Although an estimated one-third to one-half of engineers will end up in a management role at some point in their careers, the typical engineering education devotes little attention to management skills. As a result, engineers who go into management are often left stumbling about with a poor background and inadequate skill sets. Financial Management for Engineers seeks to fill this gap in the engineering curriculum.
Aimed at a one-semester course in engineering economics, Financial Management for Engineers has four components:
- The nature of money as a measure of commercial value, and a brief discussion of how non-monetary values are measured against monetary ones (one chapter).
- Financial statement analysis (five chapters). Bookkeeping is discussed very briefly, emphasizing that engineers need to learn how to manage from financial statements. The next three chapters cover the management use of income statements, balance sheets, and statements of cash flow. The final chapter on financial statement analysis discusses common financial ratios.
- Investment analysis (two chapters). Develops concepts such as discounting future dollars, net present value, internal rate of return, and mitigating risk. The approach emphasizes using spreadsheets to analyze investments, and hence avoids the tedious repetitive development of formulae that all derive from one fundamental equation. A separate chapter covers valuation from a conceptual approach.
- The final chapter, based on the author’s own experience, discusses applying these concepts in the actual management of a business.
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