Accounting and Finance for Non-Specialists 11th edition

Front Cover
Half Title Page
Title Page
Copyright Page
Brief Contents
Contents
Preface
Acknowledgements
1 Introduction to accounting and finance
	Introduction
	What are accounting and finance?
	Who are the users of accounting information?
	Providing a service
	Weighing up the costs and benefits
	Accounting as an information system
	Management accounting and financial accounting
	Scope of this book
	The changing face of accounting
	Why do I need to know anything about accounting and finance?
	The quest for wealth creation
	Meeting the needs of other stakeholders
	Balancing risk and return
	Not-for-profit organisations
	Summary
	Key terms
	Reference
	Further reading
	Critical review questions
Part One FINANCIAL ACCOUNTING
	2 Measuring and reporting financial position
		Introduction
		The major financial statements – an overview
		The statement of financial position
		The effect of trading transactions
		Classifying assets
		Classifying claims
		Statement layouts
		Capturing a moment in time
		The role of accounting conventions
		Money measurement
		Valuing assets
		Meeting user needs
		Summary
		Key terms
		Reference
		Further reading
		Critical review questions
		Exercises
	3 Measuring and reporting financial performance
		Introduction
		The income statement
		Different roles
		Income statement layout
		Further issues
		Recognising revenue
		Recognising expenses
		Depreciation
		Costing inventories
		Trade receivables problems
		Uses and usefulness of the income statement
		Summary
		Key terms
		Further reading
		Critical review questions
		Exercises
	4 Accounting for limited companies
		Introduction
		The main features of limited companies
		The role of the Stock Exchange
		Managing a company
		The UK Corporate Governance Code
		Financing limited companies
		Borrowings
		Withdrawing equity
		The main financial statements
		Dividends
		Additional financial statements
		The directors’ duty to account
		The need for accounting rules
		Sources of accounting rules
		The auditors’ role
		Management commentary
		Creative accounting
		Summary
		Key terms
		Further reading
		Critical review questions
		Exercises
	5 Measuring and reporting cash flows
		Introduction
		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 layout of the statement of cash flows
		The normal direction of cash flows
		Preparing the statement of cash flows
		What does the statement of cash flows tell us?
		Summary
		Key terms
		Further reading
		Critical review questions
		Exercises
	6 Analysing and interpreting financial statements
		Introduction
		Financial ratios
		Financial ratio classifications
		The need for comparison
		Calculating the ratios
		A brief overview
		Profitability
		Efficiency
		Relationship between profitability and efficiency
		Liquidity
		Financial gearing
		Investment ratios
		Trend analysis
		Using ratios to predict financial failure
		Limitations of ratio analysis
		Summary
		Key terms
		Further reading
		Critical review questions
		Exercises
Part Two MANAGEMENT ACCOUNTING
	7 The relevance and behaviour of costs
		Introduction
		What is meant by ‘cost’?
		Relevant costs: opportunity and outlay costs
		Cost behaviour
		Fixed cost
		Variable cost
		Semi-fixed (semi-variable) cost
		Finding the break-even point
		Contribution
		Margin of safety
		Operating gearing and its effect on profit
		Weaknesses of break-even analysis
		Using contribution to make decisions: marginal analysis
		Summary
		Key terms
		Further reading
		Critical review questions
		Exercises
	8 Full costing
		Introduction
		What is full costing?
		Why do managers want to know the full cost?
		Single-product businesses
		Multi-product businesses
		Overheads as service renderers
		Activity-based costing
		Using full (absorption) cost information
		Summary
		Key terms
		Further reading
		Critical review questions
		Exercises
	9 Budgeting
		Introduction
		How budgets link with strategic plans and objectives
		Time horizon of plans and budgets
		How budgets help managers
		Budgets and forecasts
		Limiting factors
		How budgets link to one another
		Using budgets in practice
		Preparing budgets
		Non-financial measures in budgeting
		Budgeting for control
		Measuring variances from budget
		Making budgetary control effective
		Behavioural issues
		The use of variance analysis
		Summary
		Key terms
		Further reading
		Critical review questions
		Exercises
Part Three FINANCE
	10 Making capital investment decisions
		Introduction
		The nature of investment decisions
		Investment appraisal methods
		Accounting rate of return (ARR)
		Payback period (PP)
		Net present value (NPV)
		Why NPV is better
		Internal rate of return (IRR)
		Some practical points
		Investment appraisal in practice
		Investment appraisal and strategic planning
		Summary
		Key terms
		Further reading
		Critical review questions
		Exercises
	11 Financing a business
		Introduction
		The main objective of financing policy
		Sources of finance
		Internal sources of finance
		Internal sources of long-term finance
		Internal sources of short-term finance
		External sources of finance
		External sources of long-term finance
		Forms of borrowing
		External sources of short-term finance
		Long-term versus short-term borrowing
		Gearing and the financing decision
		Share issues
		The role of the Stock Exchange
		The Alternative Investment Market
		Providing long-term finance for the small business
		Islamic finance
		Summary
		Key terms
		References
		Further reading
		Critical review questions
		Exercises
	12 Managing working capital
		Introduction
		What is working capital?
		The scale of working capital
		Managing inventories
		Managing trade receivables
		Managing cash
		Managing trade payables
		Managing working capital
		Summary
		Key terms
		Further reading
		Critical review questions
		Exercises
Appendix A: Glossary of key terms
Appendix B: Solutions to self-assessment questions
Appendix C: Solutions to critical review questions
Appendix D: Solutions to selected exercises
Appendix E: Present value table
Index
Back Cover