TITLE : FAST FORWARD MBA IN FINANCE, THE.

 
PART I  FINANCIAL STATEMENTS FOR MANAGERS
 
    CHAPTER 1 - GETTING DOWN TO BUSINESS   3
     Accounting System Oveview      3
     The Internal Functions         4
     The External Functions         4
     External Financial Reports   6
     A Word about Accounting Methods  7
     End Point                      8
 
    CHAPTER 2 - EXTERNAL FINANCIAL STATEMENTS-WHAT THE WORLD
                KNOWS ABOUT YOUR COMPANY        11
 
     Measuring Profit: The Income Statement 11
     Measuring Cash Flow: The Cash Flow
     Statement                 14
     Measuring Financial Health: The Balance
     Sheet                     15
     End Point                      16
 
    CHAPTER 3 - INCOME STATEMENT FOR MANAGERS       17
 
     Information for Managers       17
     Gross Margin: The First Line of Profit 18
     Variable Operating Expenses    22
     Fixed Expenses                 23
     From Operating Earnings (EBIT)
     to the Bottom Line        24
     End Point                      24
 
   CHAPTER 4 - FINANCIAL CONDITION AND CASH FLOW STATEMENTS FOR
               MANAGERS                       27
     Where Does the Balance Sheet Come From? 27
     Balance Sheet for Managers    28
     Operating Assets and Liabilities 29
     Sources of Capital (to Finance Net Operating Assets)      33
     Cash Flow Statement for Managers 35
     Cash Flow from Profit (Operating Activities)    35
     Depreciation: More than an Add-Back  38
     Other Cash Sources and Uses 40
     End Point                    41
 
PART 2   MANAGEMENT ANALYSIS
 
   CHAPTER 5-OPERATING RATIOS: INDISPENSAPLE BENCHMARKS       45
 
     Connections between the Income Statement and the Balance Sheet
45
     Operating Ratios and Relationships     45
     Accounts Receivable<--Sales Revenue    47
     Inventory<--Cost-of-Goods -Sold Expense     48
     Prepaid Expenses<--Operating Expenses (Except Depreciation)
49
     Sales Revenue(-4Property, Plant, and Equipment             50
     Depreciation Expense<-Property, Plant, and Equipment       50
     Accounts Payable: Inventory+-Inventory 51
     Accounts Payable: Operating
     Expenses<--Operating Expenses (Except Depreciation)     52
     Accrued Expenses: Operating Expenses<--Operating Expenses
     (Except Depreciation)     52
     Accrued Expenses: Interest<--
     Interest Expense          53
     Income Tax Payable<--Income Tax Expense 54
     Sales Revenue<-4Cash          54
     Sales Revenue<-4Assets        55
     Solvency Ratios               56
     End Point                     57
 
   CHAPTER 6 - EVALUATING BUSINESS INVESTMENT PERFORMANCE         59
 
     Return on Investment (ROI)    59
     The Pivotal Role of Income Tax  62
     The Nature of Return on Equity (ROE)   63
     Financial Leverage            65
     Achieving ROE Goal            67
     End Point                     69
     Postscript                    69
     Income Tax: Not So Simple   69
     Balance Sheet versus Other Values for Debt and Equity       70
 
   CHAPTER 7 - CAPITAL NEEDS OF GROWTH                      73
 
     Growth and ROE                73
     Planning for Growth           73
     Developing the Master Budget  76
     Key Budgeting Assumptions   76
     Is the Budget Feasible?       80
     Capital Turnover Analysis     80
     End Point                     83
 
   CHAPTER 8 - BREAKING EVEN AND MAKING PROFIT              85
 
     How Did They Do That?         85
     Fixed Costs                   86
     Fixed Operating Expenses versus Depreciation Expense     86
     Owner/Manager Salaries and Other Expenses     88
     What about Interest Expense?  89
     Computing Operating Profit    89
     The Breakeven Hurdle          89
     Using Breakeven Volume to Compute Profit    91
     The Third Way to Compute Profit  93
     Margin of Safety              94
     End Point                     94
 
   CHAPTER 9 - SALES VOLUME CHANGES 97
 
     The Business Environment: Constant Change    97
     Sales Volume Increases         98
     Operating Leverage             100
     What about Cash Flow?          101
     Sales Volume Decreases         104
     End Point                      107
 
   CHAPTER 1O - SALES PRICE AND COST CHANGES      109
 
     Sales Price Increases          109
     Cash Flow at Higher Sales Price  112
     Sales Price Decreases          113
     Changes in Product Cost and Operating Expenses 116
     End Point                    119
 
   CHAPTER 11 - PRICE-VOLUME TRADE-OFFS       121
 
     Introduction        121
     Ten Percent Sales Price Reduction to Generate
     Ten Percent Volume Increase      121
     A Special Case: Sunk Product Costs     124
     Decrease in Cash Flow at Lower Sales
     Price and Higher Sales Volume 125
     Sales Volume Increase Needed to Just Keep Even         125
     Giving Up Ten Percent Sales Volume for
     Ten Percent Sales Price Increase   128
     End Point                   130
 
   CHAPTER 12 - COST-VOLUME TRADE-OFFS     133
 
     Product Cost Increases: Which Kind?    133
     Variable Cost Increases and Sales Volume 135
     Better Product and Service Leading to Higher Sales Price
137
     Decreases in Product Cost and Variable
     Expenses Causing Sales Volume Decreases    140
     Subtle and Not-So-Subtle Changes in
     Fixed Operating Expenses 141
     End Point                    141
 
   CHAPTER 13 - SURVIVAL ANALYSIS: TURNING LOSS INTO PROFIT      143
 
     When Things Go Wrong         143
     Profile of a Loser           143
     First: Some Questions about Fixed Expenses                 144
     What's the Problem?          146
     Improving Unit Contribution Margin     148
     End Point                    149
 
   CHAPTER 14 - SERVICE BUSINESS  151
 
     Different, Yet the Same      151
     Service Business Example     151
     Ten Percent Changes          153
     Cash Flow Changes            159
     Trade-off Decisions: Be Careful  159
     End Point                    161
 
   CHAPTER 15 - SALES MIX AND COST ALLOCATION     165
 
     Sales Mix Analysis           166
     Fixed Expenses; Allocate or Not? 169
     Fixed Manufacturing Overhead Cost Allocation               172
     End Point     175
 
PART 3   MANAGEMENT CONTROL
 
   CHAPTER 16 - MANAGEMENT CONTROL AND BUDGETING     179
 
     Thrust of Management Control: Follow-through on Decisions     179
     Management Control Information  180
     The Foundation: Internal Accounting Controls  183
     The Cash Flow Statement: A Tool for Fraud Detection          184
     Guidelines for Management Control Reporting                185
     Need for Comparative Reports   185
     Frequency of Control Reports   186
     Profit Control Reports,    186
     Financial Condition and CAsh Flow
     Control Reports          187
     Investment Performance Measures in
     Control Reports          188
     Brief Overview of Budgeting  188
     The Frustrating Fringe of Profit Robbers    191
     Sales Price Negatives      191
     Product Cost dnd Variable Expense
     Negatives                192
     Sales Volume Negatives     194
     Excess Capacity: A Ticking
     Downsizing Time Bomb?    195
     End Point                    196
 
   CHAPTER 17-MANUFACTURING ACCOUNTING                    199
 
     So, You're Not a Manufacturer 199
     Product Makers versus Product
     Resellers                199
     Basic Manufacturing Costs and Company
     Example                  200
     Computation of Unit Product Cost  201
     Deliberate Misclassification of
     Manufacturing Costs         203
     Idle Production Capacity     205
     Manufacturing Inefficiencies 208
     Excessive Production         209
     End Point                    212
 
 
PART 4   CAPITAL INVESTMENT
 
   CHAPTER 18 - DETERMINING FUTURE RETURNS FOR CAPITAL INVESTMENT 215
 
     Macro versus Micro Business Investment
     Analysis      215
     Capital Investment Example   216
     Analysis of the Investment       217
     Determining Future Returns to Earn
     Target ROE               221
     Lease versus Buy             223
     End Point                    224
 
   CHAPTER 19 - DISCOUNTING FUTURE RETURNS FROM CAPITAL INVESTMENT
227
 
     Spreadsheet versus Mathematical
     Analysis of Capital Investments    227
     The Basic Equation of Mathematical
     Techniques               228
     Discounted Cash Flow (DCF)   229
     One Period, One Future Return  229
     Two Periods, Two Future Returns 230
     Two Periods, One Future Return 231
     Net Present Value (NPV) and Internal
     Rate of Return (IRR)         233
     Cash Registers Investment Example Revisited    235
     Regarding the Cost-of-Capital
     Parameters               237
     End Point                    237
 
    APPENDIX A - GLOSSARY OF KEY TERMS,
                 WITH MANAGEMENT COMMENTARY    239
 
    APPENDIX B- TOPICAL GUIDE TO FIGURES      255
 
    INDEX                         257