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Commercial Awareness and Business Decision Making Skills : How to understand and analyse company financial information - Paul Rodgers

Commercial Awareness and Business Decision Making Skills

How to understand and analyse company financial information

Paperback

Published: 19th July 2007
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This book is designed to act as a financial statement phrase book and dictionary rolled into one. It will enable those new to the financial world to draw meaning from the wealth of information contained within financial documents that were previously considered out of bounds.
Furthermore, although the pages within this book will be an invaluable springboard to those starting out in the world of accountancy, its promary aim is to enable commercial managers working within every facet of a business to meet clearly defined objectives.
It will enable these professionals to take commercial documents and visualise how they interact with the work of an accountant, explaining why every board of management appears to focus on financial data.
* Explains the impact of choices in accounting treatment upon the financial data an entity produces
* Uses tools to complement the financial data, encourages asking perceptive questions that elicit answer that would not otherwise be made available
* Adds value within a commercial business environment

Introduction to the bookp. x
Why do Financial Statements Exist?p. 1
The expectation gap - do not believe first impressionsp. 3
The division of ownership and hands-on managementp. 4
Management accounts vs. financial statementsp. 6
The stakeholder conceptp. 7
The owner-managed businessp. 9
So much more than numbersp. 9
The things every manager must knowp. 12
How are Commercial Transactions Captured?p. 13
The corporate paper trailp. 13
Capturing the datap. 16
The accounting equationp. 20
The things every manager must knowp. 24
The Balance Sheet: A Freeze Frame & The Concept of Articulation Using the Profit and Loss Accountp. 25
Linking the separate legal entity concept to the balance sheetp. 27
The purpose of the balance sheetp. 30
The purpose of the profit and loss account (also referred to as the income statement)p. 31
The point of articulationp. 34
The real worldp. 37
The things every manager must knowp. 37
A Brief Look at the Accountants' Phrase Bookp. 39
Understanding the labelp. 41
Debits and creditsp. 41
Confusion arising from day-to-day usagep. 43
Mr Big Ltd revistedp. 44
The things every manager must knowp. 47
Cash and Corporate Survivalp. 49
Making profit does not mean you can pay the billsp. 51
Cash accounting vs. accruals accountingp. 52
Accruals and prepaymentsp. 53
Satisfying the needs of stakeholders who want to know about both profit and cashp. 56
Formalizing cash flow presentationp. 57
The things every manager must knowp. 60
The Impact of International Harmonizationp. 61
The concept of a single GAAPp. 63
What is the timetable for change?p. 63
Presentational differencesp. 64
The things every manager must knowp. 71
The Managers' Analytical Toolkitp. 73
The lull before the stormp. 75
Commercial knowledgep. 75
Qualitative skillsp. 77
Quantitative measuresp. 77
The things every manager must knowp. 88
The Application of Knowledgep. 89
A basic approach to interpreting the numbersp. 91
Operational issuesp. 91
Do not ignore the obviousp. 93
Case studyp. 94
The things every manager must knowp. 106
Investor Analysisp. 107
The investment decision and why it mattersp. 109
Earnings per sharep. 109
The price-earnings ratiop. 112
Dividend yieldsp. 113
Other useful indicatorsp. 115
The things every manager must knowp. 116
Cash Ratiosp. 117
The ability to payp. 119
The cash recovery ratep. 119
Cash return on capital employedp. 119
Cash interest coverp. 120
Cash dividend coverp. 120
Looking beyond the financial pagesp. 120
The things every manager must knowp. 121
Getting to Grips with Accounting Choicep. 123
Why choice mattersp. 125
The origin of choicep. 127
What has this business done?p. 128
The things every manager must knowp. 131
Tangible Fixed Assetsp. 133
What constitutes a tangible fixed asset?p. 135
Fixed or not?p. 135
Identifying costp. 136
The concept of depreciationp. 137
Depreciation mechanicsp. 138
Depreciation - further choicep. 139
Depreciation ratiosp. 142
Revaluationp. 142
The mechanics of revaluationp. 144
Historic cost vs. current costp. 149
Impairment - taking bad news on the chinp. 151
Capitalization vs. expensingp. 155
The costs of financing constructionp. 158
The things every manager must knowp. 158
Hidden Value - Intangible Assetsp. 161
What constitutes an intangible asset?p. 163
Goodwillp. 164
Negative goodwillp. 167
Research and developmentp. 167
Other intangiblesp. 169
The things every manager must knowp. 173
An Introduction to Investmentsp. 175
Parent company vs. groupp. 177
What constitutes an investment?p. 178
The things every manager must knowp. 180
Leasing and the Concept of Commercial Substance Prevailing over Legal formp. 181
Why choose to lease an asset?p. 183
The concept of commercial substance prevailing over legal formp. 183
Differentiating operating and finance leasesp. 184
The transfer of risks and rewardsp. 185
Accounting consequences of the lease decisionp. 185
Analytical consequences of the lease decisionp. 189
Off-balance-sheet financep. 190
The things every manager must knowp. 191
Current Assetsp. 193
A quick recapp. 195
Stock valuation and its impact on financial indicatorsp. 195
Long-term contracts - an overviewp. 199
Trade and other debtorsp. 202
Bank and cashp. 203
The things every manager must knowp. 204
Current Liabilitiesp. 205
Beyond the trade creditor/payablep. 207
Other creditors/payablesp. 208
UK corporate taxation - a snapshotp. 209
What is deferred income?p. 209
Long-term contracts revisitedp. 210
Have the days of big bath provisions really died?p. 211
The future of provisioning - a technical momentp. 215
Financial Instruments - a warning shotp. 215
The things every manager must knowp. 215
Company Financingp. 217
Debt vs. equityp. 219
Preference share capitalp. 220
So much more than a loanp. 221
Welcome to the new world of financial instrumentsp. 222
Are the new rules necessary?p. 225
Convertible debtp. 226
The things every manager must knowp. 227
Further Clues about the Future of the Businessp. 229
Contingenciesp. 231
Post-balance-sheet eventsp. 232
Capital commitmentsp. 234
Multi-year analysisp. 236
Segmental analysisp. 239
The things every manager must knowp. 245
Things You Always Wanted to Know But Were Afraid to Askp. 247
Related partiesp. 249
Deferred taxation and associated tax issuesp. 253
The things every manager must knowp. 256
Group Financial Statements - The Basicsp. 257
Problems associated with the veil of incorporationp. 259
Commercial substance prevails againp. 260
Gaining controlp. 261
Influence onlyp. 262
The things every manager must knowp. 262
Putting your Skills to Usep. 265
The financial guru is bornp. 267
A systematic approachp. 267
The things every manager must knowp. 269
Indexp. 271
Table of Contents provided by Ingram. All Rights Reserved.

ISBN: 9780750683845
ISBN-10: 0750683848
Audience: Professional
Format: Paperback
Language: English
Number Of Pages: 272
Published: 19th July 2007
Publisher: Elsevier Science & Technology
Country of Publication: GB
Dimensions (cm): 23.4 x 16.5  x 1.91
Weight (kg): 0.49