Accounts Demystified

Anthony Rice is an accountant. He learned accounting the hard way - by keeping accounts for his own company. Having subsequently spent much of his time analysing companies, first as a strategy consultant and more recently when looking for businesses to buy, he has some valuable insights into financial analysis.

About the author

Preface

Acknowledgements

Prologue

Introduction

Part 1: The Basics of accounting

1 The balance sheet and the fundamental principle

Assets, liabilities and balance sheets

Sarahs personal balance sheet

The balance sheet of a company

The balance sheet chart

Summary

2 Creating a Balance Sheet

Procedure for creating a balance sheet

SBLs balance sheet

The different forms of balance sheet

Basic concepts of accounting

 Summary

3 The profit & loss account and cash flow statement

The profit & loss account

The cash flow statement

Definitive vs descriptive statements

Summary

4 Creating the profit & loss account and cash flow statement

Creating the profit & loss account

Creating the cash flow statement

Summary

5 Accounting in practice

More essential concepts

Setting up your software

Accounting in a simple world

Accounting in the real world

Proving your balance sheet

Summary

Part 2: Interpretation and analysis of accounts

6 Wingates Annual Report

Different types of accounts

The reports

Assets

Liabilities

Shareholders equity

The P&L and cash flow statement

7 Financial Analysis: introduction

The ultimate goal

The two components of a company

The general approach to financial analysis

Wingates highlights

Summary

8 Analysis of the enterprise

Return on capital employed

The components of ROCE

Where do we go from here?

Expense ratios

Capital ratios

Summary

9 Analysis of the funding structure

The funding structure ratios

Lenders perspective

Gearing

Shareholders perspective

Liquidity

Summary

10 Valuation of companies

Book value vs market value

Valuation techniques

Summary

Part 3: Listed company accounts

11 Listed company accounts: introduction

Introduction

The primary statements

Terminology and jargon

Accounting standards

Fair value vs historical cost

Summary

12 Interpretation of Listcos accounts

Intangible assets

Groups of companies

Accounting for subsidiaries

Accounting for associates and joint ventures

Property, plant and equipment

Capital / Funding

Equity

Debt

Financial instruments

Foreign currencies

Hedging

Pensions

Corporation tax

Share buybacks / Treasury shares

Share-based payments

Earnings per share

Conclusion

Glossary

Appendix 1: Wingate Foods accounts

Appendix 2: Listcos accounts

Index