Index

accounting rules, 2^nd, 3^rd, 4^th

accounts payable, 2^nd, 3^rd, 4^th

accounts receivable, 2^nd, 3^rd, 4^th, 5^th, 6^th

accounts receivable days, 2^nd, 3^rd

accruals, 2^nd

acid test

see also quick ratio

acquisition analysis

of impact of possible merger on earnings per share, 2^nd, 3^rd

of relative and absolute corporate values

of relative contributions of potential partners

of shareholder effects

use of profit and loss accounts in

acquisitions of companies, 2^nd, 3^rd

amortization, 2^nd

annual returns from investment projects

annuities

future values of

present values of

appropriation account

arbitrage

Archer, Mary

Aristotle

asset backing

asset turn, 2^nd;

see also ‘sales to total assets’ ratio

asset utilization, 2^nd

assets

non-operating

overvaluation of

valuation of

see also current assets; fixed assets; total assets

assets per share (APS)

associated companies, sales to

audit

Austen, Jane

authorized share capital

 

backdating of revenue

Bagehot, Walter

balance sheet (B/S)

management of

manipulation of

profile of

relationship with profit and loss account

structure and layout of, 2^nd

Bancroft, George

‘bears’

benchmarks

beta value, 2^nd

‘big bath’ technique

‘bill and hold’ transactions

‘blue chips’

BMC Software

bogus sales

bonds, 2^nd

bonus issues, 2^nd

see also scrip issues

book value, 2^nd, 3^rd

see also ‘market to book’ ratio

borrowing ratio

break-even analysis, 2^nd

break-even point, 2^nd, 3^rd, 4^th

brewing industry

‘bullets’

‘bulls’

Burke, Edmund

 

‘call’ options

calls

capacity constraints

capital asset pricing model (CAPM), 2^nd

capital employed (C/E), 2^nd

capital expenditure

capital growth, 2^nd, 3^rd

capital leases

capital market

capital reserves, 2^nd

capital structure

optimal

capitalized costs, 2^nd

cash cycle, 2^nd

cash flow

categories of

and contributions to cost or revenue

and depreciation

forecasts of, 2^nd, 3^rd

ideal pattern of

incremental

non-operating

per share

and trends in earnings

see also discounted cash flow

cash flow from operations (CFFO)

cash flow (C/F) statement, 2^nd, 3^rd, 4^th, 5^th

reconciliation of opening and closing balances in

cash holdings

cash shortages, 2^nd, 3^rd

caveat emptor

certificates of deposit

Chaucer, Geoffrey

chemicals industry

Churchill, Sir Winston

collateral

collection periods

commercial paper

common funds (US)

see also owners’ funds

‘common size’ financial statements

compensating balances

computer companies

conditional sales

consignment sales

consols

constant growth model

contingent liability

continuing value

see also terminal value

contra agreements

contribution

and profit

total, 2^nd

contribution per unit (CPU), 2^nd, 3^rd

contribution per unit of capacity

‘contribution to sales’ percentage (CPS)

used for problem-solving

weighted

contributions of potential merger partners to earnings

conversion ratio

convertible loans

corporate valuation model

corporate value, 2^nd, 3^rd, 4^th

relative and absolute

cost accounting

cost classification

cost of capital, 2^nd

cost ratios

costs incurred

covenants, restrictive

credit control

creditors

see also accounts payable

creditworthiness

Crowther, Sir Geoffrey, 2^nd

current assets (C/A), 2^nd, 3^rd, 4^th

miscellaneous

current liabilities (CL), 2^nd, 3^rd, 4^th

current ratio, 2^nd

 

debentures

debt, definitions of

‘debt to equity’ ratio, 2^nd, 3^rd

importance of

methods of calculation

‘debt to total assets’ ratio, 2^nd

debtor days, 2^nd, 3^rd

see also accounts receivable days

decision-making, information for, 2^nd, 3^rd

deferred tax, 2^nd, 3^rd

Defoe, Daniel

departmental ratios

depreciation, 2^nd, 3^rd, 4^th, 5^th

and cash flow

Dickens, Charles

dilution

discount factor, 2^nd, 3^rd, 4^th, 5^th, 6^th

discounted cash flow (DCF), 2^nd, 3^rd

discounting and compounding tables

dividend cover, 2^nd

by country and by sector

dividend per share (DPS), 2^nd, 3^rd

dividend yield, 2^nd

drug manufacturers

 

earnings after tax (EAT)

earnings before interest and tax (EBIT), 2^nd, 3^rd, 4^th, 5^th, 6^th

earnings before interest, tax, depreciation and amortization (EBITDA), 2^nd, 3^rd

earnings growth

earnings per share (EPS), 2^nd

impact of a merger on, 2^nd, 3^rd

earnings yield, 2^nd, 3^rd

economic value added (EVA)

see also shareholder value added

employee ratios

ENRON

equity capital

cost of, 2^nd

equity gearing

eurodollars

exchange rates, 2^nd

excitement of business

expected future returns, 2^nd

extraordinary items in accounts, 2^nd

 

factoring

fictitious revenue, 2^nd

finance leases, 2^nd

financial accounting standards boards

financial engineering, 2^nd

financial strength of a company

Fisher, Irving

fixed assets (F/A), 2^nd, 3^rd, 4^th, 5^th

revaluation of, 2^nd

sale of

fixed costs, 2^nd

floating rate notes

food manufacturing

foreign currency

forward cover

forward exchange rates

free borrowing percentage

funds

non-equity, 2^nd

see also liabilities; sources and uses of funds

future value tables

futures contracts

 

gearing, 2^nd

see also leverage

gilts

goodwill, 2^nd, 3^rd

government grants, 2^nd

government securities, 2^nd, 3^rd

growth

opportunities and dangers of

prospects for

self-funding

see also constant growth model; earnings

growth equilibrium models

 

health care sector

hedging

holding companies

horizon period for SVA, 2^nd

hurdle rate

 

inflation, 2^nd

instalment sales

intangible assets, 2^nd

integrity of financial accounts

interest charges

interest cover, 2^nd

interest rates, 2^nd, 3^rd, 4^th, 5^th, 6^th

average

risk-free, 2^nd

internal rate of return (IRR), 2^nd

inventories, 2^nd, 3^rd, 4^th

inventory days, 2^nd

invested capital (IC)

investment decisions

investment profiles

investments, 2^nd

invoices for goods not yet ordered or not yet shipped

issued common stock, 2^nd

 

Japanese companies, 2^nd, 3^rd, 4^th

jargon

junk bonds

 

Keynes, John Maynard

 

leasing, 2^nd, 3^rd

leverage, 2^nd, 3^rd, 4^th, 5^th, 6^th

see also operating leverage

leveraged buy-outs

liabilities, 2^nd, 3^rd

undervaluation of

see also contingent liability

liquidity, 2^nd, 3^rd, 4^th

held in reserve

measures of, 2^nd

loans

long-term, 2^nd

repayment of, 2^nd

short-term, 2^nd

London InterBank Offered Rate (LIBOR)

‘long’ analysis, 2^nd

long term, definition of

long-term contracts, revenue for

long-term funds, 2^nd

long-term loans (LTL), 2^nd

Loughborough, Lord

 

machine hours as a constraint

management accounts

management information systems

management performance, measurement of

manipulation of accounts

‘margin of safety’ in break-even analysis

‘margin on sales’ percentage, 2^nd

drivers of

sector values of

and volume changes

market capitalization, 2^nd

market premium

‘market to book’ ratio, 2^nd, 3^rd

market value, 2^nd, 3^rd, 4^th

market value added (MVA)

see also shareholder value added

market value weights

‘matching principle’ for sources and uses of funds, 2^nd, 3^rd

medium term, definition of

mining companies

minority interests, 2^nd

‘mix’ of products

money market

mutually exclusive projects

 

net fixed assets

net operating profit after tax (NOPAT), 2^nd

net present value (NPV), 2^nd, 3^rd, 4^th, 5^th

net working capital (NWC), 2^nd

net worth (NW), 2^nd

nominal value of company stock

notes to accounts, 2^nd, 3^rd

 

‘off-balance sheet’ borrowing

operating assets

operating cost, misreporting of

operating leases

operating leverage

operating performance

standards of

operating profit, model of

operating revenue, enhancement of

opportunity cost

options

ordinary funds

see also owners’ funds

over the counter (OTC) trading

overheads

overtrading, 2^nd, 3^rd

overvaluation of assets

owners’ funds (OF), 2^nd, 3^rd, 4^th, 5^th, 6^th

 

‘paid borrowing’ percentage

par value, 2^nd

payback analysis and payback period, 2^nd

‘payments and receipts’ statement

payout ratio, 2^nd

pension funds, 2^nd

performance drivers

preference shares, 2^nd

preferred creditors

premature revenue, 2^nd

prepayments

present value (PV), 2^nd, 3^rd

tables of

price-earnings (P/E) ratio, 2^nd, 3^rd

price per share (PPS)

prime rate

pro forma statements

product mix

profiles of companies

see also investment profiles

profit

definition of

distribution of

profit after tax (PAT)

profit and loss (P/L) account, 2^nd, 3^rd

manipulation of

relationship with balance sheet

timing adjustments to

use in acquisition analysis

profit before interest and tax (PBIT)

profit before interest, tax and depreciation (PBITD)

profit before tax (PAT)

profit margin

profit to volume (PV) ratio

profitability index

project appraisal, 2^nd, 3^rd

property leasing companies

property values

proxy votes

public utility companies

‘put’ options

 

quick ratio, 2^nd

 

Rappaport, Alfred

recognition of revenue

repurchase agreements

reserves

use and misuse of

see also capital reserves; revenue reserves

retained earnings (RE), 2^nd, 3^rd

return on assets (ROA), 2^nd

return on capital

return on capital employed (ROCE), 2^nd, 3^rd

return on equity (ROE), 2^nd, 3^rd, 4^th, 5^th

geographical and sectoral analysis

importance of

and ‘market to book’ ratio

for whole economy

return on invested capital (ROIC), 2^nd, 3^rd

return on investment (ROI), 2^nd, 3^rd

return on net assets (RONA)

return on total assets (ROTA), 2^nd, 3^rd, 4^th, 5^th, 6^th

components of

geographical and sectoral analysis, 2^nd

revaluation of assets, 2^nd

revenue enhancement

clues for detection of

revenue reserves, 2^nd

reverse yield gap

rights issues

risk, financial, 2^nd, 3^rd, 4^th, 5^th, 6^th, 7^th

risk-free rate of interest, 2^nd

Rubaiyat of Omer Khayyam

 

sales and leaseback agreements

sales capacity, limits to

‘sales to fixed assets’ ratio

international comparisons of

‘sales to inventories’ ratio

‘sales to total assets’ ratio, 2^nd

drivers of, 2^nd

sector values of

and volume changes

sales, fictitious

scrip issues, 2^nd

seasonal variations

self-funding growth

senior debt

sensitivity analysis

share premium, 2^nd

share values, 2^nd

shareholder effects of company mergers

shareholder value added (SVA), 2^nd, 3^rd, 4^th, 5^th, 6^th

shareholders’ funds

shares, exchange of

Shaw, George Bernard

‘short’ analysis, 2^nd

short-term assets

short-term liabilities, 2^nd

short-term loans (STL)

side-letters, use of

sources and uses of funds, 2^nd

indirect calculation of

long and short analysis of

related to balance sheet

and reporting standards

special purpose entities (SPEs)

spontaneous accounts

spontaneous financing

standards of financial reporting

stock exchanges, 2^nd, 3^rd, 4^th

stock market ratios

‘stuffed’ revenue

subordinated debt

subsidiary companies, 2^nd

swaps

 

takeover bids, 2^nd, 3^rd

see also acquisition analysis

tangible assets

target values for ratios, 2^nd

taxation

deferred, 2^nd, 3^rd

rates of

telecommunications sector

term loans

terminal value, 2^nd, 3^rd, 4^th, 5^th

time value of money

‘top line’ from accounts

total assets (TA), 2^nd

Treasury stock

‘true and fair view’ principle

 

ultra vires acts

undervaluation of liabilities

underwriting

unit contribution

unit cost

 

V chart

value added tax (VAT)

value drivers, 2^nd

variable costs, 2^nd

vendor-funded sales

 

warrants

weighted average cost of capital (WACC), 2^nd, 3^rd, 4^th

‘window-dressing’ of company accounts, 2^nd

working capital (WC), 2^nd

narrow definition of

see also net working capital

working capital cash flow

working capital days, 2^nd

‘working capital to sales’ ratio, 2^nd

yield calculations

 

Z-growth factor

zero coupon bonds