The essentials of finance and accounting for nonfinancial managers

Understanding financial information. The balance sheet ; The income statement ; The statement of cash flows ; Generally accepted accounting principles : a review and update ; The annual report and other sources of incredibly valuable information

Analysis of financial statements. Key financial ratios ; Using return on assets to measure profit centers ; Overhead allocations

Decision making for improved profitability. Analysis of business profitability ; Return on investment

Additional financial information. Financing the business ; Business planning and the budget ; Final thoughts

Appendix A. Financial statement practice

Appendix B. Finance and accounting terms

Appendix C. Comprehensive case study : Paley Products, Inc.

Appendix D. Ratio matching challenge

Appendix E. Comprehensive case study : Woodbridge Manufacturing

Appendix F. Comprehensive case study : Bensonhurst Brewery.

Organization of the book

Additional background

Accounting defined

Generally accepted accounting principles

Financial analysis

Some additional perspectives on the planning process

pt. 1 Understanding financial information

1. The balance sheet

Expenses and expenditures

Assets

Important accounting concepts affecting the balance sheet

Liabilities

Stockholders' equity

Total liabilities and stockholders' equity

Additional balance sheet information

Analysis of the balance sheet

2. The income statement

Analysis of the income statement

3. The statement of cash flows

Sources of funds

Uses of funds

Statement of cash flows

Financial practice review

Analyzing the statement of cash flows

4. Generally accepted accounting principles: a review and update

The fiscal period

The going concern concept

Historical monetary unit

Conservatism

Quantifiable items or transactions

Consistency

Full disclosure

Materiality

Significant accounting issues

5. The annual report and other sources of incredibly Valuable information

The annual report

The 10-K report

The proxy statement

Other sources of information

The Securities and Exchange Commission

pt. 2 Analysis of financial statements

6. Key financial ratios

Statistical indicators

Financial ratios

Liquidity ratios

Ratios of working capital management

Measures of profitability

Financial leverage ratios

7. Using return on assets to measure profit centers

Assets

Revenue

After-tax cash flow (ATCF)

Return on assets: Its components

8. Overhead allocations

Problems that arise from cost allocation

What about the IRS and GAAP?

Effect on profits of different cost allocation issues

pt. 3 Decision making for improved profitability

9. Analysis of business profitability

Chart of accounts

Fixed costs

Variable costs

Development of fixed-cost estimates

Development of variable-cost estimates

Breakeven calculation

Variance analysis

10. Return on investment

What is analyzed?

Why are these opportunities analyzed so extensively?

Discounted cash flow

Present value

Discounted cash flow measures

Risk

Capital expenditure defined

The cash flow forecast

Characteristics of a quality forecast

Establishing the ROI target

Analytical simulations

Comprehensive case study

pt. 4 Additional financial information

11. Financing the business

Debt

Equity

Some guidance on borrowing money

12. Business planning and the budget

S.W.O.T. analysis

Planning

Significant planning guidelines and policies

Some additional issues

A guide to better budgets

Preparation of the budget

13. Selected business readings

Profitability during tough times

Do the right thing.

Cover; Title; Copyright; Contents; Introduction; Organization of the Book; Additional Background; Accounting Defined; Generally Accepted Accounting Principles; Financial Analysis; Some Additional Perspectives on the Planning Process; Part 1: Understanding Financial Information; 1. The Balance Sheet; Expenses and Expenditures; Assets; Important Accounting Concepts Affecting the Balance Sheet; Liabilities; Stockholders' Equity; Total Liabilities and Stockholders' Equity; Additional Balance Sheet Information; Analysis of the Balance Sheet; A Point to Ponder; 2. The Income Statement.

Analysis of the Income Statement; 3. The Statement of Cash Flows; Sources of Funds; Uses of Funds; Statement of Cash Flows; Analyzing the Statement of Cash Flows; 4. Generally Accepted Accounting Principles: A Review and Update; The Fiscal Period; The Going Concern Concept; Historical Monetary Unit; Conservatism; Quantifiable Items or Transactions; Consistency; Full Disclosure; Materiality; Significant Accounting Issues; 5. The Annual Report and Other Sources of Incredibly Valuable Information; The Annual Report; The Gilbert Brothers: The Original Shareholder Activists; Modern-Day Activists.

The 10-K Report; The Proxy Statement; Other Sources of Information; The Securities and Exchange Commission; Part 2: Analysis of Financial Statements; 6. Key Financial Ratios; Statistical Indicators; Financial Ratios; Liquidity Ratios; Ratios of Working Capital Management; Measures of Profitability; Financial Leverage Ratios; Revenue per Employee; Ratios: Quick and Dirty; 7. Using Return on Assets to Measure Profit Centers; Assets; Revenue; After-Tax Cash Flow (ATCF); Return on Assets: Its Components; A Business with No ''Assets''; 8. Overhead Allocations.

Problems That Arise from Cost Allocation; What About the IRS and GAAP?; Effect on Profits of Different Cost Allocation Issues; Part 3: Decision Making for Improved Profitability; 9. Analysis of Business Profitability; Chart of Accounts; Breakeven Calculation; Variance Analysis; 10. Return on Investment; What Is Analyzed?; Why Are These Opportunities Analyzed So Extensively?; Discounted Cash Flow; Present Value; Discounted Cash Flow Measures; Risk; Capital Expenditure Defined; The Cash Flow Forecast; Characteristics of a Quality Forecast; Establishing the ROI Target; Analytical Simulations.

Part 4: Additional Financial Information; 11. Financing the Business; Debt; Equity; Some Guidance on Borrowing Money; 12. Business Planning and the Budget; S.W.O.T. Analysis; Planning; Significant Planning Guidelines and Policies; Some Additional Issues; A Guide to Better Budgets; Preparation of the Budget; 13. Final Thoughts; Profitability During Tough Times; Do the Right Thing; Appendix A. Financial Statement Practice; Appendix B. Finance and Accounting Terms; Appendix C. Comprehensive Case Study: Paley Products, Inc.; Appendix D. Ratio Matching Challenge.