Managing Finance, 4^th Ed.

Managing Resources for the Market -- Block 6

The Open University

Publisher: The Open University, 1998

ISBN: 0-7492-9265-2

Synopsis:

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Table of Contents:

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• Session 1 Financial Statements
• 1.1 Accounting Statements and Reports
• Financial reporting requirements
• The profit and loss statement
• The balance sheet
• The cash flow statement
• 1.2 Accounting Concepts
• 1.3 Interpreting Accounting Information
• Session 2 Accounting Systems
• 2.1 Accounting Objectives
• 2.2 Requirements of Accounting Information Systems
• 2.3 Developments in Computing
• Information as a resource
• Perceptions of information systems practices
• 2.4 Decision Support Systems
• Session 3 Working Capital Management
• 3.1 Cash Management
• 3.2 Cash Cycles
• 3.3 Working Capital Management
• 3.4 The Management of Current Assets
• Stock control
• Debtor control
• 3.5 The Management of Current Liabilities
• Session 4 Budgeting
• Introduction
• Providing a framework for planning
• Resource allocation
• Financial monitoring and control
• Accountability
• Motivation
• Performance management
• 4.1 Planning and Forecasting
• The budget as a forecasting model
• 4.2 The Budget as a Means of Allocation of Financial Resources
• The master budget
• Time horizon
• The limiting factor
• Flexible budgeting
• 4.3 The Budget as a Measure of Performance
• 4.4 Standard Costing
• What is a standard cost?
• Types of standards
• 4.5 Accountability and Control
• 4.6 Motivation
• Budget games
• Session 5 Performance Measurement
• 5.1 Interpreting Financial Information
• Slecting management ratios
• 5.2 Standards of Comparison
• Internal comparision
• External comparisions
• 5.3 Investment Ratios
• Earnings per share (EPS)
• Price/earnings (P/E) ratio
• Dividend yield
• Dividend cover
• 5.4 Determining Organizational Performance
• 5.5 Divisional Performance Measurement
• Problems with ROI
• 5.6 Value For Money
• Measurement
• Objectives
• Implications of a VFM approach
• Vision
• Strategy
• Structure
• Systems
• Style
• Skills and staffing
• 5.7 Financial Performance in Service Industries
• 5.8 Financial Performance in the Public and Voluntary Sectors
• Session 6 Decision Making
• 6.1 The Decision-making Process
• Planning and operating information
• Management accounts and operating statements
• 6.2 Strategic Decision Making
• 6.3 Managing Competitive Advantage
• 6.4 Using Cost Data in Decision Making
• Relevant and irrelevant costs
• How to find the contribution
• Break-even point
• Dropping a product line
• Make or buy decision
• Opportunity costs
• Using scarce resources
• Pricing goods and services
• Activity-based costing
• 6.5 Behavioural Factors in Decision Making
• Individual factors
• Session 7 Techniques of Capital Investment Appraisal
• 7.1 Capital Investment Appraisal
• 7.2 Appraisal Methods
• Payback period
• Accounting rate of return (ARR)
• Time value of money
• Discounted cash flows (DCF)
• Net present value (NPV)
• Difficulties using NPV
• Internal rate of return (IRR)
• 7.3 Practical Considerations
• Inflation
• Taxation
• Capital investment in practice
• Surveys of investment appraisal practices by UK companies
• The use of non-financial measures and the political process
• Case study
• Appendix A Discount and Annuity Tables
• Appendix B Block 6 Computing Disk Answers
• Introduction to spreadsheets
• Discounting approaches to investment appraisal
• Discount table: Present valuer of £100
• Net present value (NPV)
• Net present value analysis (using discount tables)
• Net present value analysis (using mathematical approach)
• Spreadsheet exercise
• Electric Wet-Shave Project
• Spreadsheet 1
• Spreadsheet 2
• Spreadsheet 3
• Spreadsheet 4
• Appendix C Ratio Analysis
• Accounting ratios
• Return on capital
• Asset utilization ratio
• Return on sales ratio
• Summary of other key ratios
• Creditors' turnover
• Current ratio
• Debtors' turnover
• Dividend yield
• Dividend cover
• Earnings per share
• Price/earnings ratio
• Quick ratio
• Stock turnover
• Appendix D The Changing face of Accountancy
• Appendix E Is There a ‘Correct’ Method of Investment Appraisal?
• Accounting rate of return
• Payback
• Discounting techniques — net present value
• Discounting techniques — internal rate of return
• Calculation is complex
• There may be multiple IRRs
• IRR is inappropriate if projects are mutually exclusive
• Discussion of techniques
• Conclusion