Financial Statement Analysis – Ratio Analysis

Playlist 0:22 Purpose of Financial Analysis 13:47 Types of Analysis 23:04 Horizontal Analysis 38:05 Trend Analysis 53:28 Vertical Analysis Common-Size Statements 1:12:38 Liquidity Ratios Part 1 1:35:52 Liquidity Ratios Part 2 1:54:31 Current ratio, quick or acid ration, and working capital-Accounting 2:28:03 Solvency Ratios 2:41:47 Profitability Ratios 2:55:20 Market Prospects Ratios 3:06:40 Financial Analysis Data Online 3:10:39 Financial Analysis Sample Reports Overview 3:27:03 Financial Analysis Sample Reports Traditional Performance Evacuation Techniques 3:30:40 Financial Analysis Sample Reports Ratio Analysis Profitability 3:36:33 Financial Analysis Sample Reports Ratio Analysis Solvency 3:39:16 Financial Analysis Sample Reports Ratio Analysis Liquidity 3:45:13 Financial Analysis Sample Reports Recommendations 3:52:11 Financial Statement Data Online


Time Value of Money & Capital Budgeting

Capital Budgeting – Managerial Accounting Playlist 0:36 Capital Budgeting 10:15 Payback Period, Accounting Rate of Return, & Net Present Value 27:28 Present Value 44:04 Present Value Months as Period 48:02 Future Value 1:00:43 Future Value Months As Period 1:04:39 Future Value vs Present Value 1:10:51 Present Value Annuity 1:24:41 Present Value Annuity Months as Period 1:28:03 Future Value Annuity 1:39:30 Future Value Annuity Months 1:43:24 Present Value Cash Flow Examples 1:57:29 Future Value Cash Flow Examples 2:06:31 Present Value Terms Used In Capital Budgeting 2:14:30 Net Present Value Assumptions 2:16:34 Net Present Value Calculation Part 1 2:26:38 Net Present Value Calculation Part 2 2:37:47 Internal Rate of Return IRR 2:44:18 Break Even Time Time value of money and capital budgeting decision is an excellent tool for anybody who needs to consider longer-term decisions that require us to understand the time value of money. We will learn the time value of money concepts like present value and future value using multiple methods, including formulas, tables, and Excel functions. We will format the data in many ways and have many examples using Excel to calculate present value. The playlist will review core managerial accounting concepts and objectives so that we get into a managerial accounting mindset as opposed to a financial accounting mindset. We will describe, calculate, and apply the time value of money concepts. Time value of money is a core concept useful to both business and personal decisions and capital budgeting decisions, decisions of larger dollar amounts that affect multiple periods, provide great tools and scenarios for learning the time value of money concept. The playlist will explain the present value of a single amount and present value of an annuity, describing multiple ways they can be calculated including formulas, tables, and Excel functions. We will discuss the future value of a single amount and future value of an annuity, explaining multiple ways they can be calculated including formulas, tables, and Excel functions. The playlist will apply time value of money and other decision-making tools to capital budgeting decisions. Capital budgeting decisions are generally larger dollar amount decisions that affect multiple periods into the future and therefore, often require us to consider the time value of money. We will run multiple scenarios of capital budgeting decisions what are great tools to learn the concept of the time value of money. We will cover how to calculate and apply the payback period to capital budgeting decisions, the payback period being the time period at which or initial investment will be returned. The playlist will discuss how to apply the accounting rate of return calculation to capital budgeting decisions. We will describe how to use net present value (NPV) calculations to make long term decisions considering the time value of money. The net present value calculation is the primary tool we use that does take into consideration the time value of money with regards to capital budgeting decision making, and therefore we will have many examples of the NPV calculation. The playlist will explain how to use the internal rate of return (IRR) calculations to make long term decisions considering the time value of money. The internal rate of return is another core concept related to capital budgeting decisions and is related to the NPV. We will compare the IRR and the NPV in detail. We will analyze how to use internal break-even time (BET) calculations to make long term decisions considering the time value of money.



Relevant Costs

Playlist 0:21 Decision Making Process 13:28 Make or Buy Decision 18:40 Scrap or Rework 23:55 Sell or Process Further 28:02 Product Mix Decision 42:45 Department Operating at a loss Close or Not 49:16 Equipment Keep Old or Purchase New 56:54 Set Sales Price 1:05:28 Special Project or Offer – Accept or Reject Decision Apply relevant cost methods to common managerial decisions. Managers often need to make decisions that are not routine, not part of the normal day to day process, and that can have a long-term effect on the organization. Individuals often need to make similar decisions and can apply similar tools when making decisions of a large dollar amount that can affect multiple years. Although the specifics of each decision differ, the concept of relevant costs helps us put together a process for gathering and analyzing data, picking up the information that matters, and removing all the excess data that does not matter to our decision. Understanding relevant costs will reduce the likelihood of making incorrect decisions based on a sunk cost effect or not taking into account opportunity costs. We will analyze the decision-making process of buying a new piece of equipment or keeping an older piece of equipment, a question often relevant to individuals as well as businesses. The decision of whether to buy new equipment is subject to the sunk fallacy effect, and we will discuss why this is. This video will investigate the managerial accounting question of a “special offer.” The “special offer” question often takes the form of a one time offer to purchase from us at a reduced price. It is often the case that a business will benefit from accepting a special offer and the concept of relevant costs will help us to see why. For example, a hotel may have an incentive to take a “special offer” to sleep in a room for a night at a price far below the standard rate and even below cost as it is generally calculated. We will discuss why, and how this concept applies to business in general. We will apply the concepts of relevant costs to a “make or buy” type decision. Should we make a component internally or purchases it from an outside vendor? The vodeo will discuss the managerial accounting question of whether we should process a product further. In other words, should we sell a product at one point of production or should we process the product further and sell it for a higher price? We will also discuss a similar question related to defective inventory and whether we should scrap the inventory now or rework it. We will discuss the question of what sales mix to use. In other words, if we have multiple products which ones should we produce and how much should we produce? The video will discuss the question of eliminating a segment or department of a company. For example, if a departmental income statement shows a loss, should the department be eliminated and how can we apply relevant costs to make the best decision? We will discuss how to use cost data to set a sales price using a cost method and variable cost method.


Responsibility Accounting

Responsibility Accounting & Performance Measurement Playlist Links go points in the video: 0:21 Responsibility Accounting System 9:29 Decentralization 26:08 Performance Evaluation & Department Classifications 31:52 Controllable vs. Uncontrollable Costs 36:49 Direct & Indirect Expenses 44:46 Indirect Expenses Allocation 53:46 Allocation of Occupancy Costs 1:09:21 Departmental Income Statement Steps 1:14:32 Example – Departmental Income Statement Steps 1:32:05 Forecasted Departmental Income Statement 1:44:56 Balance Scorecard Managerial Accounting Playlists… We will describe the concept of decentralization, how it applies to businesses, and the pros and cons of a more decentralized organization from a centralized one. The video will cover general managerial accounting concepts necessary to study responsibility accounting, comparing and contrasting managerial accounting and financial accounting. We will explain what a responsibility accounting system looks like and the benefits of a responsibility accounting system. The video will discuss the categorization of costs between direct costs and indirect costs and why this categorization between direct and indirect is useful for reporting financial data by department. We will describe the problems with allocating indirect costs to the proper departments and explain various methods for allocating indirect costs. The video will describe what a departmental income statement is and how to create a departmental income statement. We will explore what a forecasted departmental income statement is and put together a forecasted departmental income statement. The video will discuss other performance measures like return on investment (ROI) and a balance scorecard. We will also complete a comprehensive problem using preformatted Excel worksheets and step by step instructional videos.



Financial Accounting & QuickBooks

How to learn both: • How to enter data into financial accounting software and • How financial accounting works The best way to learn the two objectives above is not as apparent as it may seem at first glance. One problem is that financial accountings software is designed to be able to separate duties and use forms to simplify the data input process, rather than entering the actual journal entries, the debits and credits. Once we know the financial accounting concepts, like the use of debits and credits, accounting software is a great tool to help us practice those concepts. The best way to learn financial accounting concepts, like debits and credits, is to work comprehensive problems in Excel. Let’s do both. Let’s work a comprehensive problem using debits and credits in Excel and work the same problem using accounting software (QuickBooks), and compare and contrast the two as we go. It will be great.


Flow of Materials, Labor, & Overhead – Process Cost System

Process cost system will track the costs that go into the production of inventory. Those costs include direct materials, direct labor, and manufacturing overhead.

Inventory will first be purchased with a debit to material asset and credit to accounts payable or cash. The materials will then flow through to finished goods.

The materials will go into work in process WIP or overhead depending on whether it can be applied to a job. The materials going to WIP will debit work in process WIP and credit materials.

The materials going into overhead will debit overhead and credit materials.

Work in process will be increased by overhead applied to it and direct labor. Direct labor will debit work in process WIP and credit wages payable or cash.

Overhead will go into work in process with a debit to work in process and a credit to overhead.

Work in process will then move to finished goods with a debit to finished goods and a credit to work in process.

When sold the finished goods will move to cost of goods sold with a debit to cost of goods sold and a credit to finished goods inventory.

Personal Finances & QuickBooks

Can I track my personal accounting data using QuickBooks? Yes! Is there an easier software to use? No! Why does it seem more difficult to understand personal accounting then business accounting? Because the objective of a business is much clearer; the generation of revenue, while the objective of a life is much messier; the generation of. . . or, to be . . . or, to achieve. . . uh, fill in the blank ____ __. No software can create a standard set of accounts that line up to everyone’s personal goals and objectives, so if we want personal financial data, we can’t just depend on software. We will have to do it ourselves. Let’s get started. Link to course with discount