The Essentials of Finance and Accounting for Nonfinancial Managers
Edward Fields
Language: English
Pages: 320
ISBN: 0814416241
Format: PDF / Kindle (mobi) / ePub
As a department manager, the last thing you want to think about is numbers. But the truth is, that's the only thing your executives and senior managers are thinking about so it's crucial to understand key financial information like balance sheets, income statements, cash flow statements, budgets and forecasts, and annual reports. With over 40,000 copies sold, "The Essentials of Finance and Accounting for Nonfinancial Managers" has long provided readers with insight into the financial fundamentals. It demystifies the role accounting and finance play in a corporation, demonstrates how financial decisions reflect business goals, and shows how managers can connect corporate financial information directly to their own strategies and actions. Now revised to reflect new accounting and financial standards, the second edition includes: strategies for getting your share of the budget; new case studies and practice sessions; an explanation of Sarbanes-Oxley and its relevance to nonfinancial managers; how to manage cash flow in tough times; fraud detection tools; and, an expanded glossary including up-to-the-minute business concepts and terminology.
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fluctuate in accordance with market conditions. As it gets closer to maturity, the bond price will gravitate toward its face amount. A U.S. savings bond is a form of zero-coupon bond. Index absorption accounting, 194–196 accounting, 12 absorption, 194–196 definition of, 10 fair value, 89–90 for fixed assets, 33–37 and forecasting, 13, 228 for inventory, 37–39 significant issues in, 86–90 accounts payable on balance sheet, 39 on statement of cash flows, 73 accounts receivable aging
loss statement (P&L), 60, see also income statement profit centers allocating overhead to, see overhead allocations measuring, see return on assets (ROA) proxy statement, 102, 110, 115–116, 118 public companies, 92 public relations, 96–98 public statements, liability for, 88–89 purchased components on balance sheet, 50–51 and inventory turnover ratio, 137–139 qualified opinion (audit), 105 quantifiable items or transactions, 85 quick ratio, 128–129 ratios, 22, 123–156 definition
sometimes even a change in management. For a long-term perspective on this movement, every businessperson should know about the Gilbert brothers, John and Lewis (discussed below). The Gilbert Brothers: The Original Shareholder Activists Background If you saw the movie Wall Street, you saw Michael Douglas as Gordon Gekko browbeat the board of directors of a multinational company because the directors were arrogant and detached from the needs of the stockholders and the company. They were making
on hand, on average. Of course, determining the appropriate amount of inventory for a company is much more complex than calculating this ratio, however valuable the ratio may be. The cost of inventory includes the following: Acquisition cost Transportation in and out Insurance Personal property taxes Warehouse overhead Labor expense Computer and related expenses Interest expense Physical deterioration Seasonal obsolescence The cost of not having enough inventory or of having the wrong inventory
Metropolitan Manufacturing Company Financial Leverage Ratios Debt/Equity: Metropolitan’s debt/equity ratio is very low. A ratio below 50 percent would probably be perceived as comfortable. Also, notice that Metropolitan paid off $50,000 in long-term debt. We know that this was voluntary because, by definition, long-term debt is not due in the upcoming year. Not only is low debt a favorable condition from a risk perspective, but the lenders will look upon reinvested net income as a very positive
