Accounting for non-accountants - Graham Mott

This work is written primarily for non-specialist students or managers who need to know about the financial workings of a firm. The aim is to cut through as much jargon as possible and explain the various statements and techniques in a straightforward manner.;There are three parts to the book. The first deals with the types of statement found in the annual report. These include profit and loss account, balance sheet, value added, sources and applications of funds, inflation adjustments and performance ratios.;The next section of the book starts to look inward at the more detailed operations of the firm. All the statements in the annual report relate to the whole firm and its historic performance. Managers need to know about the costs of products and the running costs of their departments. Many decisions are based on an analysis of costs to determine the effects of changing the product mix, of closing down a department, of altering sales volume, whether to make or buy, to name but a few examples. All these decisions are based on the technique of marginal costing which uses the analysis of costs into fixed and variable categories.;The final part deals with the techniques of financial management which concentrate on the efficient use of capital. This embraces both the capital structure of the firm and the manner in which capital is invested in the assets of the business. The efficiency with which a firm carries out these operations is reflected in the profit and loss account and ultimately the share price if a private sector company.;Most of the book relates to any form of business organization, large and small, in both public and private sectors. Employees of nationalized industries will however find the chapters on share values and taxation largely irrelevant. That apart, the remaining chapters are as relevant to gas boards as they are to ICI or a local co-operative.