FT Guide to Using and Interpreting Company Accounts

✍ Scribed by Mckenzie, Wendy

• Publisher: FT Press; Financial Times/ Prentice Hall
• Year: 2010;2013
• Tongue: English
• Leaves: 561
• Series: The FT Guides
• Edition: 4th
• Category: Library

✦ Synopsis

A complete reworking of an established and successful seller. The only book in the UK market designed for the manager, entrepreneur or professional investor, to help them understand a company or a competitor's accounts.

General reworking of international references to show changes to accounting rules


Complete reworking of current Chapter 8 "Accounts in Other Countries" to introduce the global harmonisation process in GAAP. This is the shift from country by country specific Generally Accepted Accounting Procedures - hence GAAP - to the International Financial Reporting Standards (IFRS) which have been adopted by the International Accounting Standards Board. As of 1 March 2008 over 75 countries require the use of IFRS. A list of countries subscribing to IFRS can be found at http: //www.iasplus.com/country/useias.htm. The US should seek convergence by 2009


Material on emerging markets and their accounting similarities and differences


Detailed updating of the case study accounts - currently Johnson Matthey - possibly to use the accounts of Marks and Spencer


List of useful websites and accounting links

✦ Table of Contents

Cover......Page 1
FT Guide to Using and Interpreting Company Accounts......Page 2
Contents......Page 8
Preface......Page 13
Part 1 What information will I find in the accounts?......Page 16
Introduction......Page 18
The accounting principles......Page 21
The accounts......Page 24
Summary......Page 35
Introduction......Page 38
Capital costs and revenue costs......Page 39
What does an income statement look like?......Page 41
The accounting judgements – defining the costs that relate to the sales......Page 74
Currency adjustments......Page 91
Income statement summary......Page 97
IMI’s income statement......Page 99
Introduction......Page 104
What will I find in a balance sheet?......Page 106
How is this information presented?......Page 110
The balance sheet in detail......Page 115
Summary......Page 189
IMI’s balance sheet......Page 193
Introduction......Page 196
What’s in a statement of recognised income and expense?......Page 197
IMI’s statement of recognised income and expense......Page 201
What’s in a statement of changes in equity?......Page 202
The statement of total recognised gains and losses......Page 204
The effects of the revisions to IAS 1 on the financial statements......Page 207
Introduction......Page 212
What is in a statement of cash flows?......Page 213
The cash flow statement in detail......Page 214
IMI’s cash flow statement......Page 220
Introduction......Page 226
Segmental analysis......Page 227
Employee benefits......Page 237
Contingent liabilities......Page 250
Commitments for future capital expenditure......Page 251
Events after the reporting period......Page 252
Related party transactions......Page 253
Financial risk management disclosures......Page 255
The operating and financial reviews......Page 258
IMI’s financial review......Page 260
The main differences between the international rules and UK GAAP......Page 270
The presentation of the financial statements......Page 274
The income statement/profit and loss account......Page 279
The balance sheet......Page 282
The statements of total recognised gains and losses and the recognised income and expense......Page 285
The cash flow statement and statement of cash flows......Page 286
Part 2 How do I analyse the accounts?......Page 290
Introduction......Page 292
Starting your analysis......Page 293
And now, a few words about ratios......Page 303
What’s in this part of the book?......Page 306
Introduction......Page 310
Immediate solvency/liquidity......Page 311
Short-term solvency......Page 314
Long- and medium-term solvency......Page 315
Summary of the solvency ratios and analysis......Page 326
IMI’s solvency in 2008......Page 328
Introduction......Page 342
What is the definition of the return on capital employed?......Page 344
Calculating the return on capital employed......Page 353
Improving the return on operating capital employed......Page 357
The hierarchy of ratios......Page 364
Using EBITDA......Page 366
Summary of the profitability ratios......Page 367
IMI’s profitability ratios in 2008......Page 369
The operating and financial reviews......Page 382
The cash flow statement......Page 383
The loan profile......Page 388
IMI’s cash management......Page 389
Introduction......Page 394
The investment ratios......Page 395
Summary......Page 420
IMI’s investment ratios in 2008......Page 425
Starting the analysis......Page 436
IMI’s five-year summary......Page 437
IMI’s operating review......Page 439
IMI’s financial statements......Page 455
Analysing IMI’s financial performance 2005–2008......Page 462
Part 3 How can I use my analysis?......Page 488
Introduction......Page 490
Introduction......Page 492
The first decision … which accounts to use......Page 493
First steps......Page 494
Relevant ratios......Page 495
The importance of your order......Page 506
Summary......Page 507
Introduction......Page 508
The first decision … which accounts to use......Page 510
First steps......Page 511
Relevant ratios......Page 512
Summary......Page 519
Introduction......Page 520
The first decision … which accounts to use......Page 521
First steps......Page 522
Relevant ratios......Page 523
Summary......Page 532
Introduction......Page 534
Relevant ratios......Page 537
Post-acquisition profitability......Page 541
Cash management and the statement of cash flows......Page 542
Company valuation......Page 545
Summary......Page 549
Where can I find a company’s accounts?......Page 550
The format of the small and medium-sized private companies’ accounts filed at Companies House......Page 552
Index......Page 556

✦ Subjects

Business