《管理会计 英文版 第3版》求取 ⇩

CHAPTER1

Glossary G-1

Indexes I-1

Contents in BriefPreface xixPhoto Credits xxviiiPART1

ContentsPreface xixPhoto Credits xxviiiPART1

FUNDAMENTALS AND COST-ACCUMULATION SYSTEMS1

FUNDAMENTALS AND COST-ACCUMULATION SYSTEMS1

Indexes I-1

Glossary G-1

PART2

PART2

CHAPTER2

MANAGERIAL ACCOUNTING:AN OVERVIEW3

PART3

CHAPTER 1 MANAGERIAL ACCOUNTING:AN OVERVIEW3

PART3

CHAPTER3

CHAPTER4

ORGANIZATIONS AND THEIR GOALS4

THE MANAGEMENT PROCESS4

PART4

PART4

Decision making 4/Planning 5/Directing operational activities 5/Controlling5

THE ROLE OF MANAGERIAL ACCOUNTING5

CHAPTER5

Professional services and sales budget 409/Production budget:Construction of orthotic devices 410/Direct-material budget 411/Direct-professional-labor budget 414/Indirect-professional-labor budget 414/CHAPTER6

CHAPTER8

CHAPTER9

Objectives of managerial accounting activity 5/Managerial versusfinancial accounting 8/Managerial accounting in different types oforganizations9

ROLE OF THE MANAGERIAL ACCOUNTANT10

Line and staff positions10

CHAPTER11

MAJOR THEMES IN MANAGERIAL ACCOUNTING12

CHAPTER12

CHAPTER13

CHAPTER14

COST ANALYSIS AND PRICING DECISIONS15

CHAPTER15

CHAPTER16

CHAPTER17

888/Fixed versus variable costs　889/Dual cost allocation　891/AllocateCHAPTER　18

Information and incentives 12/Behavioral issues 12/Costs and benefits 12/Evolution and adaptation in managerial accounting 13/Cost managementsystems 17/A systems perspective 17/Accounting and computers18

CHAPTER　19

STRATEGIC COST MANAGEMENT AND THE VALUE CHAIN19

CHAPTER20

MANAGERIAL ACCOUNTING ASACAREER22

Professional organizations 22/Professional certification 22/Professional ethics 22/Chapter summary 24/Key terms 24/Reviewquestions 25/Exercises 25/Problems26

BASIC COST TERMS AND CONCEPTS31

CHAPTER 2 BASIC COST TERMS AND CONCEPTS31

COST CLASSIFICATIONS:DIFFERENT COSTS FOR DIFFERENTPURPOSES32

Fixed and variable costs 32/Identifying cost drivers 36/Direct and indi-rect costs 36/Controllable and uncontrollable costs 38/Manufacturingcosts 39/Production costs in service industry firms and nonprofit organi-zations 41/Nonmanufacturing costs 42/Prod43

COSTS ON FINANCIAL STATEMENTS44

COST FLOWS IN A MANUFACTURING COMPANY45

Income statement 44/Balance sheet45

ECONOMIC CHARACTERISTICS OF COSTS47

Opportunity costs 47/Sunk costs 49/Differential costs 51/Marginalcosts and average costs52

COSTS AND BENEFITS OF INFORMATION53

Chapter summary 53/Review problems on cost classifications 54/Solutions to review problems 55/Key terms 56/Review questions 56/Exercises 57/Problems 60/Cases69

CHAPTER 3 JOB-ORDER COSTING SYSTEMS73

JOB-ORDER COSTING SYSTEMS73

Product costing in nonmanufacturing firms74

PRODUCT AND SERVICE COSTING74

FLOW OF COSTS IN MANUFACTURING FIRMS75

TYPES OF PRODUCT-COSTING SYSTEMS76

Job-order costing systems 76/Process-costing systems 77/Summary ofalternative product-costing systems77

ACCUMULATING COSTS INAJOB-ORDER COSTING SYSTEM78

Job-cost sheet 78/Direct-material costs 78/Direct-labor costs 80/Manufacturing-overhead costs 81/Summary of event sequence in job-order costing82

ILLUSTRATION OF JOB-ORDER COSTING82

Purchase of material 82/Use of direct material 84/Use of indirect ma-terial 84/Use of direct labor 84/Use of indirect labor 86/Incurrenceof manufacturing-overhead costs 86/Application of manufacturing over-head 86/Summary of overhead accounting 87/Sellin93

FURTHER ASPECTS OF OVERHEAD APPLICATION93

TWO-STAGE COST ALLOCATION98

Accuracy versus timeliness of information:A cost-benefit issue 93/Choosing the cost driver for overhead application 97/Departmental over-head rates98

Activity-based costing:An introduction99

PROJECT COSTING:JOB-ORDER COSTING IN NONMANUFACTURINGORGANIZATIONS101

CHANGING TECHNOLOGY IN MANUFACTURING OPERATIONS102

Electronic data interchange(EDI)103/Use of bar codes 103/Chaptersummary 104/Key terms105

APPENDIX:DIFFERENT OVERHEAD RATES UNDER PLANTWIDE,DEPRTMENTAL,AND ACTIVITY-BASED COSTING SYSTEMS106

Review questions 109/Exercises 109/Problems 115/Cases129

PROCESS COSTING AND HYBRID PRODUCT-COSTING SYSTEMS135

CHAPTER 4 PROCESS COSTING AND HYBRID PRODUCT-COSTING SYSTEMS135

COMPARISON OF JOB-ORDER COSTING AND PROCESS COSTING136

Differences between job-order and process costing138

EQUIVALENT UNITS:A KEY CONCEPT139

ILLUSTRATION OF PROCESS COSTING141

Basic data for illustration 142/Weighted-average method 143/FIFOmethod 147/Just-in-Time(JIT)Inventory Methods147

OTHER ISSUES IN PROCESS COSTING147

HYBRID PRODUCT-COSTING SYSTEMS150

Operation costing for batch manufacturing processes150

ADAPTING PRODUCT-COSTING SYSTEMS TO TECHNOLOGICALCHANGE154

Chapter summary 155/Key terms156

APPENDIXA:FIFO METHOD OF PROCESS COSTING157

APPENDIX B:PROCESS COSTING IN SEQUENTIAL PRODUCTIONDEPARTMENTS163

Weighted-average method 165/FIFO method 165/Summary oftransferred-in costs 170/Review questions 170/Exercises 171/Problems 176/Cases186

ACTIVITY-BASED COSTING AND COSTMANAGEMENT SYSTEMS189

CHAPTER 5 ACTIVITY-BASED COSTING AND COSTMANAGEMENT SYSTEMS189

Production process 190/Plant layout 192/Traditional,volume-basedproduct-costing system 193/Trouble in Phoenix 194/Activity-based cost-ing system 195/Interpreting the ABC product costs 201/The punch line190

AEROTECH CORPORATION:ATALE OF TWO CITIES190

202/Why traditional,volume-based systems distort product costs204

ACTIVITy-BASED COSTING:SOME KEY ISSUES206

Cost drivers 207/Homogeneous activity cost pools 209/Transaction cost-ing 209/Storyboarding 210/Multidisciplinary ABC project teams 210/Direct versus indirect costs 210/When is a new product-costing systemneeded?211

COST MANAGEMENT SYSTEMS212

Non-value-added costs 213/Identifying non-value-added costs in thePhoenix plant214

ACTIVITY-BASED COSTING AND MANAGEMENT IN THE SERVICEINDUSTRY216

ACTIVITY-BASED MANAGEMENT216

Chapter summary 218/Review problem on cost drivers and product-costdistortion 219/Solution to review problem 220/Key terms 220/Reviewquestions 221/Exercises 221 /Problems 228/Cases242

ACTIVITY-BASED MANAGEMENT AND THENEW MANUFACTURING ENVIRONMENT249

CHAPTER 6 ACTIVITY-BASED MANAGEMENT AND THE NEWMANUFACTURING ENVIRONMENT249

AEROTECH'S BAKERSFIELD PLANT:ADVANCED MANUFACTURINGTECHNOLOGY250

Just-in-time inventory and production management 250/Flexible manufac-turing system 253/Plant layout at Aerotech's Bakersfield facility 254/Cost management system in Bakersfield256

TWO-DIMENSIONAL ABC AND ACTIVITY-BASED MANAGEMENT256

Using ABM to eliminate non-value-added activities and costs 261/Achieving cost reduction263

TARGET COSTING,KAIZEN COSTING,AND CONTINUOUSIMPROVEMENT264

Target costing 264 / Kaizen costing 265 / Toyota:Target costing and kaizencosting in action 266/Benchmarking 267/Re-engineering 268/Theory ofconstraints269

KEYS TO SUCCESSFULLY IMPLEMENTING ABC AND ABM269

COST FLOWS IN A JIT SETTING271

OTHER COSTMANAGEMENT ISSUES IN THE NEW MANUFACTURINGENVIRONMENT273

Chapter summary 274/Key terms 275 / Review questions 275/Exercises 276/Problems 279/Cases289

PLANNING AND CONTROLSYSTEMS293

PLANNING AND CONTROLSYSTEMS293

CHAPTER 7 COST BEHAVIOR AND ESTIMATION295

CHAPTER 7 COST BEHAVIOR AND ESTIMATION295

COST BEHAVIOR PATTERNS296

Variable costs 297/Step-variable costs 298/Fixed costs 299 / Step-fixedcosts 301/Semivariable cost 301/Curvilinear cost 302/Using cost be-havior patterns to predict costs 304/Engineered,committed,and discre-tionary costs 305/Shifting cost structure in th307

COST ESTIMATION308

Account-classification method 308/Visual-fit method 309/High-lowmethod 311 / Least-squares regression method 311/Multiple regression308

WORK MEASUREMENT318

Chapter summary 320/Review problems on cost behavior and estimation318

315/Data collection problems 315/Engineering method of cost estima-tion 316/Effect of learning on cost behavior 316/Costs and benefits ofinformation318

321/Solutions to review problems 321/Key terms322

APPENDIX:FINDING THE LEAST-SQUARES REGRESSION ESTIMATES322

Key terms:Appendix 325/REview questions 325/Exercises 327/Problems 332/Cases342

CHAPTER 8 COST-VOLUME-PROFIT ANALYSIS349

COST-VOLUME-PROFIT ANALYSIS349

Projected expenses and revenue350

ILLUSTRATION OF COST-VOLUME-PROFIT ANALYSIS350

THE BREAK-EVEN POINT351

Contribution-margin approach 351/Equation approach352

Interpreting the CVP graph 355/Alternative format for the CVP graph353

GRAPHING COST-VOLUME-PROFIT REIATIONSHIPS353

357/Profit-volume graph357

TARGET NET PROFIT357

Contribution-margin approach 358/Equation approach 359/Graphicalapproach359

APPLYING CVP ANALYSIS359

Safety margin 359/Changes in fixed expenses 360/Changes in the unitcontribution margin 360/Predicting profit given expected volume 361/Interdependent changes in key variables 363/CVP information in pub-lished annual reports364

CVP ANALYSIS WITH MULTIPLE PRODUCTS364

ASSUMPTIONS UNDERLYING CVP ANALYSIS366

Role of computerized planning models and electronic spreadsheets367

CVP RELATIONSHIPS AND THE INCOME STATEMENT368

Traditional income statement 368/Contribution income statement368

368/Comparison of traditional and contribution income statements368

COST STRUCTURE AND OPERATING LEVERAGE370

Operating leverage 371/Cost structure and operating leverage:a cost-benefit issue373

CVP ANALYSIS,ACTIVITY-BASED COSTING,AND ADVANCEDMANUFACTURING SYSTEMS374

A move toward JIT and flexible manufacturing 375/Chapter summary 377/Review problem on cost-volume-profit analysis374

377/Solution to review problem 378/Key terms378

APPENDIX:EFFECT OF INCOME TAXES379

Key terms:Appendix 382/Review questions 382/Exercises 383/Problems 386/Cases396

CHAPTER 9 BUDGETING:PROFIT PLANNING AND CONTROLSYSTEMS403

BUDGETING:PROFIT PLANNING ANDCONTROL SYSTEMS403

PURPOSES OF BUDGETING SYSTEMS404

THE MASTER BUDGET:A PLANNING TOOL405

TYPES OF BUDGETS405

Sales of services or goods 405/Operational budgets 407/Budgeted finan-cial statements 408/Nonprofit organizations408

AN ILLUSTRATION OF THE MASTER BUDGET408

Overhead budget 414/Selling and administrative expense budget 416/Cash receipts budget 417/Cash disbursements budget 417/Summarycash budget 420/Budgeted income statement 421/Budgeted balancesheet 421/Using the master budget for planning424

BUDGET ADMINISTRATION424

ASSUMPTIONS AND PREDICTIONS:THE UNDERPINNINGS OF THEMASTER BUDGET425

Financial planning models426

ZERO-BASE BUDGETING427

INTERNATIONAL ASPECTS OF BUDGETING427

BUDGETING PRODUCT LIFE-CYCLE COSTS428

BEHAVIORAL IMPACT OF BUDGETS429

Budgetary slack:Padding the budget 430/Participative budgeting 431/Management by objectives 432/Ethical issues in budgeting 432/Chapter summary 433/Key terms434

APPENDIX:INVENTORY MANAGEMENT435

Economic order quantity 435/Timing of orders437

JIT INVENTORY MANAGEMENT:IMPLICATIONS FOR EOQ439

Key terms:Appendix 440/Review questions 440/Exercises 441/Problems 441/Cases462

CHAPTER 1O STANDARD COSTING AND PERFORMANCEMEASURES FOR THE NEW MANUFACTURINGENVIRONMENT469

CHAPTER 1OSTANDARD COSTING AND PERFORMANCEMEASURES FOR THE NEW MANUFACTURINGENVIRONMENT469

CONTROLLING COSTS470

Management by exception470

SETTING STANDARDS471

Participation in setting standards 471/Perfection versus practical stan-dards:A behavioral issue472

USE OF STANDARDS BY NONMANUFACTURING ORGANIZATIONS472

COST VARIANCE ANALYSIS474

Direct-material standards 474/Direct-labor standards 474/Standardcosts given actual output 475/Analysis of cost variances 475/Direct-material variances 475/Direct-labor variances 478/Multiple types of di-rect material or direct labor 479/Allowing for spo479

SIGNIFICANCE OF COST VARIANCES480

A statistical approach482

BEHAVIORAL IMPACT OF STANDARD COSTING483

CONTROLLABILITY OF VARIANCES484

Interaction among variances485

STANDARD COSTS AND PRODUCT COSTING486

ADVANTAGES OF STANDARD COSTING488

CHANGING ROLE OF STANDARD-COSTING SYSTEMS IN THE NEWMANUFACTURING ENVIRONMENT489

Criticisms of standard costing in the new manufacturing environment 490/Adapting standard-costing systems491

OPERATIONAL CONTROL MEASURES IN THE NEWMANUFACTURING ENVIRONMENT492

Gain-sharing plans497

Chapter summary 498/Review problems on standard costing and operationalperformance measures 499/Solutions to review problems 500/Key terms497

THE BALANCED SCORECARD497

502/Review questions 502/Exercises 503/Problems 507/Cases520

FLEXIBLE BUDGETS AND CONTROL OFOVERHEAD COSTS525

CHAPTER 11 FLEXIBLE BUDGETS AND CONTROL OFOVERHEAD COSTS525

OVERHEAD BUDGETS526

Flexible budgets 526/Advantages of flexible budgets 526/The activitymeasure527

FLEXIBLE OVERHEAD BUDGET ILLUSTRATED529

OVERHEAD APPLICATION IN A STANDARD-COSTING SYSTEM530

Criteria for choosing the activity measure531

CHOICE OF ACTIVITY MEASURE531

OVERHEAD COST VARIANCES533

Variable overhead 534/Fixed overhead 537/Four-way,three-way,andtwo-way variance analysis540

STANDARD COSTS AND PRODUCT COSTING542

OVERHEAD COST PERFORMANCE REPORT542

ACTIVITY-BASED FLEXIBLE BUDGET543

MEASURING AND REPORTING QUALITY COSTS546

Chapter summary 549/Review problem on overhead variances 550/Solution to review problem 550/Key terms551

APPENDIX:SALES VARIANCES552

ISO 9000 STANDARDS568

Key terms:Appendix 553/Review questions 553/Exercises 554/Problems 558/Cases574

SECTION 1 RESPONSIBILITY ACCOUNTING ANDSEGMENTED REPORTING579

RESPONSIBILITY ACCOUNTING AND INCOMEREPORTING579

CHAPTER 12 RESPONSIBILITY ACCOUNTING AND INCOMEREPORTING579

Responsibility centers580

ILLUSTRATION OF RESPONSIBILITY ACCOUNTING580

PERFORMANCE REPORTS583

Cost-plus pricing 751/Absorption-cost pricing formulas 753/Variable-costBUDGETS,VARIANCE ANALYSIS,AND RESPONSIBILITYACCOUNTING586

Cost allocation 586/Activity-based responsibility accounting588

BEHAVIORAL EFFECTS OF RESPONSIBILITY ACCOUNTING589

Information versus blame 589/Controllability 590/Motivating desiredbehavior590

SEGMENTED REPORTING591

Segments versus segment managers 593/Key features of segmented report-ing 593/Customer profitability analysis and activity-based costing593

SECTION 2 VARIABLE AND ABSORPTIONCOSTING594

ILLUSTRATION OF VARIABLE AND ABSORPTION COSTING595

Absorption-costing income statements 595/Variable-costing income state-ments 596/Reconciling income under absorption and variable costing595

597/Cost-volume-profit analysis 599/Evaluation of absorption and vari-able costing 600/Chapter summary 601/Review problem on responsibil-ity accounting 602/Solution to review problem 602/Key terms603

APPENDIX:EFFECT OF THE VOLUME VARIANCE UNDERABSORPTION AND VARIABLE COSTING604

Review questions 607/Exercises 608/Problems 612/Cases623

CHAPTER 13 INVESTMENT CENTERS AND TRANSFERPRICING629

INVESTMENT CENTERS AND TRANSFERPRICING629

DELEGATION OF DECISION MAKING630

Obtaining goal congruence:A behavioral challenge 630/Adaptation ofmanagement control systems630

MEASURING PERFORMANCE IN INVESTMENT CENTERS631

Return on investment 632/Residual income634

MEASURING INCOME AND INVESTED CAPITAL637

Invested capital 637/Measuring investment-center income 640/Inflation:Historical-cost versus current-value accounting 641/Measuring incomeand invested capital:Summary642

OTHER ISSUES IN SEGMENT PERFORMANCE EVALUATION642

Alternatives to ROI and residual income 642/Importance of nonfinancialinformation 643/Measuring performance in nonprofit organizations644

TRANSFER PRICING644

Goal congruence 644/General-transfer-pricing rule 645/Transfers basedon the external market price 648/Negotiated transfer prices 650/Cost-based transfer prices 650/Standard versus actual costs 651/Undermining divisional autonomy 651/An international pers653

BEHAVIORAL ISSUES:RISK AVERSION AND INCENTIVES653

GOAL CONGRUENCE AND INTERNAL CONTROL SYSTEMS654

Chapter summary 655/Review problems on investment centers and trans-fer pricing 655/Solutions to review problems 656/Key terms 657/Review questions 657/Exercises 658/Problems 661/Cases669

USING ACCOUNTING INFORMATIONIN MAKING DECISIONS675

USING ACCOUNTING INFORMATIONIN MAKING DECISIONS675

THE MANAGERIAL ACCOUNTANT'S ROLE IN DECISION MAKING677

CHAPTER 14 DECISION MAKING:RELEVANT COSTS ANDBENEFITS677

DECISION MAKING:RELEVANT COSTS ANDBENEFITS677

Steps in the decision-making process 678/Quantitative versus qualitativeanalysis 679/Obtaining information:Relevance,accuracy,and timeliness677

Importance of identifying relevant costs and benefits681

RELEVANT INFORMATION681

IDENTIFYING RELEVANT COSTS AND BENEFITS682

ANALYSIS OF SPECIALDECISIONS687

Sunk costs 682/Irrelevant future costs and benefits 685/Opportunitycosts 685/Summary687

Accept or reject a special order 687/Outsource a product of service 689/Add or drop a service,product,or department692

SPECIAL DECISIONS IN MANUFACTURING FIRMS694

Joint products:Sell or process further 694/Decisions involving limited re-sources 696/Uncertainty698

ACTIVITY-BASED COSTING AND THE NEW MANUFACTURINGENVIRONMENT699

Conventional outsourcing(make-or-buy)analysis 700/Activity-based cost-ing analysis of the outsourcing decision702

OTHER ISSUES IN DECISION MAKING703

Incentives for decision makers 703/Short-run versus long-run decisions703

704/Pitfails to avoid 704/Chapter summary 705/Review problem onrelevant costs 706/Solution to review problem 706/Kev terms707

APPENDIX:LINEAR PROGRAMMING708

Graphical solution 709/Managerial accountant's role 710/Key terms:Appendix 711/Review questions 711/Exercises 712/Problems 716/Cases734

CHAPTER 15 COST ANALYSIS AND PRICING DECISIONS741

MAJOR INFLUENCES ON PRICING DECISIONS742

Customer demand 742/Actions of competitors 742/Costs 742/Political,legal,and image-related issues744

ECONOMIC PROFIT-MAXIMIZING PRICING745

Total revenue,demand,and marginal revenue curves 745/Total cost andmarginal cost curves 747/Profit-maximizing price and quantity 749/Price elasticity 749/Limitations of the profit-maximizing model 750/Costs and benefits of information750

ROLE OF ACCOUNTING PRODUCT COSTS IN PRICING750

pricing formulas 753/Determining the markup 754/Cost-plus pricing:Summary and evaluation755

TIME AND MATERIAL PRICING756

COMPETITIVE BIDDING758

STRATEGIC PRICING OF NEW PRODUCTS760

Target costing 762/Product-cost distortion and pricing:The role ofactivity-based costing765

EFFECT OF ANTITRUST LAWS ON PRICING765

Chapter summary 766/Review problem on cost-plus pricing 766/Solution to review problem 767/Key terms 768/Review questions 768/Exercises 769/Problems 772/Cases781

CAPITAL EXPENDITURE DECISIONS:ANINTRODUCTION787

CHAPTER 16 CAPITAL EXPENDITURE DECISIONS:ANINTRODUCTION787

CONCEPT OF PRESENT VALUE788

DISCOUNTED-CASH-FLOW ANALYSIS794

Net-present-value method 795/Internal-rate-of-return method 796/Comparing the NPV and IRR methods 800/Assumptions underlyingdiscounted-cash-flow analysis 801/Choosing the hurdle rate 802/Depreciable assets802

COMPARING TWO INVESTMENT PROJECTS803

MANAGERIAL ACCOUNTANT'S ROLE805

Sensitivity analysis806

CAPITAL BUDGET ADMINISTRATION807

Postaudit 807/Controlling capital-investment expenditures808

PERFORMANCE EVALUATION:A BEHAVIORAL ISSUE808

JUSTIFICATION OF INVESTMENTS IN ADVANCEDMANUFACTURINGSYSTEMS810

Chapter summary 812/Key terms813

APPENDIX:FUTURE VALUE AND PRESENT VALUE TABLES814

Review questions 818/Exercises 818/Problems 821/Cases828

FURTHER ASPECTS OF CAPITALEXPENDITURE DECISIONS833

CHAPTER 17 FURTHER ASPECTS OF CAPITAL EXPENDITUREDECISIONS833

INCOME TAXES AND CAPITAL BUDGETING834

After-tax cash flows 834/Accelerated depreciation 837/ModifiedAccelerated Cost Recovery System(MACRS)837/Gains and losses on dis-posal 841/Investment in working capital 843/Extended illustration ofincometax effects in capital budgeting845

RANKING INVESTMENT PROJECTS847

ADDITIONAL METHODS FOR MAKING INVESTMENT DECISIONS849

Payback method 849/Accounting-rate-of return method852

ESTIMATING CASH FLOWS:THE ROLE OF ACTIVITY-BASEDCOSTING　855

Chapter summary　855/Key terms　856

APPENDIX:IMPACT OF INFIATION　857

Two capital-budgeting approaches under inflation　858/Key terms:Appendix　861/Review questions　861/Exercises　862/Problems　864/Cases　878

SELECTED TOPICS FOR FURTHERSTUDY881

SELECTED TOPICS FOR FURTHERSTUDY881

COST ALLOCATION:A CLOSER LOOK　883

CHAPTER 18 COST ALLOCATION:A CLOSER LOOK883

Direct method　886/Step-down method　887/Reciprocal-services method884

SECTION 1 SERVICE DEPARTMENT COSTALLOCATION　884

THE NEW MANUFACTURING ENVIRONMENT　893

SECTION 2　JOINT PRODUCT COST ALLOCATION894

The rise of activity-based costing　894

Allocating joint costs　896/Chapter summary　899/Key terms　899

APPENDIX:RECIPROCAL-SERVICES METHOD900

Review questions　903/Exercises　903/Problems　905/Cases　910

ANALYZING FINANCIAL STATEMENTS915

CHAPTER 19 ANALYZING FINANCIAL STATEMENTS915

Analytical techniques used　916/Importance of comparisons and trends916

OBJECTIVES OF FINANCIAL STATEMENT ANALYSIS916

OVERVIEW OF FINANCIAL STATEMENTS916

COMPARATIVE FINANCIAL STATEMENTS918

917/Sources of data　918

Horizontal analysis　918/Trend analysis　920/Vertical analysis　921

Working capital　923/Current ratio　924/Acid-test ratio　924/Accountsreceivable turnover　925/Inventory turnover　926/Book value of securities923

RATIO ANALYSIS:THE BALANCE SHEET923

927/Capitalization ratios　927

929/Earnings per share　930/Return on assets　932/Return on equity929

Operating income　929/Coverage of interest and preferred stock dividends929

RATIO ANALYSIS:THE INCOME STATEMENT929

933/Return on sales 933/Financial leverage　934

RATIO ANALYSIS:THE STATEMENT OF RETAINED EARNINGS　935

Dividend payout ratio　935/Dividend yield ratio　935

NOTES TO FINANCIAL STATEMENTS935

SUMMARY OF FINANCIAL STATEMENT ANALYSIS936

LIMITATIONS OF FINANCIAL STATEMENT ANALYSIS936

Chapter summary 938/Key terms 938/Review questions 938/Exercises936

939/Problems 942/Cases953

CHAPTER 2O PREPARING THE STATEMENT OF CASHFLOWS959

PREPARIN G THE STATEMENT OF CASHFLOWS959

EVOLUTION OF THE STATEMENT OF CASH FLOWS960

Purpose of the statement of cash flows960

CASH AND CASH EQUIVALENTS960

Operating activities 961/Investing activities 961/Financing activities961

CONTENT AND ORGANIZATION OF THE STATEMENT961

PREPAR ATION OF THE STATEMENT963

Direct and indirect methods963

USING THE INDIRECT METHOD OF STATEMENT PREPARATITON963

Operating activities 964/Investing activities 970/Financing activities972/Completed statement of cash flows973

USE OFT-ACCOUNTS AS AN AID IN PREPARING THE STATEMENTOF CASH FLOWS974

Step one:Prepare T-accounts 975/Step two:Enter account balances 975/Step three:Analyze the cash flows from operating activities 975/Step four:Analyze the cash flows from investing activities 978/Step five:Analyzethe cash flows from financing activities979

USING THE DIRECT METHOD OF STATEMENT PREPARATION979

Operating activities 980/Investing activities 983/Financing activities984/Completed statement of cash flows984

OTHER ISSUES IN PREPARING THE STATEMENT OF CASH FLOWS984

Gross versus net cash flows 984/Direct exchange or noncash transactions984

USING THE STATEMENT OF CASH FLOWS986

Illustration of the statement of cash flows 986 / Chapter summary 986 /Review questions 988/Exercises 989/Problems 991/Case1000