The book, edited by Chandrashekar Krishnamurti and Vishwananth S.R., discusses issues such as diversification via acquisition, value drivers and target valuation, real options analysis in M&A, design of consideration, accounting and tax factors, cross-border deals, takeover defences, spin-offs, equity carve-outs, and ESOPs (employee stock options).

Recommended addition to the finance professional’s shelf.

Goldilocks had done her research. “She knew the properties; she knew the locations and she knew the pigs. Where others were seeing a beast she was seeing a beauty,” write The Brothers Middleton in ‘Kissing the Frog: The magic that makes you money’ ( www.macmillanindia.com ).

“‘The more you find out about investments that others don’t like,’ she reflected, ‘the more that you can see that common knowledge might be wrong.’ She wondered if the same thing can be applied to people.”

Then comes the Hare to offer some more investment gyan to Goldilocks. “‘Spread your risk,’ he said. ‘Line up about 15 good-looking frogs and give them all a peck on the cheek.’ He explained that you really didn’t need too many more direct share investments than that.”

You certainly will not get it right every time, cautions the Hare. “‘Even with all my experience, my batting average is only about 80 per cent. Two out of every 10 investments I make turn out to be duds — at least in the short term. But if I don’t allow myself to own those two, I can’t allow myself to own the other eight. I simply can’t identify the two duds in advance — if I could, I certainly wouldn’t invest in them.”

A book worth investing in!

Financial ratios in isolation are of no use, write Anil Bhat and Arya Kumar in ‘Management: Principles, Processes, and Practices’ ( www.oup.com). The value of ratios lies in meaningful and relevant comparisons leading to interpretations that facilitate the analysis and diagnosis of a given situation, the authors elucidate.

“Ratio comparisons can be made in two ways — cross-sectional and time series. Cross-sectional analysis compares the financial ratios of different comparable firms at a given point of time. The comparison can be with the best, worst, or average in the industry.”

In contrast, time series analysis is about comparison across time. While this can help in evaluating the company’s progress or deterioration, care should be taken to see if there have been fundamental changes in the company’s situation or prospects.

Designed as a text for MBA students, the book is comprehensive and easy to read.

Myths about poverty

That we can donate people out of poverty is the first of the three great poverty eradication myths, says Paul Polak in ‘Out of Poverty: What works when traditional approaches fail’ ( www.tatamcgrawhill.com ). “As soon as word gets out that a multimillion-dollar giveaway is coming, developing-country politicians with Swiss bank accounts and get-rich-quick businessmen will gather like moths around a flame. They will participate in congratulatory ribbon-cutting ceremonies.”

Any positive impacts of investments at the village level will be outweighed by market distortions from project-induced corruption and subsidies, sabotaging the emergence of true markets, rues Polak.

Important messages.

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