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PGDM (2010 12)

Course Manual

Accounting for Managers

Facilitator: Dr Nidhi Srivastava

email id: [email protected]

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Course objective:

This module is to provide managers within the private, public and not for profit sectors with a general foundation

in the understanding of the accounting language, core principles and concepts that underpins the external and

internal reporting statements. The module will focus on the content, structure, analysis and interpretation of the

corporate financial statements and their limitations and the use of accounting and financial information for short

term and long term management decision making.

Learning outcome:

Increase in confidence and understanding in financial matters

Develop your skills in analysing and interpreting financial and accounting information,

particularly in the context of the organisation's strategy, its competitors and its industry

encourage you to think logically and creatively about the strengths and weaknesses of

information available to decision makers.

Increase your ability to communicate effectively with stakeholders

Understand how and why value is created by businesses

Books and References:

Main Text:

Financial Statement Analysis - 9th .Edition 2008, Wild, Subramanyam, & Halsey, Robert F. McGraw-

Hill (referred as FSA)

Additional Reading:

- Financial Accounting for Management An Analytical Perspective 3/e, Ambrish Gupta by Pearson

Publications.

- Financial Accounting: For Business Managers, Bhattacharyya Asish K, Prentice Hall of India Pvt Ltd.

(referred to as AKB)

- Financial Accounting: A Managerial emphasis, Ashok Bannerjee, Excel Books

- Introduction to Financial Accounting, Horngren, Pearson Education

Assessment Criteria:

S

.

N

o

.

Parameter Weight age

Due Date

1 Midterm 20% After session 13

2 Industry based Group Project 20%Would commence after

session 5

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3 End Term 60% As per program schedule

A. MID TERM TEST: 20%

Test will be held as per given deadline. They would focus on students conceptual understanding and

application potential. Examination will contain close ended questions related to the textbook readings

and problems we discuss in class.This would be a one hour close book examination.

B. Industry based Group Project: 20%

As per the groups formed by the institute each group will choose an industry to analyze, for

example, fast food, automobile or Telecommunication. Each person in the group will choose

his/her own firm in the industry and will email me the names of the Industry and companies for

my approval by session 5. Your group will present orally a 10 minute industry analysis using the

firms in your industry, followed by 5 minutes of Q &A scheduled after session 11. Each group

would communicate the date of their final presentations through email scheduled after session

20. Your task will be to gather, as a minimum, Annual Reports or financial statements from the

companies most recent audited filings. You may supplement these with additional data from

any public sources if they help you generate further insights. The analysis should cover the

relevant topics discussed up to the presentation date. You are to summarize the economics and

current conditions in the industry and each firm in your industry. Describe the strategies each of

the firm pursues, perform a profitability and risk analysis, a cash flow statement analysis, and

talk about any other relevant items.

(1) What business strategies are being pursued by each company?

(2) What are the key accounting policies and estimates for each company, given their industry and

business strategies?

(3) Do the financial statements reflect the underlying economic reality?

Each group after session 15 would make presentations and analysis of their respective industry. On the

day of presentation they will submit a written report of their findings, not to exceed six pages of single

spaced text (not including exhibits) and late submission will result in a zero for all the group members

involved. Students will be graded both on the quality of presentations made as well as the quality of

pertinent questions asked. I will ask each student to rank the other groups presentations on that day, and

the rankings will be taken into account when determining the grade achieved by each group.

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C. END TERM EXAM: 60%

The examination will test your understanding of the textbook readings and problems. They will be

primarily short answer questions and some open ended essay type questions related to the textbook

readings and problems we discuss in class. This would be a two hour close book examination.

Accounting for Managers

Course at A glance

Total 27 sessions

Sessi

on

Topic Readings Chapters

1 Preparation of Final

Accounts with suitableadjustments

AKB pg 130 199, Ch

5

AKB Ch 5


Accounts with suitable

adjustments

AKB pg 130 199, Ch

5

AKB Ch 5



adjustments

AKB pg 130 199, Ch

5

AKB Ch 5



adjustments

AKB pg 130 199, Ch

5

AKB Ch 5

5 Introduction to Fixed Assets& Depreciation Accounting

AKB pg 366 370,Ch 9

AKB Ch 9

6 Introduction to Fixed Assets

& Depreciation Accounting

AKB pg 366 370,

Ch 9

AKB Ch 9

7 Financial Statement

Analysis:Tools 1 and 2:

Comparative Financial

Statements and Common

Size Statements

FSAPg 2430 FSACh 1

8 Tool 3: Ratio Analysis: Risk

Analysis

FSAPg 498 571 FSACh 10

9 Tool 3: Ratio Analysis:

Profitability Analysis


10 Exercise

11 Tool 3: Ratio Analysis:

Market Valuation


12 Case Study: Analysis of

company Annual Report

with Ratio Analysis

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13 First round Presentation for

Group Project

14 Mid Term

15 Tool 4: Statement of Cash

Flows


16 Tool 4: Statement of Cash

Flows


17 Analysis of Cash Flow

Statement


18 Exercise

19 Tool 5 : Valuation FSAPg 35 40 FSACh 1

20 Exercise

21 Industry based Project:

Analysis of Annual Report









26 Developments in Accounting AKB Page No.

576 600

Ch. 17 AKB

27 Developments in Accounting AKB Page No.

576 600

Ch. 17 AKB

NB: All Readings must be made before the scheduled class.

Documents

AFM_CS