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Construction Financial Management

Construction Financial Management
4.6 (51 reviews)
ISBN: 978-87-403-0956-0
3 edition
Pages : 121
  • Price: 129.00 kr
  • Price: €13.99
  • Price: £13.99
  • Price: ₹250
  • Price: $13.99
  • Price: 129.00 kr
  • Price: 129.00 kr

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About the book

  1. Description
  2. Content
  3. About the Author


This is a textbook on construction financial management written in simple English for undergraduate students who study construction related programmes. It is also suitable for postgraduate students (as a bridging course) who know construction technology well but are less familiar with financial management. Readers, after studying this book, will have a very good understanding on income statement, balance sheet, NPV (net present value), IRR (internal rate of return), and so on. They will be able to analyze the financial statements of a company and perform the financial analysis of a project proposal. Other related topics such as break-even analysis, S-Curve and working capital financing of a project are also discussed in this book.


  1. Financial Statements – Income Statement and Balance Sheet
    1. Introduction
    2. Income Statement
    3. Balance Sheet
    4. Working Capital and Current Ratio
    5. Under Billing and Over Billing
    6. Worked Examples
  2. Financial Statement Analysis of a Construction Company
    1. Analysis of Financial Statements by Financial Ratios
    2. Five Categories of Financial Ratios
    3. A Case Study
  3. Compound Interest, Net Present Value (NPV), Equivalent Annual Cost and Loan Redemption
    1. Nominal Interest Rate and Real Interest Rate
    2. Compound Interest Calculations
    3. Benefit-Cost Ratio
    4. Salvage Value and Equivalent Annual Cost
    5. Redeeming a Loan
    6. Principal Amortization and Interest Payment of a Loan
  4. Internal Rate of Return (IRR) and the Differences between IRR and NPV
    1. Net Cash Flow (NCF)
    2. DCF Method and IRR
    3. IRR versus NPV
    4. IRR as Financial Indicator and NPV as Economic Indicator
  5. Effect of Inflation
    1. Introduction
    2. Real IRR and Its Calculation in a World with Inflation
    3. When Is Inflation Adjustment Considered Or Not Considered?
    4. Concluding Remarks
  6. Cost-Volume-Profit Analysis
    1. Introduction
    2. Variable Costs, Fixed Costs and Break-even Point
    3. Graphical Presentation – Break-even Chart
    4. Mathematical Presentation
    5. Contribution
    6. The Make-or-Buy Decision
    7. Equipment Selection Decision
    8. Engineering Scheme Choice Decision
    9. Concluding Remarks
  7. Financial Analysis of a Project
    1. Introduction
    2. Basic Method of Financial Analysis
    3. A Case Study on Financial Analysis
  8. S-Curve and Working Capital Financing of a Construction Project
    1. Introduction
    2. S-Curve
    3. Cumulative Interim Payment Graph
    4. The Two Graphs combined
    5. A Worked Example
  9. Appendix
  10. Endnotes

About the Author

S.L. Tang is a Chartered Civil Engineer and obtained his B.Sc. in Civil Engineering from the University of Hong Kong in 1972, M.Sc. in Construction Engineering from the National University of Singapore in 1977, and Ph.D. from Civil Engineering Department of Loughborough University of the U.K. in 1989. He is a Fellow of the Hong Kong Institution of Engineers (FHKIE) and also a Fellow of the UK’s Institution of Civil Engineers (FICE). He had working experience in civil engineering practice in contracting/consulting firms and government departments of Singapore and Hong Kong. He taught in several universities, including those in Hong Kong, China, Australia and the USA. He is an Engineering Economist, and is the first scholar in the world who proposed that NPV is an economic indicator and IRR a financial indicator in his book "Economic Feasibility of Projects", published by McGraw-Hill in 1991. He also substantiated the discovery of this fundamental difference between NPV and IRR with a mathematical proof, published in the international journal 'Engineering Economist' in 2003. He is currently an independent (free-lance) engineering consultant and an Adjunct Professor of City University of Hong Kong. He has written ten books and well over one hundred journal/conference papers and research/consultancy reports related to the fields of Construction Management and Water & Environmental Management. Besides this book on construction financial management, he has books written on construction quality management, construction safety management, economic feasibility of projects, linear optimization (linear programming, integer programming and goal programming), quantitative techniques for decision making, and so on.

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