Features
Press Extracts
Figures
Preface
Acknowledgements
Guided Tour
Online Learning Centre (OLC)

1 Accounting – the building blocks
Learning objectives
Introduction
What is accounting, and its uses and purposes?
The framework of accounting
Financial accounting, management accounting and financial management
Types of business entity
An introduction to financial statement reporting
Users of accounting and financial information
Summary of key points
Questions
Discussion points
Exercises

2 The balance sheet
Learning objectives
Introduction
Capital and expenditure and revenue expenditure
What does the balance sheet tell us?
Structure of the balance sheet
Capital and reserves or shareholders’ equity
Liabilities
Assets
Balance sheet formats
Valuation of assets
Summary of key points
Questions
Discussion points
Exercises

3 The profit and loss account
Learning objectives
Introduction
What does the profit and loss account tell us?
What is profit?
Structure of the profit and loss account
Profit and loss account formats
Profit and loss and the balance sheet
Depreciation
Cost of sales
Bad and doubtful debts
Profit and loss and cash flow
Summary of key points
Questions
Discussion points
Exercises

4 The cash flow statement
Learning objectives
Introduction
What does the cash flow statement tell us?
Structure of the cash flow statement
Direct and indirect cash flow
Cash flow statement formats
Cash flow links to the balance sheet and profit and loss account
Summary of key points
Questions
Discussion points
Exercises

5 Business performance analysis
Learning objectives
Introduction
Why are accounts filed and published?
Operating and financial review (OFR)
Accounting policies
Financial highlights
Ratio analysis
The best performance measure – cash or profit?
Trend analysis
Non-financial performance indicators
The balanced scorecard
Summary of key points
Questions
Discussion points
Exercises

6 Corporate governance
Learning objectives
Introduction
Corporate social responsibility (CSR) reporting
Directors’ report
Corporate governance code of practice
The audit and the role of auditors
Directors’ responsibilities
Insolvency
Wrongful trading
Fraudulent trading
Disqualification of directors
Summary of directors’ obligations and responsibilities
Actions to ensure compliance
Summary of key points
Questions
Discussion points
Exercises

7 Types of cost and their behaviour
Learning objectives
Introduction
Management accounting concepts
The nature of costs
Cost allocation and cost apportionment
Absorption costing
Marginal costing
Absorption costing versus marginal costing
Activity based costing (ABC)
Summary of key points
Questions
Discussion points
Exercises

8 Cost analysis and decision-making
Learning objectives
Introduction
Cost/volume/profit (CVP) relationships and break-even analysis
Limitations of CVP analysis
Multiple product break-even analysis
The scope of decision-making
The decision-making process
Relevant costs
Shut-down or continuation decisions
Make versus buy
Product mix decisions and limiting factors
Summary of key points
Questions
Discussion points
Exercises

9 Budgeting, planning and control
Learning objectives
Introduction
Why do we budget?
Forecasting and planning
The budget process
Performance evaluation and control
Motivation and the behavioural aspects of budgeting
Standard costing
Flexed budgets
Variance analysis
The reasons for variances
Summary of key points
Questions
Discussion points
Exercises

10 Investment decisions
Learning objectives
Introduction What is an investment?
Investment appraisal criteria
Advantages and disadvantages of the five investment appraisal methods
Other factors affecting investment decisions
Risk and uncertainty and decision-making – sensitivity analysis
Summary of key points
Questions
Discussion points
Exercises

11 Financing the business
Learning objectives
Introduction
Sources of short-term finance
Sources of long-term finance
Stock Exchange listing
UK Government and European funding
Gearing
The cost of financing and WACC
Summary of key points
Questions
Discussion points
Exercises

12 Management of working capital
Learning objectives
Introduction
Working capital and working capital requirement
Working capital policy
Stocks management
Debtors and credit management
Creditors management
Operating cycle performance
Cash improvement and cash management
Summary of key points
Questions
Discussion points
Exercises

Appendices

1 Case studies
Case Study I Buzzard Ltd
Case Study II Design Pierre Ltd
Case Study III Mouldal Ltd
Case Study IV Arthurstone
Case Study V Computacore Ltd

2 Present value tables

3 Solutions to selected exercises

Glossary of key terms
Index