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Understanding the financial score
Author
Title
Understanding the financial score [electronic resource] / Henry E. Riggs.
ISBN
1598291696 (electronic bk.)
9781598291698 (electronic bk.)
1598291688 (pbk.)
9781598291681 (pbk.)
Edition
1st ed.
Published
San Rafael, Calif. (1537 Fourth Street, San Rafael, CA 94901 USA) : Morgan & Claypool Publishers, c2007.
Physical Description
1 online resource (xv, 159 p. : ill.) : digital file.
Local Notes
Access is available to the Yale community.
Notes
Part of: Synthesis digital library of engineering and computer science.
Title from PDF t.p. (viewed on October 15, 2008).
Series from website.
Includes index.
Access and use
Access restricted by licensing agreement.
Summary
Financial statements and information drawn from them confront us daily: in the media, in corporate annual reports, in the treasurer's reports for clubs or religious groups, in documents provided to employees and managers, as one considers alternative investments, in documents provided by homeowners' association and government agencies. Various readers of a company's "financial score" make decisions based on financial information: the company's managers devise actions to improve operations; investors buy or sell the corporation's securities; creditors decide how much to lend; customers judge the reliability of this supplier; potential employees decide whether to invest their careers in the company. If you are training to be an accountant, find another book. This book's objective is to increase your ability to draw useful information from financial statements, and thus to make better decisions, in both your personal life and your professional life. Studying this book should help you be a better manager. That is both its objective and its perspective. The book starts at square one; it assumes no prior knowledge on your part. To increase your financial literacy, you will learn the common nomenclature (but not esoteric jargon) used by accountants and financial experts. You will be equipped to ask insightful questions of experts, to engage them and your colleagues in thoughtful debates about financial and accounting issues, and to make better decisions.
Variant and related titles
Synthesis digital library of engineering and computer science.
Other formats
Also available in print.
Format
Books / Online
Language
English
Added to Catalog
April 24, 2013
Series
Synthesis lectures on technology, management, and entrepreneurship, #1
System details note
Mode of access: World Wide Web.
System requirements: Adobe Acrobat Reader.
Contents
The balance sheet
The fundamental accounting equation
A statement of financial position
Structure of the balance sheet
Assets
Liabilities
Once again: what is owners' equity
How is the equality of the balance sheet maintained
Single-entry vs. double-entry bookkeeping
Accounting periods
Debits and credits
Could the balance sheet suffice as the only financial statement
Example: Federated Department Store balance sheet
A balance sheet reflects the nature of the business
New terms
The income statement
Structure of the income statement
An income statement reflects the nature of the business
Why aren't dividend payments considered an expense
Debits and credits
General ledger and chart of accounts
Example: Federated Department Stores income statement
Footnotes to financial statements
New terms
Valuation
Definition of accounting
Valuation: cost, market or time-adjusted
Valuation at cost
Valuation at market
Understanding the financial score
Time-adjusted valuation
Estimating and approximating values
Accounting for currency fluctuations
Some valuation rules
New terms
Timing
Matching, accrual and deferral
Materiality
Allowances; contra accounts
Accounting for fixed assets
Depreciation and income taxes
Accounting for cash discounts on purchases and sales
FIFO/LIFO inventory valuation
Recurring and non-recurring adjusting entries
Again, Federated Department Stores
Challenging timing issues in certain industries
Book publishing
Motion picture studios
Software
Industries offering generous product warranties
More accounting rules
New terms
Capital structure
Sources of debt
Trade credit
Other short-term borrowing
Long-term borrowing
Leasing
Public-borrowing
High-yield (junk) bonds
Equity
Stock markets
When is a stock a good candidate for purchase or sale
Stock dividends and stock splits
Stock options and warrants
Earnings-per-share (EPS) and price/earnings (P/E) ratios
Going public
Share repurchase
The role of regulators
Preferred stock
Hybrid securities
When is borrowing more attractive than selling additional equity
Debt leverage
Equity dilution
Designing a corporate capital structure
Corporate mergers and acquisitions
Once again: Federated Department Stores
New terms
Cash flow
Three key sections of the cash flow statement
Federated's cash flow statement
Cash flow from operations
Cash flow from investing activities
Cash flow from financing
Cash flows in other industries
Growth
Profitability
Asset intensity
New terms
Evaluating with ratios
Ratio analysis
Categories of ratios
Liquidity ratios
Current ratio
Quick or acid-test ratio
Utilization of working capital ratios
Accounts receivable collection period
Inventory turnover
Accounts payable payment period
Capital structure ratios
Profitability ratios
Cash adequacy ratios
Interpreting ratios
Trends
Comparisons within the department store industry
Sustainable growth rate
Another example: analysis of a manufacturing company
New terms
Cost accounting
Cost accounting in manufacturing
Accounting for overhead
Example: DJM Manufacturing
Example: Ware and Foster, a law firm
Understanding and interpreting overhead
Pricing based on cost accounting information
Analyzing subcontracting opportunities
Full costs are not incremental costs
Interpreting overhead variances
Standard costing
Summary
New terms
Budgeting and forecasting
Operating budgets
Pro forma financial statements
Example: Wellstock Corporation
Cash budgeting
New terms
Rules and integrity
Ethics, values, and culture
Accounting rules
Audits and auditors
Regulators
Cooking the books
Overstating assets
Understating liabilities
Overstate or accelerate revenues
Understate or defer expenses
Summary
New terms
Appendix: Scorekeeping at not-for-profits
How are not-for-profits different
Gifts
Endowment
Revenues and expenses
Assets and liabilities
Example: Avenidas
Another example: Stanford University
Unrealized business income
Accounting principles for not-for-profits
Summary
New terms.
Subjects
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