Balance sheet structure – fixed assets
Balance sheet structure – liabilities
PART TWO Operating performance
Relationships between the balance sheet and profit and loss account
The ratios ‘return on total assets’ and ‘return on equity’
Standards of operating performance
PART THREE Corporate liquidity
Measures of liquidity – long and short analysis
Working capital to sales ratio
Sources and uses of funds – method
Opening and closing cash reconciliation
PART FOUR Determinants of corporate value
13 Financial leverage and corporate valuation
PART FIVE Management decision-making
15 Cost, volume and price relationships
Contribution to sales percentage (CPS)
Project appraisal – the problem
Project appraisal – steps to a solution (1)
Project appraisal – steps to a solution (2)
Project appraisal – present value (PV)
Project appraisal – internal rate of return (IRR)
17 Shareholder value added (SVA)
Value for the equity shareholders
Financial profile of Alpha Inc.
Financial profile of Beta Inc.
Shareholder effects – generalized
Summary of effects on shareholders
Relative versus absolute values
SVA models – Alpha Inc. and Beta Inc.
19 Integrity of accounting statements
Methods of revenue enhancement – fictitious sales
Revenue enhancement – clues for detection
Appendix 2: Companies used in the sample
Appendix 3: Full set of ratio charts from sample companies