Fundamentals of financial and management accounting

Description

This is an introductory financial and management accounting course.
The first part of this course will introduce you to basic accounting principles and terminology so you can understand how a company keeps track of financial events and provides information on how it is performing. These fundamental concepts will aid in the analysis of financial reports prepared by businesses. We will go over the balance sheet, income statement, and financial statement and learn how to read and analyse them.

The course will also introduce some techniques (e.g., break-even analysis or NPV) to assist managers in making short-term and long-term decisions, such as "Is it convenient to dispose of a production machine and buy a new one?" or "How many products does the company need to sell to break even?"

The course will provide students with examples and case studies to help them better understand the practical applications of basic accounting principles and techniques.
Students will be able to read, understand, and analyse financial documents by the end of the course, as well as apply simple techniques to analyse costs and evaluate capital investment decisions.

Syllabus :

1. Week 1 - Introduction to accounting

• What is a company: shareholders and stakeholders
• NPV Calculation
• What is accounting
• Introduction to financial accounting
• Accrual and cash principles

 

2. Financial reports

• Balance sheet: general overview
• Non current assets and depreciation
• Example on recognition of non current assets
• Inventories
• Equity and liabilities
• Income statement: general overview
• The impact of inventories on profit
• Solution to the inventories exercise
• Cash flow statement

 

3. Management accounting

• What are costs
• Costs classification
• Costs configuration: direct vs full costs
• Cost tracing vs cost allocation
• JOC
• Solution to the JOC exercise
• ABC
• Solution to the ABC exercise

 

4. Long-term decision making

• What is an investment decision
• Steps to investment appraisal
• NPV method: general formula
• NPV calculation: taxes
• NPV calculation: external financing
• Solution to the Investment appraisal exercise

 

5. Short term decision making

• What are short-term decisions
• Evaluating short-term decisions
• Solution to the Contribution Margin exercise
• Break even point
• Solution to the Break Even Point exercise
• Production mix
• Solution to the Production Mix exercise
• Evaluating alternatives
• Solution to the alternatives evaluation exercise

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