loan
Principal Amortization and Interest Payment of a Loan
Internal Rate of Return (IRR) and the Differences between IRR and NPV
Net Cash Flow (NCF)
DCF Method and IRR
IRR versus NPV
IRR as Financial Indicator and NPV as Economic Indicator
Effect of Inflation
Introduction
Real IRR and Its Calculation in a World with Inflation
When Is Inflation Adjustment Considered Or Not Considered?
Concluding Remarks
Cost-Volume-Profit Analysis
Introduction
Variable Costs, Fixed Costs and Break-even Point
Graphical Presentation – Break-even Chart
Mathematical Presentation
Contribution
The Make-or-Buy Decision
Equipment Selection Decision
Engineering Scheme Choice Decision
Concluding Remarks
Financial Analysis of a Project
Introduction
Basic Method of Financial Analysis
A Case Study on Financial Analysis
S-Curve and Working Capital Financing of a Construction Project
Introduction
S-Curve
Cumulative Interim Payment Graph
The Two Graphs combined
A Worked Example
Appendix
Endnotes