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Index
readability of, 7
trends, 115–119
Generally Accepted Accounting
Principles (GAAP), 7–9
variance reporting, 169–171 General ledger, 7, 23–25 215
videotape analogy, 16–19 Goals. See also Business planning
Financing. See also Investment long-term, 145–147
capital; Loans; Stocks short-term, 147–153
on cash flow statement, 95–97 Gross profit margin, 106
convertible debt, 185–186 Gross profits, 56, 121–122. See
long-term debt, 181–185 also Cost accounting
methods summarized, 187 Growth, impact on cash flow,
overview of, 173–174 67–74
plans for, 142 H
short-term debt, 175–181
Hazardous materials disposal
stocks, 186–191 business, 144
Finished goods, 37–38
“Hidden” information, 19,
First-round investors, 195–198 99–100. See also Critical per-
Fixed assets, 39–40, 62. See also
formance factors (CPFs)
Assets
Fixed costs, 128–130 I
Flexible budgets, 166–169 IBM, 60
Flooring, 180, 187 Incentives, 113, 132
Forecasting, 156, 157–160 Income, 22. See also Net income
Formulas Income statement
adjustment to inventory, 92 in accrual basis accounting, 26
backlog of firm orders, 112 basic functions, 28
cash collections, 89, 90 cost of sales, 55–56, 57
costs per sales dollar, 108 earnings per share, 63–65
debt-to-equity ratio, 109 gross profits, 56
fundamental accounting for- income lines, 60–63
mula, 24 operating expenses, 57–60
gross profit margin, 106 sales line, 54–55
interest coverage, 110 shortcomings, 83
inventory turnover, 104 transaction timing for, 51–54
return on equity, 111 videotape analogy, 18–19
Fully diluted earnings per share, Increase in bank debt, 95–96
64–65 Indirect costs, 127
Fundamental accounting formula, Indirect method, for cash flow
24 statement, 85, 86–87, 88
Information needs, 10
G Initial public offerings (IPOs), 5–6,
General and administrative
203–204
expenses, 60, 127
Insolvency, 34
