Advanced Financial Accounting for Non-Accountants (London)

Course Contents, Concepts and Issues:

The Strategic View of Business Environment

The Accounting Environment

• The Uses and Purpose of Accounting
• Users of Accounting and Financial Information
• Various Groups of Stakeholders: Internal and External Users
• Accounting Language and Terminology
• Cash versus Profit, Accruals and Monetary Concepts
• Profit and Profitability
• Accounting Reports and Statements

Statement 1: The Balance Sheet – The Financial Position

• The Structure of the Balance Sheet
• What Does The Balance Sheet Tell Us About The Company?
• Limitations of the Conventional Balance Sheet

Statement 2: The Profit And Loss Account (Income Statement) – Financial Performance

• What Is Profit?
• The Structure of the Profit and Loss Account
• What Does The Profit And Loss Account Tell Us About The Company?
• The Links between the Profit and Loss Account and Balance Sheet

The Financial Statement and the Financial Analysi

Statement 3: The Cash Flow Statement – Financial Flow

• Cash vs. Profit
• What Is Included In The Cash Flow Statement?
• Why Is Cash Flow So Important?
• The Structure of the Cash Flow Statement
• The Links between Three Accounting Statements: The Cash Flow Statement, Profit and Loss
• Account and Balance Sheet

The Annual Report and Financial Analysis

• The Key Elements of Published Reports and Accounts
• Ratio Analysis: Profitability; Efficiency and Performance; Liquidity; Investment; Cash Flow; the DuPont System
• Cash vs. Profit as a Measure of Performance, EBITDA
• Predicting Business Failure – The Altman Z-Score
• Sources of Financial Information
• The Use of Non-Financial Information Together With Financial Information

Budgeting and Short-term Planning

Break-Even Analysis: Cost/Volume/Profit Analysis

• Cost/Volume/Profit (CVP) Relationships
• Break-Even Analysis
• Single And Mixed Products
• The Impact of Cost Structure Changes
• Limitations of CVP Analysis

Budgeting

• Purposes of Budgeting
• The Budget Process, Including Activity Based Budgeting
• Uncertainty and Risk – Worst and Best Outcomes
• Motivation and the Behavioural Aspects of Budgeting
• Problems in Budgeting

Budgetary Control and Long-Term PLanning DCF and Capital Investment Appraisal

Capital Investment Decisions

• What Is An Investment?
• Investment Appraisal Criteria and Investment Decisions
• Time Value of Money
• Free Cash Flows
• Capital Rationing and Control of Capital Investment Projects
• Risk and Uncertainty and Decision-Making – Sensitivity Analysis

Budgetary Control

• Organisational and Accounting Control Systems
• Standard Costing
• Flexed Budgets and Variance Analysis
• Types of Variances and the Reasons They Occur
• Planning and Operational Variances

Financing the Business and Strategic Accounting

Internal and External Sources of Finance

• Financing the Business
• Sources of Finance
• Gearing
• Weighted Average Cost of Capital (WACC)
• Cost of Debt and Equity Capital
• Risk Analysis and CAPM
• Strategic Accounting
• Outline of Strategic Management Accounting
• Competitor Information and Strategic Positioning
• Competitive Advantage
• Strategic Accounting Systems, and the Balanced Scorecard
• New Role for Managers and Accountants