How Come You Don't Understand Your Accountant? (If You're So Brilliant) - Softcover

Cinnamon, Bob

Softcover

ISBN 10: 0749437251 ISBN 13: 9780749437251

Publisher: Kogan page, 2002

Synopsis

A guide to finance from the perspective of the pursuit of business growth. How Come You Don't Understand Your Accountant? uses the mechanism of a business proceeding from initial set-up through its first year of trading. Topics include: the balance sheet; market dynamics; budgeting and forecasting; fixed and variable costs; and more.

About this title

About the Author

Bob Cinnamon is an educator with a global reputation. As a director of the international training and consultancy firm, INSIGHT Marketing and People, Bob runs his popular masterclass and in-company training programme, Demystifying Financial Management, that has helped hundreds of managers and company directors from small and medium-sized businesses to major multi-nationals. Operating in some 30 countries, current clients include AstraZeneca, Avecia, BP, BT, Dow Corning, Dulux, DuPont, Glaxo SmithKline, Huntsman, ICI, JD Edwards, Pfizer, PPG, Qiagen and RoyalSunAlliance.

From the Back Cover

Even those with the most brilliant of business brains don t understand their accountants. But no doubt you wish you could! How many tomes on financial management have you waded through trying to get to grips with the concepts and language? Well, here is a book unlike any of them.

Firstly, this practical guide is not written by accountants. Secondly, it is based on a unique business simulation (as used by Harvard Business School), which follows a new business from initial set up through its first year of trading. It gives you a quick and effective crash course in the various stages of business growth. Along the way you are introduced to all the key financial principles, models and procedures so you ll be able to understand:

what management accounts reveal (and hide);
the difference between cash and profit;
how to use financial ratios to measure business performance;
the principles of market dynamics;
financial measures for improving business performance;
how to set budgets and evaluate projects.

It s not the aim of this book to turn you into a financial expert, but armed with an understanding of the basics and just enough of the detail, it will ensure that you can at last understand your accountant.

Excerpt. © Reprinted by permission. All rights reserved.

1 So why do you want to know more about finance?

Learning

A tale of two languages

2 The business cycle

Setting up a company

The Moving Balance Sheet®

Creating value

Cash and profit

Setting up and running the business -- the opening month

Profit and loss (P&L) account

The balance sheet

Month 2 business cycle

Going to the bank

Doing the books

3 The books and double entry bookkeeping

Reports

Double entry bookkeeping

Taxation

4 Where do all the business functions fit in?

Sales

Marketing

Manufacturing

Supply chain management

Human resources

IT, maintenance and engineering

Research and development

5 Financial planning -- the budgets

Budgeting

Cash flow forecast

Avoiding bankruptcy -- how to generate cash

6 Measuring business performance -- financial ratios

Size

P&L account (income statement) analysis

Balance sheet analysis

7 How our investors see us -- stock market ratios

What accounts do our investors want to see?

Shares

8 Valuing a company

Asset value

Multipliers

Market capitalization

Balanced scorecard

Cash flows

9 Shareholder value and economic profit

Earnings before interest, tax, depreciation and amortization (EBITDA)

Economic profit

Total shareholder return (TSR)

10 The hidden costs -- depreciation and amortization

Depreciation

Goodwill

Intangible assets

Capitalizing costs

Earnings before interest, tax, depreciation and amortization (EBITDA)

11 What must we sell to make a profit?

Variable costs

Fixed costs

Break-even point

12 Tools for evaluating projects

Payback

Discounted cash flow (DCF)

Net present value (NPV)

Internal rate of return (IRR)

Terminal values

Economic profit

Pitfalls

Other factors

13 Where is all our cash? -- managing working capital

Stock (inventories)

Debtors

Creditors

Write-offs

Cash flow implications of working capital

14 Next Steps

Training

Contact details

15 Glossary of financial terms

Edition details

• Publisher: Kogan page
• Publication date: 2002
• Language: English
• ISBN 10: 0749437251
• ISBN 13: 9780749437251
• Binding: Paperback
• Edition number: 1
• Number of pages: 190