Accounting and Business Valuation Methods

Klappentext This book is intended to appeal to junior accountants who need guidance and practical analytical tools for risk assessment when assessing the credit risk of companies they are doing business with. It will also appeal to students taking modules that cover basic accounting techniques such as ratio analysis and investment appraisal, as well as company valuation and share valuation. The book demonstrates with case studies where practice often differs from theory. Chapter 1, looks at how accurate company accounts are, and covers topics such as the basic principles of accounting; accounting standards; the annual report; key words and limitations; what makes a director act imprudently; clues to assess accuracy. Chapter 2, considers the basic tools of analysis; reviewing market valuations and market to book ratio; assessing the balance sheet; is the company making good use of its assets; ratio analysis (performance, asset management, structure and investor ratios); investment appraisal procedures. Chapter 3 then looks at valuing companies: systematic and unsystematic risk; the Capital Asset Pricing Model (CAPM); income v growth; valuation techniques for manufacturing and service companies. Chapter 4 brings everything together via case studies: understanding the industry; benefiting from a cautious board; the cost of an imprudent board; price paid for excessive growth strategies; biting off more than one can chew; dramatic effect of stalled growth; overstated assets; profits without cash; and why it is usually better to be acquired. Via a through analysis of published company accounts. This book will show you, as a junior accountant and/or student of accounting how to: distinguish between mandatory and optional reports assess the strength of a companys balance sheet assess whether or not the market value of a particular company is justified assess the risk factors associated with investment Zusammenfassung Covers basic book-keeping! showing how accounts are reconciled and controlled covering topics such as the working capital cycle and negotiating techniques. This work deals with basic business planning and how to use ratio analysis to assess company performance. It also covers risk assessment and valuing companies. Inhaltsverzeichnis How accurate are the accounts?; Basic principles of accounting; Accounting standards; Industry standards; The Annual Report; Responsibilities of those signing the Annual Report; Key words and limitations; The principle of judgement; What makes a director act imprudently; Clues to assess accuracy; The basic tools of analysis; Reviewing market valuations and market to book ratio; Assessing the Balance Sheet; Cash is king ? funds generation; Is the company making good use of its assets; Ratio analysis (performance, asset management, structure and investor ratios); Investment appraisal procedures; Valuing companies; Systematic and unsystematic risk; Portfolio theory and diversification; The Capital Asset Pricing Model; Shortcomings of accepted economic theory; Problems associated with traditional methods of assessment ? horizontal and vertical analysis; The irrationality of stock markets; ; The human factor; Income v growth; Valuation techniques for manufacturing and service companies; How to calculate the growth built into a share price; How to assess unsystematic risk; Case Studies (each point is illustrated by a particular company); Understanding the industry; Benefiting from a cautious board; A classic income share; The cost of an imprudent board; Price paid for excessive growth strategies; Biting off more than one can chew; Dramatic effect of stalled growth; Overstated assets; Profits without cash; Why it is usually better to be acquired. ...

Zusammenfassung
Covers basic book-keeping, showing how accounts are reconciled and controlled covering topics such as the working capital cycle and negotiating techniques. This work deals with basic business planning and how to use ratio analysis to assess company performance. It also covers risk assessment and valuing companies.

Inhalt

How accurate are the accounts?; Basic principles of accounting; Accounting standards; Industry standards; The Annual Report; Responsibilities of those signing the Annual Report; Key words and limitations; The principle of judgement; What makes a director act imprudently; Clues to assess accuracy; The basic tools of analysis; Reviewing market valuations and market to book ratio; Assessing the Balance Sheet; Cash is king ? funds generation; Is the company making good use of its assets; Ratio analysis (performance, asset management, structure and investor ratios); Investment appraisal procedures; Valuing companies; Systematic and unsystematic risk; Portfolio theory and diversification; The Capital Asset Pricing Model; Shortcomings of accepted economic theory; Problems associated with traditional methods of assessment ? horizontal and vertical analysis; The irrationality of stock markets; ; The human factor; Income v growth; Valuation techniques for manufacturing and service companies; How to calculate the growth built into a share price; How to assess unsystematic risk; Case Studies (each point is illustrated by a particular company); Understanding the industry; Benefiting from a cautious board; A classic income share; The cost of an imprudent board; Price paid for excessive growth strategies; Biting off more than one can chew; Dramatic effect of stalled growth; Overstated assets; Profits without cash; Why it is usually better to be acquired.