Contents -- 01 Learning about finance -- Introduction -- Who will find this book useful? -- What is 'difficult' about learning finance? -- Finance and mathematics -- Open and closed questions - concepts and calculations -- Finance and reality -- Problems with language -- The approach this book will take -- The numbers -- Coping with formulae and calculations -- The rest of the book -- Notes -- 02 Types of business -- Trading as a sole trader -- Trading as a partnership -- Trading as a company (corporation) -- Other possibilities -- 03 How business is financed -- Equity -- Debt -- The Miller Modigliani Theory -- The Theory of the Efficient Firm -- Notes -- 04 Accounting basics (1): the balance sheet -- Financial accounting: the basics -- Management accounts: the basics -- Financial accounts -- Balance sheet -- Valuation -- Auditing -- Notes -- 05 Accounting basics (2): the profit and loss account -- Turnover -- Profit (or earnings) -- Profit and cash-flow distinguished -- Analysing the P&L -- 06 Working capital and further financial analysis -- The current ratio -- The acid test ratio -- Long-term liquidity -- Working capital -- Notes -- 07 The time value of money -- Looking down the time tunnel -- Discounting -- Finding the present value of a cash-flow due in more than one year -- Compounding -- 08 Special uses of discounting -- Annuities -- Perpetuities -- The Internal Rate of Return -- Annuities and DC pension schemes -- 09 Risk -- What do we mean by 'risk'? -- What does the world of finance mean by 'risk'? -- Risk -- The Sharpe Ratio -- 10 Return -- Periodic returns -- What can constitute 'return'? -- Annualized returns -- Compound returns -- 11 Bonds (1): basic principles -- How can we classify bonds? -- Bond returns -- Notes -- 12 Bonds (2): discounting, redemption, pricing and valuation -- The redemption yield -- Bond pricing.

Bond durations -- 13 Equities -- Characteristics of equities: income -- Characteristics of equities: capital -- Measurement of equity returns -- Equity risk -- Measuring effective diversification -- 14 Alpha and beta: active and passive investment -- What is beta? -- What is alpha? -- The arguments in favour of active investment -- The arguments in favour of passive investment -- Notes -- 15 Derivatives (1): futures and options -- Futures -- Options -- Leverage -- Capital at risk -- Notes -- 16 Derivatives (2): swaps, futures, options and how to use them -- OTC and exchange traded options -- American and European options -- The Black-Scholes Model -- Swaps -- Hedging -- Notes -- 17 Capital markets and M&A transactions: events in the corporate life-cycle -- Merger and acquisition -- Flotation (IPO) -- Capital raising: issue of new bonds or shares (stock) -- Insolvency (bankruptcy) -- Notes -- 18 Asset allocation -- Regulation -- The truth about bonds -- Diversification -- Correlation -- The challenge: matching theory with reality -- Notes -- Appendix: key formulae -- Glossary of financial terms -- Index.