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Roy L. Crum - Restructuring and managing the enterprise in transition

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A wide gap still exists between Western concepts and their application in the ex-socialist countries during transition. Most Western models in financial management make assumptions about the efficiency and stability of markets and the signals that can be obtained and also assume that traditional accounting information is available and can be used for management purposes. A new paradigm is needed to manage the finance function in a transition economy experiencing hyperinflation since stamdard assumptions are not valid in most ex-socialist countries. This book describes the adaptations of financial techniques as it reviews standard financial concepts and tools, adjusts them when necessary to the unique conditions in the ex-socialist enterprises, and then presents the restructuring context and some strategies that are based on the application of these tools.

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title Restructuring and Managing the Enterprise in Transition EDI Learning - photo 1

title:Restructuring and Managing the Enterprise in Transition EDI Learning Resources Series, 1020-3842
author:Crum, Roy L.; Goldberg, Itzhak
publisher:World Bank
isbn10 | asin:0821336584
print isbn13:9780821336588
ebook isbn13:9780585183381
language:English
subjectCorporations--Europe, Eastern--Finance, Corporations--Former Soviet republics--Finance, Privatization--Europe, Eastern, Privatization--Former Soviet republics.
publication date:1998
lcc:HG4133.7.C78 1998eb
ddc:658.4/06
subject:Corporations--Europe, Eastern--Finance, Corporations--Former Soviet republics--Finance, Privatization--Europe, Eastern, Privatization--Former Soviet republics.
Page i
EDI Learning Resources Series
Restructuring and Managing the Enterprise in Transition
Roy L. Crum
Itzhak Goldberg
Restructuring and managing the enterprise in transition - image 2
Page ii
Copyright 1998
The International Bank for Reconstruction
and Development / THE WORLD BANK
1818 H Street, N.W.
Washington, D.C. 20433, U.S.A.
All rights reserved
Manufactured in the United States of America
First printing July 1998
The Economic Development Institute (EDI) was established by the World Bank in 1955 to train officials concerned with development planning, policymaking, investment analysis, and project implementation in member developing countries. At present the substance of the EDI's work emphasizes macroeconomic and sectoral economic policy analysis. Through a variety of courses, seminars, and workshops, most of which are given overseas in cooperation with local institutions, the EDI seeks to sharpen analytical skills used in policy analysis and to broaden understanding of the experience of individual countries with economic development. Although the EDI's publications are designed to support its training activities, many are of interest to a much broader audience. EDI materials, including any findings, interpretations, and conclusions, are entirely those of the authors and should not be attributed in any manner to the World Bank, to its affiliated organizations, or to members of its Board of Executive Directors or the countries they represent.
Because of the informality of this series and to make the publication available with the least possible delay, the manuscript has not been edited as fully as would be the case with a more formal document, and the World Bank accepts no responsibility for errors. Some sources cited in this paper may be informal documents that are not readily available.
The material in this publication is copyrighted. Requests for permission to reproduce portions of it should be sent to the Office of the Publisher at the address shown in the copyright notice above. The World Bank encourages dissemination of its work and will normally give permission promptly and, when the reproduction is for noncommercial purposes, without asking a fee. Permission to photocopy portions for classroom use is granted through the Copyright Clearance Center, Inc., Suite 910, 222 Rosewood Drive, Danvers, Massachusetts 01923, U.S.A.
The complete backlist of publications from the World Bank is shown in the annual Index of Publications, which contains an alphabetical title list with full ordering information. The latest edition is available free of charge from the Office of the Publisher, 1818 H Street, N. W., Washington, D. C. 20433, U.S.A.
Roy L. Crum is professor of finance and director of the University of Florida's Center for International Economics and Business Studies.
Itzhak Goldberg is a program team leader in the Private and Financial Sector Development unit of the World Bank's Europe and Central Asia Region.
Library of Congress Cataloging-in-Publication Data
Crum, Roy L.
Restructuring and managing the enterprise in transition / Roy L.
Crum, Itzhak Goldberg.
p. cm.(EDI learning resources series, ISSN 1020-3842)
ISBN 0-8213-3658-4
1. CorporationsEurope, EasternFinance. 2. Corporations
Former Soviet republicsFinance. 3. PrivatizationEurope.
Eastern. 4. PrivatizationFormer Soviet republics. I. Goldberg,
Itzhak, 1947- . II. Title. III. Series.
HG4133.7.C78 1998 96-22711
658.4'06dc20 CIP
Page iii
Contents
Foreword
v
Preface
vii
Introduction and Overview
1
Picture 3
Appendix A. Private Enterprise and the Market Economy
7
Picture 4
Appendix B. The Role of Capital Markets in a Market Economy
13
Chapter 1. The Time Value of Money, Risk, and Rates of Return
23
Picture 5
Appendix A. Present Values, Future Values, and Annuities
41
Picture 6
Appendix B. Setting the Risk Premium for a Risky Loan
45
Chapter 2. Financial Accounting: The Language of Business
47
Chapter 3. Discovering Meaning in Accounting Information
65
Picture 7
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