The Value Method: A New Approach to Financial Management

In the ever-evolving world of finance, change is inevitable. In 2005, European firms faced a paradigm shift as they were mandated to adopt the "fair value method" for presenting financial results. This revolution in accounting practices replaces traditional methods with a forward-thinking approach that prioritizes market values. And this is just the beginning - market values are set to play an even greater role in the future.

A Shift towards Cash Flow and Risk Analysis

Gone are the days of relying solely on profit-based thinking. Today, firms, investors, analysts, and other stakeholders embrace the power of (expected) cash flows and risks. The combined analysis of these factors provides a comprehensive understanding of a firm's value or the potential of an individual investment project. Financial management practices have undergone substantial transformations due to heightened uncertainties in the financial world.

The Cash-Flow-Based Approach: A Key Focus

In our comprehensive new book, we delve into the cash-flow-based approach, which lies at the heart of contemporary financial management. Cash flow forecasts hold immense importance in this new paradigm. Good decision-making becomes impossible without accurate forecasts. As investment plans are set into motion, actual cash flow realizations are compared with forecasts, allowing for necessary adjustments. Performance measurement serves as a critical tool, enabling timely detection of negative deviations.

Exploring Essential Topics

Our book covers an array of essential topics that encompass the shift from profit-based thinking to a valuation-based approach. We delve into the operational activities of the firm, performance measurement, and the intricate relationship between operational activities and risk management. We equip readers with the knowledge they need to navigate the dynamic landscape of financial decision-making.

For Students and Practitioners Alike

Whether you are a graduate or undergraduate student studying financial management or a seasoned practitioner operating in the profit or non-profit environment, our book provides invaluable insights. Written by Professor André B. Dorsman, Ph.D., a renowned finance expert at Nyenrode University and a member of the Economic Faculty at Free University Amsterdam, this comprehensive guide is the key to making sound financial decisions in today's ever-changing world.