Math for Managers Thomsett, Michael C
2018, 2018-11-05T00:00:00, 2018-11-05
eBook
Math for Managers is a practical summary of formulas every manager needs. The book is organized into logical chapters, and each formula introduced includes an example and the Excel program needed to ...make the process of calculation simple. It adds a practical side to the challenge of calculating the sometimes complex formulas of compound interest, rates of return, breakeven after tax liability, balance sheet and income ratios, depreciation, reports and budgets, proration, statistics, and more. Additional appendices are provided to explain incredible math shortcuts. This book will benefit managers and executives at any level within an organization, as well as academic instructors and business students. Michael C. Thomsett is a market expert, author, speaker, and coach. His many books include Stock Market Math, Candlestick Charting, The Mathematics of Options, and A Technical Approach to Trend Analysis.
SYNOPSIS: Current financial performance reporting has led to a focus on earnings per share and a proliferation of both non-GAAP measures and items reported in other comprehensive income. I examine ...characteristics of some of the more common non-GAAP earnings adjustments to propose a financial performance reporting model that consistently presents information with those characteristics separately. This reporting model focuses on distinguishing operating results from nonoperating results and within those categories presenting recurring amounts separately from nonrecurring amounts. I next explore potential implications for measurement. This analysis identifies conditions when the recognition of incremental unrealized gains or losses (UGLs) in income under a fair value measurement model improves relevance of reported information. The analysis suggests that UGLs provide most relevant information when there are no internal or external constraints affecting management's ability to sell an asset or transfer a liability before maturity or the end of its useful life. When assets/liabilities are constrained from being sold/transferred before maturity or the end of their useful lives, reported UGLs will reverse to zero over time, limiting relevance. This analysis supports measurement of financial assets and investment properties at fair value and provides a potential basis for measuring other assets and liabilities at historical cost.
Corporate financial statements address multiple stakeholders’ needs. International Financial Reporting Standards (IFRSs), among others, allow two different classifications, “by function of expense” ...and “by nature of expense”, for the statement of profit and loss and other comprehensive income for the period (from now on, also identified in short as “Income Statement”, or “IS”). XBRL standards ensure compliance and consistency in financial statements’ drafting and filing. XBRL taxonomies reflect the Income Statement IFRS disclosure requirement in the {310000} and {320000} codifications, respectively. Given the recent EU enhanced regulations that proposed extend mandatory ESG reporting to SMEs, this study aims to design and recommend an additional Income Statement to embed structured Environmental, Social, and Governance (ESG) disclosure. A restatement of the IS is organised following an adjusted Value-Added perspective to fit the purpose of sustainability disclosure. The above-mentioned Income Statement should be suitable and adaptable for entities of any size and operating in any industry. This goal can be achieved through customised input weighting. Therefore, this applied research can fill a current financial ESG disclosure gap, ensuring financial statements’ comparability and encouraging additional mandatory disclosures through standardisation. Two more items in the XBRL (IFRS-based) structure are suggested, leading to the introduction of one fully structured statement “{330000}—Statement of comprehensive income, profit or loss, by Added Value, ESG based” and a semi-structured “{814000}—Notes—ESG Ratings and Reporting” to better discuss and disclose the assumptions and results of the ESG Statement.
Purpose: Even if popular, carbon accounting is not yet compulsory for companies. However, it should be and certainly will be. From the state's point of view, this will be a prerequisite to respecting ...its international commitments. From the point of view of companies, it is also neces-sary because they use, in part for free, limited resources to create value-added ... and they gen-erate externalities which are not yet fully measured and communicated. Our purpose is to propose a relatively new metric, which is quite simple and could be applied to all companies, especially small ones (turnover < EUR 10 million). Design/methodology/approach: Our metric in this paper is linked to the income statement and measurement of the output of carbon used in the production process of goods and/or services. We compare the use of carbon by seven Polish companies in seven different sectors from 2014 to 2020. The metric is computed in the same way for the firms in our sample and is based on information which must be stated on the yearly income statement. Findings: From our empirical tests, we observe that comparison can first be made between firms and sectors. As expected, the impact is far more important for industries than for service compa-nies. In terms of volatility, we reach the same result. However, this volatility is not linked to the nature of the companies but more to the volatility of the carbon price. As a first step, this gives an interesting and rough measure of the cost of the carbon emission per company per year.
Standard setters advocate a balance sheet approach to financial reporting, which views assets and liabilities as primary, and income as just the derivative change in net assets. This paper argues ...that income is conceptually and practically better described as 'adjusted net cash flows,' where the adjustments are the accounting accruals. One proof of that is seen in the existence of whole accounting systems like tax accounting and national income accounting, which emphasize the determination of income but have no balance sheets. The paper also argues that an income-based approach to financial reporting is by nature better suited to reflect the success of advancing cash to earn more cash, which defines what for-profit entities do. There are two main features of the income-based approach. One is attention on the cash flows as the natural foundation for financial reporting because they are precisely determined, and provide a clear link to firm valuation. The other is attention on the accounting accruals, which serve to adjust the raw cash flows to better show the current success of investing cash to ultimately earn more cash. Specifically, the paper argues for revenue recognition which is close to current practice, and for expense recognition which is aligned with the matching principle.
PurposeThe aim is to enable debates about the need for changes in the restaurant's management posture regarding food waste.Design/methodology/approachThis study is a teaching case about a restaurant ...and was prepared based on information collected from the authors' experiences in teaching, consulting, and academic research. The plot, company name, and characters are fictitious.FindingsThe results are related to the classroom application to promote discussion and knowledge of topics such as finance, costs, sustainability, food waste, and the Demonstration of Results for the Exercise.Research limitations/implicationsThe main limitation is that it is a fictitious study, but it allows applied research based on the authors' scientific knowledge and professional practice.Practical implicationsThe theme contributes to anchoring decision-making by managers in the face of day-to-day business challenges. Furthermore, in a contemporary perspective, it involves a small establishment concerning the possibilities of contributing to the Sustainable Development Goals (SDGs). Furthermore, due to the richness of details, the case constitutes an intriguing teaching tool to be applied in the classroom.Social implicationsIt impacts social actions, according to the examples found in the narrative used in the teaching case.Originality/valueIts originality is related to its interdisciplinarity and how it involves the themes of finance and sustainability applied in business practice.
Este artículo está dirigido a identificar el grado de utilización de un conjunto de Técnicas e Indicadores de Rendimiento Financiero (TIRF) que permitan monitorear la sostenibilidad financiera de las ...empresas comerciales y de servicios. El problema radica en las frecuentes reformas tributarias y la constante lucha contra el contrabando; actividades que en su conjunto conjugan una amenaza a la sostenibilidad financiera de la empresa. En este sentido, la presente investigación busca analizar las características predominantes, diferenciales y correlacionales de las TIRF asociadas al estado de resultados. El estudio se desarrolló bajo el paradigma cuantitativo lo que permitió aplicar un cuestionario de nuevo diseño, la muestra estuvo conformada por 90 expertos con funciones asociadas al análisis de estados financieros vinculados a 55 empresas comerciales y 35 empresas de servicios seleccionadas de un listado de 1.000. Entre las conclusiones se determinó que las empresas de servicios tienden a realizar más proyecciones de tendencia y benchmarking contra un competidor clave que las empresas de comerciales. Situación que permite inferir la versatilidad y el dinamismo de estas TIRF en el análisis de estados financieros.
All sports have their roots and connection in some way to the Olympic spirit, and therefore fall within the vision and mission of the Olympic Committee, which has a central aim of “building a better ...world”. This is a fundamental value of the Olympics and sustainability is a “working principle” of this. This research analyses the performance of professional European football teams that are publicly listed on stock markets, analysing their income statements and factoring in how the value-added perspective is impacting professional sport. The methodology we use considers the sustainable contribution of the distribution of added value. The Value-Added Statement is considered as a part of broader Corporate Social Responsibility (CSR), which can be traced back as a concept to the late 1970s. It is still in widespread use and is regarded as being both a credible and a tested measure. In this paper, the authors apply a slightly modified and simplified version of this value-added approach to all publicly listed European football clubs and use these as a proxy for wider professional sport. This research demonstrates that, although most professional sports clubs are profit-oriented, the distribution of wealth generated by the added value is unbalanced. In most cases, at least in financial terms, the data shows shareholders are the most disadvantaged, whereas athletes are the most rewarded.
This paper examines the relation between state contract law and the use of accounting information in debt contracts. Contract theory suggests that balance sheet based covenants resolve ...debtholder-shareholder conflicts ex ante, whereas income statement based covenants serve as trip- wires that trigger the switch of control rights ex post. It is more difficult for lenders to exert their control rights ex post if the contract law is more favorable to debtors (i.e., the law is pro-debtor), suggesting that balance sheet based covenants are more efficient in these jurisdictions. We therefore test and find evidence that lenders using pro-debtor (pro-lender) law are more (less) likely to rely on balance sheet based covenants. We measure reliance using both the weight of balance sheet covenants relative to income statement covenants and the covenant strictness. Our analysis further shows that contracts with performance pricing grids are less likely to include interest increasing grids when the law is more favorable to debtors. The results provide initial evidence that contract law is an important determinant for the design of debt contracts.
"Farmer Producer Companies are emerging as an innovative model to transform agriculture into a profitable business venture by leveraging the collectives of small and marginal farmers through ...economies of scale with better bargaining power, better value addition facilities, better access to farming technologies, better input supply, and better market accessibility. Financial performance indicates the financial health and resource utilization efficiency of a business organization or a company over a certain period. In the present study, a comparative analysis of balance sheets and income statements was made for five different Farmer Producer Companies of Eastern Uttar Pradesh to identify the pattern of change in various financial components from 2019-20 to 2020-21. Based on the analysis, the important findings were that reserve and surpluses were significantly increased for most of the FPCs for future business expansion, three FPCs reported increased total liabilities, and all of the FPCs managed to grow their total assets compared to the previous year. The revenue growth rate for three FPCs was below par. The performance of the FPCs in respective to net profit after tax was asymmetric. Out of five, only four FPCs were able to meet all the operational expenses from the revenue generated out of business activities and hence, considered profit-making. Moreover, the overall financial performance of the FPCs was disrupted due to the wrath of the Covid-19 pandemic."
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