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December 8, 2011 8:56 PM

What are the best books about capital budgeting? I am looking for what finance professionals use as their reference guide.

I just finished my class in finance, and I really didn't understand capital budgeting as well as I would like. I know this is really important to understand, so I'd like to do some self-study during break to try to get it all straight. The textbook we used was Finnerty and Stowe's Corporate Financial Management, and it did not have a) enough practice problems or b) enough clear explanations for a dim-witted winna.

posted by winna to Work & Money (4 answers total)

I don't know that you will find the definitive volume for capital budgeting "used by finance professionals as a reference guide". There are many books available that have relatively current information for business finance, cash flow, and budgeting, but much depends on the type business of interest. Budgeting for a manufacturing firm vs. a service company vs. a supplies distributorship vs. a retailer are each very specific to the business. Often one deals heavily with issues one or more of the others does not have at all.

After 35 years in management I can tell you that very few "finance professionals" have a good handle on each type of business. We produced detailed business plans for both manufacturing and distributorship businesses that often included several hundred line items for sales and expenses. Not a particularly effective tool for managing, but often necessary for your friendly lender.

You might look into books specific to the type business or element of business budgeting you are having difficultly understanding. A quick look at Amazon brought up a dozen or more.
posted by randiana at 9:56 PM on December 8, 2011

Have you tried asking your professor?
posted by VTX at 6:38 AM on December 9, 2011

Best answer: Higgins Analysis for Financial Management is quite good at getting the point across and miight be a useful supplement for a more traditional text. Here is the current edition but I would buy the old edition at a discount.
posted by shothotbot at 8:30 AM on December 9, 2011

Best answer: Seconding shothotbot's recommendation for Higgins' book. It is relatively short (not a 1000 page textbook) and extremely readable (for a finance book).
posted by elmay at 8:57 AM on December 9, 2011