The bestselling and astonishingly simple guide to the fundamental principles of accounting, written specifically for those without a financial background.
Simple, easily absorbed and clearly explained, this book will guide you through all the major accounting concepts. You will learn how to master company accounts, understand balance sheets, profit and loss accounts and cash flow systems and how to analyse and monitor your company's financial performance.
Anthony Rice is not an accountant. He learned accounting the hard way - by keeping accounts for his own company. Having subsequently spent much of his time analysing companies, first as a strategy consultant and more recently when looking for businesses to buy, he has some valuable insights into financial analysis.
About the author Preface Acknowledgements Prologue Introduction Part 1: The Basics of accounting 1 The balance sheet and the fundamental principle Assets, liabilities and balance sheets Sarah's 'personal' balance sheet The balance sheet of a company The balance sheet chart Summary 2 Creating a Balance Sheet Procedure for creating a balance sheet SBL's balance sheet The different forms of balance sheet Basic concepts of accounting Summary 3 The profit & loss account and cash flow statement The profit & loss account The cash flow statement 'Definitive' vs 'descriptive statements Summary 4 Creating the profit & loss account and cash flow statement Creating the profit & loss account Creating the cash flow statement Summary 5 Accounting in practice More essential concepts Setting up your software Accounting in a simple world Accounting in the real world "Proving" your balance sheet Summary Part 2: Interpretation and analysis of accounts 6 Wingate's Annual Report Different types of accounts The reports Assets Liabilities Shareholders' equity The P&L and cash flow statement 7 Financial Analysis: introduction The ultimate goal The two components of a company The general approach to financial analysis Wingate's highlights Summary 8 Analysis of the enterprise Return on capital employed The components of ROCE Where do we go from here? Expense ratios Capital ratios Summary 9 Analysis of the funding structure The funding structure ratios Lenders' perspective Gearing Shareholders' perspective Liquidity Summary 10 Valuation of companies Book value vs market value Valuation techniques Summary Part 3: Listed company accounts 11 Listed company accounts: introduction Introduction The primary statements Terminology and jargon Accounting standards Fair value vs historical cost Summary 12 Interpretation of Listco's accounts Intangible assets Groups of companies Accounting for subsidiaries Accounting for associates and joint ventures Property, plant and equipment Capital / Funding Equity Debt Financial instruments Foreign currencies Hedging Pensions Corporation tax Share buybacks / Treasury shares Share-based payments Earnings per share Conclusion Glossary Appendix 1: Wingate Foods' accounts Appendix 2: Listco's accounts Index