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The Resource Accounting : an introduction, Eddie McLaney and Peter Atrill

Accounting : an introduction, Eddie McLaney and Peter Atrill

Label
Accounting : an introduction
Title
Accounting
Title remainder
an introduction
Statement of responsibility
Eddie McLaney and Peter Atrill
Creator
Contributor
Subject
Genre
Language
eng
Summary
From the well-established author team of Eddie McLaney and Peter Atrill this text aims to offer non-specialist students a balanced introduction to financial and management accounting
Cataloging source
StDuBDS
http://library.link/vocab/creatorName
McLaney, E. J
Illustrations
illustrations
Index
index present
Literary form
non fiction
http://library.link/vocab/relatedWorkOrContributorName
Atrill, Peter
http://library.link/vocab/subjectName
  • Accounting
  • Accounting
Target audience
specialized
Label
Accounting : an introduction, Eddie McLaney and Peter Atrill
Instantiates
Publication
Note
Previous ed.: 2008
Bibliography note
Includes bibliographical references and index
Contents
  • 1. Introduction to accounting and finance -- Introduction -- Learning outcomes -- What are accounting and finance? -- Who are the users of accounting information? -- The conflicting interests of users -- How useful is accounting information? -- Evidence on the usefulness of accounting -- Providing a service -- But... is it material? -- Weighing up the costs and benefits -- Accounting as an information system -- Management and financial accounting -- Scope of this book -- Has accounting become too interesting? -- The changing face of accounting -- Why do I need to know anything about accounting and finance? -- Accounting for business -- What is the purpose of a business? -- What kinds of business ownership exist? -- Sole proprietorship -- Partnership -- Limited company -- How are businesses organised? -- How are businesses managed? -- What is the financial objective of a business? -- Balancing risk and return -- Not-for-profit organisations -- Summary -- Key terms -- References -- Further reading -- Review questions -- pt. 1 Financial accounting -- 2. Measuring and reporting financial position -- Introduction -- Learning outcomes -- Making financial decisions -- The major financial statements - an overview -- The statement of financial position -- Assets -- Claims -- The effect of trading transactions -- Classifying assets -- Current assets -- Non-current assets -- Classifying claims -- Current liabilities -- Non-current liabilities -- Statement layouts -- Capturing a moment in time -- The role of accounting conventions -- Business entity convention -- Historic cost convention -- Prudence convention -- Going concern convention -- Dual aspect convention -- Money measurement -- Goodwill and brands -- Human resources -- Monetary stability -- Valuing assets -- Tangible non-current assets (property, plant and equipment) -- Intangible non-current assets -- The impairment of non-current assets -- Inventories -- Meeting user needs -- Summary -- Key terms -- Further reading -- Review questions -- Exercises -- 3. Measuring and reporting financial performance -- Introduction -- Learning outcomes -- What does it mean? -- The income statement -- Different roles -- Income statement layout -- Gross profit -- Operating profit -- Profit for the year -- Further issues -- Cost of sales -- Classifying expenses -- The accounting period -- Recognising revenue -- Long-term contracts -- Services -- Recognising expenses -- When the expense for the period is more than the cash paid during the period -- When the amount paid during the period is more than the full expense for the period -- Profit, cash and accruals accounting -- Depreciation -- Tangible non-current assets (property, plant and equipment) -- Depreciating intangible assets -- Depreciation and asset replacement -- Depreciation and judgement -- Costing inventories -- First in, first out (FIFO) -- Last in, first out (LIFO) -- Weighted average cost (AVCO) -- Inventories - some further issues -- Trade receivables problems -- Uses and usefulness of the income statement -- Summary -- Key terms -- Further reading -- Review questions -- Exercises -- 4. Accounting for limited companies (1) -- Introduction -- Learning outcomes -- Why limited companies? -- The main features of limited companies -- Legal nature -- Perpetual life -- Limited liability -- Legal safeguards -- Public and private companies -- Taxation -- Transferring share ownership: the role of the Stock Exchange -- Managing a company -- Strengthening the framework of rules -- The Combined Code -- Financing limited companies -- The owners' claim -- The basic division -- Share capital -- Reserves -- Bonus shares -- Share capital jargon -- Raising share capital -- Borrowings -- Withdrawing equity -- The main financial statements -- The income statement -- The statement of financial position -- Dividends -- Accounting for groups of companies -- Summary -- Key terms -- Reference -- Further reading -- Review questions -- Exercises -- 5. Accounting for limited companies (2) -- Introduction -- Learning outcomes -- The directors' duty to account -- The need for accounting rules -- Sources of accounting rules -- Presenting the financial statements -- Statement of financial position -- Statement of comprehensive income -- Statement of changes in equity -- Statement of cash flows -- Notes -- General points -- The framework of principles -- The IASB framework -- The auditors' role -- Directors' report -- Segmental financial reports -- Segmental reporting rules -- Segmental disclosure -- Segmental reporting issues -- Business review -- The reporting framework -- The quality of business reviews -- Summary financial statements -- Creative accounting -- Creative accounting methods -- Checking for creative accounting -- Creative accounting and economic growth -- Summary -- Key terms -- Reference -- Further reading -- Review questions -- Exercises -- 6. Measuring and reporting cash flows -- Introduction -- Learning outcomes -- The statement of cash flows -- Why is cash so important? -- The main features of the statement of cash flows -- A definition of cash and cash equivalents -- The relationship between the main financial statements -- The form of the statement of cash flows -- The normal direction of cash flows -- Preparing the statement of cash flows -- Deducing net cash flows from operating activities -- Deducing the other areas of the statement of cash flows -- What does the statement of cash flows tell us? -- Problems with IAS 7 -- Summary -- Key terms -- Reference -- Further reading -- Review questions -- Exercises -- 7. Analysing and interpreting financial statements -- Introduction -- Learning outcomes -- Financial ratios -- Financial ratio classifications -- The need for comparison -- Past periods -- Similar businesses -- Planned performance -- Calculating the ratios -- A brief overview -- Profitability -- Return on ordinary shareholders' funds (ROSF) -- Return on capital employed (ROCE) -- Operating profit margin -- Gross profit margin -- Efficiency -- Average inventories turnover period -- Average settlement period for trade receivables -- Average settlement period for trade payables -- Sales revenue to capital employed -- Sales revenue per employee -- Relationship between profitability and efficiency -- Liquidity -- Current ratio -- Acid test ratio -- Cash generated from operations to maturing obligations ratio -- Financial gearing -- Gearing ratio -- Interest cover ratio -- Investment ratios -- Dividend payout ratio -- Dividend yield ratio -- Earnings per share -- Cash generated from operations per share -- Price/earnings (P/E) ratio -- Financial ratios and the problem of overtrading -- Trend analysis -- Using ratios to predict financial failure -- Using single ratios -- Using combinations of ratios -- Z score models -- Limitations of ratio analysis -- Summary -- Key terms -- References -- Further reading -- Review questions -- Exercises -- pt. 2 Management accounting -- 8. Relevant costs for decision making -- Introduction -- Learning outcomes -- What is meant by ̀cost'? -- Relevant costs: opportunity and outlay costs -- Sunk costs and committed costs -- Qualitative factors of decisions -- Using relevant costs as a basis for setting prices -- Summary -- Key terms -- Further reading -- Review questions -- Exercises -- 9. Cost-volume-profit analysis -- Introduction -- Learning outcomes -- Cost behaviour -- Fixed cost -- Variable cost -- Semi-fixed (semi-variable) cost -- Estimating semi-fixed (semi-variable) cost -- Finding the break-even point -- Contribution -- Contribution margin ratio -- Margin of safety -- Achieving a target profit -- Operating gearing -- Operating gearing and its effect on profit -- Profit-volume charts -- The economist's view of the break-even chart -- Failing to break even -- Weaknesses of break-even analysis -- Using contribution to make decisions: marginal analysis -- Pricing/assessing opportunities to enter contracts -- The most efficient use of scarce resources -- Make-or-buy decisions -- Closing or continuation decisions -- Summary -- Key terms -- Further reading -- Review questions -- Exercises -- 10. Full costing -- Introduction -- Learning outcomes -- Why do managers want to know the full cost? -- What is full costing? -- Single-product businesses -- Multi-product businesses -- Direct and indirect cost -- Job costing -- Full (absorption) costing and the behaviour of cost -- The problem of indirect cost -- Overheads as service renderers -- Job costing: a worked example -- Selecting a basis for charging overheads -- Segmenting the overheads -- Dealing with overheads on a cost centre basis -- Batch costing -- Full (absorption) cost as the break-even price -- The forward-looking nature of full (absorption) costing -- Using full (absorption) cost information -- Full cost (cost-plus) pricing -- Price makers and price takers -- Use of cost-plus information by price takers -- Criticisms of full (absorption) costing -- Full (absorption) costing versus variable costing -- Which method is better? -- Summary -- Key terms -- Further reading -- Review questions -- Exercises -- 11. Costing and performance evaluation in a competitive environment -- Introduction -- Learning outcomes --
  • Contents note continued: Cost determination in the changed business environment -- Costing: the traditional way -- Costing: the new environment -- Cost management systems -- The problem of overheads -- Taking a closer look -- Activity-based costing -- Attributing overheads -- Benefits of ABC -- ABC versus the traditional approach -- ABC and service industries -- Criticisms of ABC -- Other costing approaches in the modern environment -- Total (or whole) life-cycle costing -- Target costing -- Costing quality control -- Kaizen costing -- Value chain analysis -- Benchmarking -- Non-financial measures of performance -- The balanced scorecard -- Measuring shareholder value -- The quest for shareholder value -- How can shareholder value be created? -- The need for new measures -- Economic value added (EVA®) -- Summary -- Key terms -- References -- Further reading -- Review questions -- Exercises -- 12. Budgeting -- Introduction -- Learning outcomes -- How budgets link with strategic plans and objectives -- Collecting information on performance and exercising control -- Time horizon of plans and budgets -- Limiting factors -- Budgets and forecasts -- Periodic and continual budgets -- How budgets link to one another -- How budgets help managers -- The budget-setting process -- Using budgets in practice -- Incremental and zero-base budgeting -- Preparing the cash budget -- Preparing other budgets -- Activity-based budgeting -- Non-financial measures in budgeting -- Budgets and management behaviour -- Who needs budgets? -- Beyond conventional budgeting -- Long live budgets! -- Summary -- Key terms -- References -- Further reading -- Review questions -- Exercises -- 13. Accounting for control -- Introduction -- Learning outcomes -- Budgeting for control -- Types of control -- Variances from budget -- Flexing the budget -- Sales volume variance -- Sales price variance -- Materials variances -- Labour variances -- Fixed overhead variance -- Reasons for adverse variances -- Variance analysis in service industries -- Non-operating-profit variances -- Investigating variances -- Compensating variances -- Making budgetary control effective -- Behavioural issues -- The impact of management style -- Failing to meet the budget -- Standard quantities and costs -- Setting standards -- Who sets the standards? -- How is information gathered? -- What kind of standards should be used? -- The learning-curve effect -- Other uses for standard costing -- Some problems... -- The new business environment -- Summary -- Key terms -- Reference -- Further reading -- Review questions -- Exercises -- pt. 3 Financial management -- 14. Making capital investment decisions -- Introduction -- Learning outcomes -- The nature of investment decisions -- Investment appraisal methods -- Accounting rate of return (ARR) -- ARR and ROCE -- Problems with ARR -- Payback period (PP) -- Problems with PP -- Net present value (NPV) -- Interest lost -- Risk -- Inflation -- What will logical investors do? -- Using discount tables -- Why NPV is better -- NPV's wider application -- Internal rate of return (IRR) -- Problems with IRR -- Some practical points -- Investment appraisal in practice -- Investment appraisal and strategic planning -- Dealing with risk -- Assessing the level of risk -- Reacting to the level of risk -- Managing investment projects -- Stage 1 Determine investment funds available -- Stage 2 Identify profitable project opportunities -- Stage 3 Evaluate the proposed project -- Stage 4 Approve the project -- Stage 5 Monitor and control the project -- Summary -- Key terms -- Reference -- Further reading -- Review questions -- Exercises -- 15. Financing a business -- Introduction -- Learning outcomes -- Sources of finance -- Sources of internal finance -- Long-term sources of internal finance -- Retained profits -- Short-term sources of internal finance -- Tighter credit control -- Reducing inventories levels -- Delaying payment to trade payables -- Sources of external finance -- Long-term sources of external finance -- Ordinary shares -- Preference shares -- Borrowings -- Finance leases and sale-and-leaseback arrangements -- Hire purchase -- Securitisation (asset-backed finance) -- Gearing and the long-term financing decision -- Share issues -- Rights issues -- Offers for sale and public issues -- Issue by tender -- Private placings -- Bonus issues -- The role of the Stock Exchange -- Advantages of a listing -- Disadvantages of a listing -- The Alternative Investment Market -- Short-term sources of external finance -- Bank overdrafts -- Debt factoring -- Invoice discounting -- Long-term versus short-term borrowing -- Providing long-term finance for the small business -- Venture capital -- Business angels -- Government assistance -- Summary -- Key terms -- References -- Further reading -- Review questions -- Exercises -- 16. Managing working capital -- Introduction -- Learning outcomes -- What is working capital? -- Managing working capital -- The scale of working capital -- Managing inventories -- Budgeting future demand -- Financial ratios -- Recording and reordering systems -- Levels of control -- Inventories management models -- Managing receivables -- Which customers should receive credit and how much should they be offered? -- Length of credit period -- Cash discounts -- Debt factoring and invoice discounting -- Credit insurance -- Collection policies and reducing the risk of non-payment -- Managing cash -- Why hold cash? -- How much cash should be held? -- Controlling the cash balance -- Cash budgets and managing cash -- Operating cash cycle -- Cash transmission -- Bank overdrafts -- Managing trade payables -- Controlling trade payables -- Working capital problems of the small business -- Managing inventories -- Credit management -- Managing cash -- Managing credit suppliers -- Summary -- Key terms -- Reference -- Further reading -- Review questions -- Exercises -- pt. 4 Supplementary information -- Appendix A Recording financial transactions -- Introduction -- Learning outcomes -- The basics of double-entry bookkeeping -- Recording trading transactions -- Balancing accounts and the trial balance -- Preparing the financial statements (final accounts) -- The ledger and its division -- Summary -- Key terms -- Further reading -- Exercises -- Appendix B Glossary of key terms -- Appendix C Solutions to self-assessment questions -- Appendix D Solutions to review questions -- Appendix E Solutions to selected exercises -- Appendix F Present value table
Control code
ocn685109465
Dimensions
27 cm
Edition
5th ed
Extent
xxviii, 828 p.
Isbn
9780273733201
Isbn Type
(pbk.)
Other physical details
col. ill.
System control number
(OCoLC)685109465
Label
Accounting : an introduction, Eddie McLaney and Peter Atrill
Publication
Note
Previous ed.: 2008
Bibliography note
Includes bibliographical references and index
Contents
  • 1. Introduction to accounting and finance -- Introduction -- Learning outcomes -- What are accounting and finance? -- Who are the users of accounting information? -- The conflicting interests of users -- How useful is accounting information? -- Evidence on the usefulness of accounting -- Providing a service -- But... is it material? -- Weighing up the costs and benefits -- Accounting as an information system -- Management and financial accounting -- Scope of this book -- Has accounting become too interesting? -- The changing face of accounting -- Why do I need to know anything about accounting and finance? -- Accounting for business -- What is the purpose of a business? -- What kinds of business ownership exist? -- Sole proprietorship -- Partnership -- Limited company -- How are businesses organised? -- How are businesses managed? -- What is the financial objective of a business? -- Balancing risk and return -- Not-for-profit organisations -- Summary -- Key terms -- References -- Further reading -- Review questions -- pt. 1 Financial accounting -- 2. Measuring and reporting financial position -- Introduction -- Learning outcomes -- Making financial decisions -- The major financial statements - an overview -- The statement of financial position -- Assets -- Claims -- The effect of trading transactions -- Classifying assets -- Current assets -- Non-current assets -- Classifying claims -- Current liabilities -- Non-current liabilities -- Statement layouts -- Capturing a moment in time -- The role of accounting conventions -- Business entity convention -- Historic cost convention -- Prudence convention -- Going concern convention -- Dual aspect convention -- Money measurement -- Goodwill and brands -- Human resources -- Monetary stability -- Valuing assets -- Tangible non-current assets (property, plant and equipment) -- Intangible non-current assets -- The impairment of non-current assets -- Inventories -- Meeting user needs -- Summary -- Key terms -- Further reading -- Review questions -- Exercises -- 3. Measuring and reporting financial performance -- Introduction -- Learning outcomes -- What does it mean? -- The income statement -- Different roles -- Income statement layout -- Gross profit -- Operating profit -- Profit for the year -- Further issues -- Cost of sales -- Classifying expenses -- The accounting period -- Recognising revenue -- Long-term contracts -- Services -- Recognising expenses -- When the expense for the period is more than the cash paid during the period -- When the amount paid during the period is more than the full expense for the period -- Profit, cash and accruals accounting -- Depreciation -- Tangible non-current assets (property, plant and equipment) -- Depreciating intangible assets -- Depreciation and asset replacement -- Depreciation and judgement -- Costing inventories -- First in, first out (FIFO) -- Last in, first out (LIFO) -- Weighted average cost (AVCO) -- Inventories - some further issues -- Trade receivables problems -- Uses and usefulness of the income statement -- Summary -- Key terms -- Further reading -- Review questions -- Exercises -- 4. Accounting for limited companies (1) -- Introduction -- Learning outcomes -- Why limited companies? -- The main features of limited companies -- Legal nature -- Perpetual life -- Limited liability -- Legal safeguards -- Public and private companies -- Taxation -- Transferring share ownership: the role of the Stock Exchange -- Managing a company -- Strengthening the framework of rules -- The Combined Code -- Financing limited companies -- The owners' claim -- The basic division -- Share capital -- Reserves -- Bonus shares -- Share capital jargon -- Raising share capital -- Borrowings -- Withdrawing equity -- The main financial statements -- The income statement -- The statement of financial position -- Dividends -- Accounting for groups of companies -- Summary -- Key terms -- Reference -- Further reading -- Review questions -- Exercises -- 5. Accounting for limited companies (2) -- Introduction -- Learning outcomes -- The directors' duty to account -- The need for accounting rules -- Sources of accounting rules -- Presenting the financial statements -- Statement of financial position -- Statement of comprehensive income -- Statement of changes in equity -- Statement of cash flows -- Notes -- General points -- The framework of principles -- The IASB framework -- The auditors' role -- Directors' report -- Segmental financial reports -- Segmental reporting rules -- Segmental disclosure -- Segmental reporting issues -- Business review -- The reporting framework -- The quality of business reviews -- Summary financial statements -- Creative accounting -- Creative accounting methods -- Checking for creative accounting -- Creative accounting and economic growth -- Summary -- Key terms -- Reference -- Further reading -- Review questions -- Exercises -- 6. Measuring and reporting cash flows -- Introduction -- Learning outcomes -- The statement of cash flows -- Why is cash so important? -- The main features of the statement of cash flows -- A definition of cash and cash equivalents -- The relationship between the main financial statements -- The form of the statement of cash flows -- The normal direction of cash flows -- Preparing the statement of cash flows -- Deducing net cash flows from operating activities -- Deducing the other areas of the statement of cash flows -- What does the statement of cash flows tell us? -- Problems with IAS 7 -- Summary -- Key terms -- Reference -- Further reading -- Review questions -- Exercises -- 7. Analysing and interpreting financial statements -- Introduction -- Learning outcomes -- Financial ratios -- Financial ratio classifications -- The need for comparison -- Past periods -- Similar businesses -- Planned performance -- Calculating the ratios -- A brief overview -- Profitability -- Return on ordinary shareholders' funds (ROSF) -- Return on capital employed (ROCE) -- Operating profit margin -- Gross profit margin -- Efficiency -- Average inventories turnover period -- Average settlement period for trade receivables -- Average settlement period for trade payables -- Sales revenue to capital employed -- Sales revenue per employee -- Relationship between profitability and efficiency -- Liquidity -- Current ratio -- Acid test ratio -- Cash generated from operations to maturing obligations ratio -- Financial gearing -- Gearing ratio -- Interest cover ratio -- Investment ratios -- Dividend payout ratio -- Dividend yield ratio -- Earnings per share -- Cash generated from operations per share -- Price/earnings (P/E) ratio -- Financial ratios and the problem of overtrading -- Trend analysis -- Using ratios to predict financial failure -- Using single ratios -- Using combinations of ratios -- Z score models -- Limitations of ratio analysis -- Summary -- Key terms -- References -- Further reading -- Review questions -- Exercises -- pt. 2 Management accounting -- 8. Relevant costs for decision making -- Introduction -- Learning outcomes -- What is meant by ̀cost'? -- Relevant costs: opportunity and outlay costs -- Sunk costs and committed costs -- Qualitative factors of decisions -- Using relevant costs as a basis for setting prices -- Summary -- Key terms -- Further reading -- Review questions -- Exercises -- 9. Cost-volume-profit analysis -- Introduction -- Learning outcomes -- Cost behaviour -- Fixed cost -- Variable cost -- Semi-fixed (semi-variable) cost -- Estimating semi-fixed (semi-variable) cost -- Finding the break-even point -- Contribution -- Contribution margin ratio -- Margin of safety -- Achieving a target profit -- Operating gearing -- Operating gearing and its effect on profit -- Profit-volume charts -- The economist's view of the break-even chart -- Failing to break even -- Weaknesses of break-even analysis -- Using contribution to make decisions: marginal analysis -- Pricing/assessing opportunities to enter contracts -- The most efficient use of scarce resources -- Make-or-buy decisions -- Closing or continuation decisions -- Summary -- Key terms -- Further reading -- Review questions -- Exercises -- 10. Full costing -- Introduction -- Learning outcomes -- Why do managers want to know the full cost? -- What is full costing? -- Single-product businesses -- Multi-product businesses -- Direct and indirect cost -- Job costing -- Full (absorption) costing and the behaviour of cost -- The problem of indirect cost -- Overheads as service renderers -- Job costing: a worked example -- Selecting a basis for charging overheads -- Segmenting the overheads -- Dealing with overheads on a cost centre basis -- Batch costing -- Full (absorption) cost as the break-even price -- The forward-looking nature of full (absorption) costing -- Using full (absorption) cost information -- Full cost (cost-plus) pricing -- Price makers and price takers -- Use of cost-plus information by price takers -- Criticisms of full (absorption) costing -- Full (absorption) costing versus variable costing -- Which method is better? -- Summary -- Key terms -- Further reading -- Review questions -- Exercises -- 11. Costing and performance evaluation in a competitive environment -- Introduction -- Learning outcomes --
  • Contents note continued: Cost determination in the changed business environment -- Costing: the traditional way -- Costing: the new environment -- Cost management systems -- The problem of overheads -- Taking a closer look -- Activity-based costing -- Attributing overheads -- Benefits of ABC -- ABC versus the traditional approach -- ABC and service industries -- Criticisms of ABC -- Other costing approaches in the modern environment -- Total (or whole) life-cycle costing -- Target costing -- Costing quality control -- Kaizen costing -- Value chain analysis -- Benchmarking -- Non-financial measures of performance -- The balanced scorecard -- Measuring shareholder value -- The quest for shareholder value -- How can shareholder value be created? -- The need for new measures -- Economic value added (EVA®) -- Summary -- Key terms -- References -- Further reading -- Review questions -- Exercises -- 12. Budgeting -- Introduction -- Learning outcomes -- How budgets link with strategic plans and objectives -- Collecting information on performance and exercising control -- Time horizon of plans and budgets -- Limiting factors -- Budgets and forecasts -- Periodic and continual budgets -- How budgets link to one another -- How budgets help managers -- The budget-setting process -- Using budgets in practice -- Incremental and zero-base budgeting -- Preparing the cash budget -- Preparing other budgets -- Activity-based budgeting -- Non-financial measures in budgeting -- Budgets and management behaviour -- Who needs budgets? -- Beyond conventional budgeting -- Long live budgets! -- Summary -- Key terms -- References -- Further reading -- Review questions -- Exercises -- 13. Accounting for control -- Introduction -- Learning outcomes -- Budgeting for control -- Types of control -- Variances from budget -- Flexing the budget -- Sales volume variance -- Sales price variance -- Materials variances -- Labour variances -- Fixed overhead variance -- Reasons for adverse variances -- Variance analysis in service industries -- Non-operating-profit variances -- Investigating variances -- Compensating variances -- Making budgetary control effective -- Behavioural issues -- The impact of management style -- Failing to meet the budget -- Standard quantities and costs -- Setting standards -- Who sets the standards? -- How is information gathered? -- What kind of standards should be used? -- The learning-curve effect -- Other uses for standard costing -- Some problems... -- The new business environment -- Summary -- Key terms -- Reference -- Further reading -- Review questions -- Exercises -- pt. 3 Financial management -- 14. Making capital investment decisions -- Introduction -- Learning outcomes -- The nature of investment decisions -- Investment appraisal methods -- Accounting rate of return (ARR) -- ARR and ROCE -- Problems with ARR -- Payback period (PP) -- Problems with PP -- Net present value (NPV) -- Interest lost -- Risk -- Inflation -- What will logical investors do? -- Using discount tables -- Why NPV is better -- NPV's wider application -- Internal rate of return (IRR) -- Problems with IRR -- Some practical points -- Investment appraisal in practice -- Investment appraisal and strategic planning -- Dealing with risk -- Assessing the level of risk -- Reacting to the level of risk -- Managing investment projects -- Stage 1 Determine investment funds available -- Stage 2 Identify profitable project opportunities -- Stage 3 Evaluate the proposed project -- Stage 4 Approve the project -- Stage 5 Monitor and control the project -- Summary -- Key terms -- Reference -- Further reading -- Review questions -- Exercises -- 15. Financing a business -- Introduction -- Learning outcomes -- Sources of finance -- Sources of internal finance -- Long-term sources of internal finance -- Retained profits -- Short-term sources of internal finance -- Tighter credit control -- Reducing inventories levels -- Delaying payment to trade payables -- Sources of external finance -- Long-term sources of external finance -- Ordinary shares -- Preference shares -- Borrowings -- Finance leases and sale-and-leaseback arrangements -- Hire purchase -- Securitisation (asset-backed finance) -- Gearing and the long-term financing decision -- Share issues -- Rights issues -- Offers for sale and public issues -- Issue by tender -- Private placings -- Bonus issues -- The role of the Stock Exchange -- Advantages of a listing -- Disadvantages of a listing -- The Alternative Investment Market -- Short-term sources of external finance -- Bank overdrafts -- Debt factoring -- Invoice discounting -- Long-term versus short-term borrowing -- Providing long-term finance for the small business -- Venture capital -- Business angels -- Government assistance -- Summary -- Key terms -- References -- Further reading -- Review questions -- Exercises -- 16. Managing working capital -- Introduction -- Learning outcomes -- What is working capital? -- Managing working capital -- The scale of working capital -- Managing inventories -- Budgeting future demand -- Financial ratios -- Recording and reordering systems -- Levels of control -- Inventories management models -- Managing receivables -- Which customers should receive credit and how much should they be offered? -- Length of credit period -- Cash discounts -- Debt factoring and invoice discounting -- Credit insurance -- Collection policies and reducing the risk of non-payment -- Managing cash -- Why hold cash? -- How much cash should be held? -- Controlling the cash balance -- Cash budgets and managing cash -- Operating cash cycle -- Cash transmission -- Bank overdrafts -- Managing trade payables -- Controlling trade payables -- Working capital problems of the small business -- Managing inventories -- Credit management -- Managing cash -- Managing credit suppliers -- Summary -- Key terms -- Reference -- Further reading -- Review questions -- Exercises -- pt. 4 Supplementary information -- Appendix A Recording financial transactions -- Introduction -- Learning outcomes -- The basics of double-entry bookkeeping -- Recording trading transactions -- Balancing accounts and the trial balance -- Preparing the financial statements (final accounts) -- The ledger and its division -- Summary -- Key terms -- Further reading -- Exercises -- Appendix B Glossary of key terms -- Appendix C Solutions to self-assessment questions -- Appendix D Solutions to review questions -- Appendix E Solutions to selected exercises -- Appendix F Present value table
Control code
ocn685109465
Dimensions
27 cm
Edition
5th ed
Extent
xxviii, 828 p.
Isbn
9780273733201
Isbn Type
(pbk.)
Other physical details
col. ill.
System control number
(OCoLC)685109465

Library Locations

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