Finance and Accounting for Nonfinancial Managers

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  • Edition: 6th
  • Format: Paperback
  • Copyright: 2010-06-22
  • Publisher: Basic Books

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Packed with step-by-step examples and illustrative case studies and updated to reflect the latest changes in policy and the financial crisis of 2008-2009, Finance and Accounting for Nonfinancial Managers is a nuts-and-bolts guide for managers, entrepreneurs, seasoned executives, teachers, and students alike. Featuring new chapters on corporate governance, mergers and acquisitions, and international finance, as well as updated interactive templates, Power Point slides to accompany each chapter, and an instructor's guide on the Web, Finance and Accounting for Nonfinancial Managers covers all major aspects of financial management, including:

Author Biography

William G. Droms is Professor of Finance at the McDonough School of Business, Georgetown University, and Chairman of Droms Strauss Advisors, Inc. He lives in Annapolis, Maryland.

Jay Wright is the CEO of the Mobilepro Corporation and an adjunct professor at the McDonough School of Business, Georgetown University. He lives in Bethesda, Maryland.

Table of Contents

Prefacep. xiii
Contemporary Financial Managementp. 3
(R)evolution of the Finance Functionp. 3
Goals of Financial Managementp. 6
Organization and Structure of the Bookp. 7
Conclusionp. 9
Summaryp. 9
The Tax Environmentp. 12
Organizational Form and Taxesp. 12
Corporate Income Taxesp. 14
Personal Income Taxesp. 19
Subchapter S Corporationsp. 21
Summaryp. 22
Financial Accounting Fundamentals
Introduction to Financial Statementsp. 27
Objectives of Financial Accountingp. 27
The Auditor's Opinionp. 30
The Balance Sheetp. 33
Book Value of Securitiesp. 39
The Income Statementp. 41
Supplemental "Pro Forma" or "Operating" Earningsp. 44
Accumulated and Retained Earningsp. 44
Statement of Cash Flowsp. 45
Sarbanes-Oxley and Financial Statementsp. 47
Summaryp. 47
Accounting-A Financial Information Systemp. 50
The Accounting Processp. 50
The Accrual Conceptp. 50
Double-Entry Accountingp. 53
The Accounting Cyclep. 60
Summaryp. 66
Special Topics in Accountingp. 67
Changes in the Equity Accountp. 67
Depreciation Accountingp. 69
Inventory Accountingp. 74
Accounting for Leasesp. 79
Intercorporate Investmentsp. 80
Summaryp. 81
Financial Analysis and Control
Financial Statement Analysisp. 87
Objectives of Financial Statement Analysisp. 87
Ratio Analysisp. 88
Common-Size Statementsp. 95
Sequence of Analysisp. 96
Case Study: Technosystems, Inc.p. 97
Financial Analysis, Financial Fraud, and Financial Stressp. 103
Summaryp. 104
Financial Forecasting and Cash Budgetingp. 107
Objectives of Financial Forecastingp. 107
Short-Term Forecasts and Cash Budgetingp. 107
Financial Forecast for the Cutler Toy Companyp. 108
Long-Term Financial Planningp. 121
Summaryp. 124
Breakeven Analysis for Profit Planningp. 126
Assumptions of Breakeven Analysisp. 126
Breakeven Applicationsp. 127
The Breakeven Techniquep. 128
Breakeven Chartsp. 131
Nonlinear Breakeven Analysisp. 135
Summaryp. 136
Working Capital Decisions
Working Capital Policyp. 141
Importance of Working Capital Policyp. 141
Short-Term Versus Long-Term Financingp. 142
Relative Magnitude of Working Capital Investmentp. 147
Inventory Control Policyp. 149
Credit Policyp. 150
Accounts Payable Payment Policyp. 151
Summaryp. 152
Working Capital Managementp. 154
Management of Cash and Marketable Securitiesp. 154
Accounts Receivable Managementp. 158
Inventory Managementp. 161
Sources of Short-Term Financingp. 164
Summaryp. 169
Mathematical Derivation of Economic Order Quantityp. 170
Long-Term Investment Decisions
Mathematics of Compound Interestp. 175
Compound Interestp. 175
Present Valuep. 180
Present Value of an Annuityp. 181
Compound Value of an Annuityp. 183
Application to Personal Decision Makingp. 186
Summaryp. 189
Capital Budgetingp. 191
Paybackp. 191
Net Present Valuep. 192
Internal Rate of Returnp. 194
Profitability Indexp. 197
Selection of Methodp. 198
Dealing with Uncertaintyp. 200
Case Study: Droppitt Parcel Companyp. 201
Summaryp. 203
Cost of Capitalp. 205
Cost of Capital Definedp. 205
Marginal Cost and Capital Budgetingp. 207
Calculating the Average Cost of Capitalp. 208
The Capital Asset Pricing Modelp. 212
Capital Structure Managementp. 213
Summaryp. 215
Long-Term Financing Decisions
Valuation of Financial Assetsp. 221
Capitalization-of-Income Methodp. 221
Selecting Appropriate Capitalization Ratesp. 222
Bond Valuationp. 224
Preferred Stock Valuationp. 227
Common Stock Valuationp. 229
Summaryp. 234
Valuing Closely Held Businessesp. 236
Valuation Principlesp. 236
Revenue Ruling 59-60p. 236
Case Analysis: Valuing Home Medical Care, Inc.p. 239
Summaryp. 247
Sources and Forms of Long-Term Financingp. 250
The Money and Capital Marketsp. 250
Intermediate- and Long-Term Debtp. 251
Lease Financingp. 254
Preferred Stockp. 257
Common Stockp. 258
Dividend Policyp. 260
Summaryp. 264
Special Topics in Finance
Governance and Risk Managementp. 269
Basics of Corporate Governancep. 269
Directors' Fiduciary Dutiesp. 270
Daily Governance of the Corporationp. 271
Risk Managementp. 272
Summaryp. 274
International Financep. 276
Currenciesp. 276
Futures, Options, and Swapsp. 279
Money Marketsp. 281
Capital Marketsp. 282
Summaryp. 283
Mergers and Acquisitionsp. 284
A Brief History of Mergers and Acquisitionsp. 284
How Companies Can Work Togetherp. 285
How and Why to Do an Acquisitionp. 287
The Politics and Economics of Acquisitionsp. 289
LBOs, Hostile Takeovers, and Reverse M & Ap. 290
Summaryp. 293
Indexp. 295
Table of Contents provided by Ingram. All Rights Reserved.

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