Finance and Accounting for Business

Finance and Accounting for Business gives managers on executive or general MBA courses an overview of the role of accounting and finance in business, and it also suitable for undergraduate courses where students need an appreciation of accounting and finance. The book is illustrated with vivid cases, real-world examples and worked-through exercises, placing the theory of the subject in a practical context. It incorporates a wealth of question and exercise material using real company cases. Solutions are also provided in the text and on an extensive website full of further resources to support the text. Additional questions are also provided for tutors to use with their students, taking them through complex issues step by step.

Bob Ryan started his teaching career at the University of Manchester. He then established the Division of Business at the Hatfield Polytechnic (now the University of Hertfordshire), was the founding director of the Southampton University Management School and then Director of the School of Management, Royal Holloway, University of London. He has extensive consultancy experience both in the UK and internationally and currently holds the chair of financial management at the University of Gloucestershire and a visiting fellowship at the Manchester Business School. He is also examiner in Advanced Financial Management for the Association of Chartered Certified Accountants. Apart from all that, Bob Ryan has an international reputation as one of the worlds most outstanding educators of business managers, students and executives. It is this quality as a teacher that informs every page of Finance and Accounting for Business.

Preface	p. xi
Walk-through tour	p. xvi
Supplementary resources	p. xviii
Acknowledgements	p. xix
Introduction	p. 1
The role of accounting and finance in business	p. 3
Introduction	p. 3
The context and history of accounting and finance	p. 4
Different types of business organization	p. 9
Business objectives and the decision-oriented approach	p. 17
The purpose and characteristics of accounting information	p. 19
The concept of income and the measurement of profit	p. 24
The difference between financial and management accounting	p. 25
Financial accounting	p. 31
Introduction to financial accounting	p. 33
The first principles of financial accounting	p. 34
Creating the balance sheet and income statement û a case exercise	p. 43
The extended trial balance (ETB)	p. 47
Two further principles	p. 48
How to produce a set of simple accounts	p. 49
Building the accounts	p. 54
A case study in business start-up	p. 55
Accounting for the second and subsequent years	p. 61
Double-entry bookkeeping	p. 66
Cash flow statements	p. 81
Introduction	p. 81
The measurement of cash flow	p. 82
Preparing the cash flow statement	p. 84
Laundering the accounts	p. 92
Principles of financial accounting	p. 101
Introduction	p. 101
The principles of value creation and the matching principle	p. 102
Accounting for real assets: depreciation and inventories	p. 108
Extending your understanding of the principles of accounting	p. 126
Accounting for companies	p. 139
Introduction	p. 139
The characteristics of limited companies	p. 140
How limited companies are created	p. 147
Group companies û acquisition and mergers	p. 154
Becoming a public limited company	p. 167
The analysis of accounting information	p. 174
Introduction	p. 174
The analysis of financial information	p. 175
Financial analysis	p. 184
Completing the narrative	p. 210
Appendix to Chapter7	p. 218
Management accounting and control	p. 223
The principles of cost and revenue measurement	p. 253
Introduction	p. 235
Basic principles of costing	p. 236
Costing for decisions: relevant costing	p. 242
Cost behaviour and cost/volume/profit analysis	p. 254
Marginal anaysis	p. 270
Cash forecasting, business planning and management control	p. 280
Introduction	p. 280
The business planning process	p. 281
Business planning in practice	p. 286
Budgeting methodologies and variance analysis	p. 311
Cost management and pricing	p. 323
Introduction	p. 323
Cost management	p. 324
Pricing	p. 348
The management of working capital	p. 359
Introduction	p. 359
The role of working capital	p. 360
Inventory management	p. 364
Managing credit policy	p. 373
Managing cash	p. 381
Finance and financial markets	p. 391
Investment appraisal	p. 393
Introduction	p. 393
Matching cash flows over time	p. 394
The net present value model	p. 400
Other methods of investment appraisal	p. 418
The nature of the financial markets	p. 434
Introduction	p. 434
Securities and the financial markets	p. 435
The financial markets	p. 435
The capital markets	p. 442
The cost of capital	p. 461
Market measures of performance and value	p. 471
Introduction	p. 471
Investor ratios	p. 472
Valuing the firm	p. 476
Measuring the performance of firms	p. 483
Appendix Financial tables	p. 490
Answers to selected review activities and end-of-chapter questions	p. 493
Glossary	p. 530
Bibliography	p. 537
Index	p. 539
Table of Contents provided by Ingram. All Rights Reserved.

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Finance and Accounting for Business

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