IGCSE & A LEVELS GUIDE

Chapter 36 - Finance and Accounting Strategy Lesson Objective: To understand the potential interpretations of published accounts and ratios We have learned many financial and accounting data that are key for strategic decision-making . They include: Profitability and financial performance metrics (Ch. 34) including ratios and financial statements ; Assessment of the availability of sources of finance given liquidity ratios as well as the gearing ratio of businesses. Fin

Chapter 35 - Investment Appraisal Learning Objectives: To understand the qualitative factors of investment appraisal You have now learned many quantitative techniques for investment appraisal: Simple Payback Period; Discounted Payback Period; Account Rate of Return (ARR); Net Present Value (NPV); Internal Rate of Return (IRR). Most business will establish quantitative investment criteria that projects need to meet to be approved, for example: Payback within three years; Have

Chapter 35 - Investment Appraisal Learning Objectives: To learn the investment appraisal techniques of ARR, Discounted Payback, NPV, and IRR The Account Rate of Return (a.k.a. average rate of return) is another common investment appraisal method. It measures the annual profitability of an investment as a percentage of the initial investment. Projects with higher ARR are usually better than the ones with lower ARR; For simplicity we will assume that the net cashflow = annual

Chapter 35 - Investment Appraisal Learning Objectives: To understand the investment appraisal techniques of payback period Investment Appraisal is the practice of assessing financial feasibility of projects and businesses. It includes quantitative and qualitative techniques to show whether the likely future returns on a project/business are greater than its costs . Quantitative methods of appraisal seek to prove whether the expected inflows of a project will surpass its out

Chapter 34 - Analysis of Published Accounts Learning Objective: To understand the many different shareholders' / investment ratios Although not directly considered an investment ratio, gearing ratio is still an important number existing and potential shareholders will look at when making their investment decisions. Taking out loans (debt) isn't necessarily something negative . Loans are a method of financing which can lead to profitable investments (e.g. expansion). However

Chapter 34, Analysis of Published Accounts Learning Objective: To understand Financial Efficiency Ratios Although we have been learning some important measures of performance and liquidity, there are other ratios that businesses should keep in mind, they are called Financial Efficiency Ratios - they are concerned with the efficiency to which the business uses its financial resources . Financial efficiency is important as it measures how efficiently managers are utilizing the

Chapter 34, Analysis of Published Accounts Learning Objective: To understand how to further analyze the published accounts previously learned (profitability and liquidity ratios) After understanding the different Accounting Reports, their uses and importance it is time to start looking at other measures of business performance and financial health - ratios. These ratios are to be used in combination with the accounting reports. There are two main categories of ratios : Pro

Chapter 33 - Financial Statements Learning Objective: To understand how depreciation and inventories are recorded on published accounts Most assets decline in value overtime - specially tangible non-current assets. They do so for two main reasons: Wear and tear through usage ; Technological change making assets obsolete . Depreciation is a cost that needs to be recorded on the Statement of Profit or Loss yearly: Each year when depreciation happens it will add to overhead e

Chapter 33 - Financial Statements Learning Objectives: To understand the Statement of Financial Position The aim for most businesses is to increase shareholders' equity . This is done by increasing the value of the business' assets at a higher rate than the increase in liabilities . The Statement of Financial Position is there to record such net wealth ( shareholders' equity ) at one moment in time . Shareholders' Equity comes from two main sources: It is, therefore : - The a

It is important for businesses to keep financial (accounting) records . It helps answers some basic questions about the business operations: Did the business make a profit/loss? - It's a measure of performance and an important information for governments, shareholders, managers... How much do we owe our suppliers? - If not paid on time suppliers may decline serving the business; How much are owed by customers? - Carefully tracking trade receivables to avoid cash-flow proble

Chapter 28 - Operations Strategy Learning Objective: Operations Planning and Critical Path Major strategic Operations decisions involve major projects : Relocation; Factory expansion ; Change in production/operations methods; Setting up a new IT system ; Installing new machinery. One of the most costly elements of a major project like these has to do with unused or under-used resources (e.g. stocks, idling machinery or labor). Such wastes happen due to different tasks bein

Chapter 28 - Operations Strategy Learning Objective: To understand Lean Production techniques Lean Production is all about producing goods and services with the minimum of wasted resources while maintaining high quality: There are 8 main sources of waste in most industries: Excessive transportation of components, products, and raw materials; Excessive inventory ; Excessive workforce movement reaching for supplies and components; Waiting times caused by delays; Overproducti

Chapter 28 - Operations Strategy Class Objective: To understand the many changes and possible strategic decisions regarding Operations Management Operations Strategic Decisions are also multi-departmental: they require the analysis and will impact various facets of the business. Think of the following Operations Strategic decisions : Expanding or reducing capacity; Locating or relocating a business; Offshoring or reshoring; Outsourcing; Changing operations (production) met

Chapter 27 - Quality Management Learning Objective: To understand benchmarking as a method of quality management Benchmarking is the practice of identifying the best companies in the industry and comparing its performance standards. Benchmarking makes it cheaper and quicker to solve quality problems than if no external comparison were to be made; It helps identifying areas for improvement and therefore helps businesses to focus and direct their efforts; It encourages cross-o

Chapter 27 - Quality Management Learning Objectives: To understand quality control, assurance, and TQM. In your opinion, what is a...

Chapter 26 - Location and Scale Learning Objective: To further understand location decisions and economies/diseconomies of scale You now...

Chapter 26 - Location and Scale Learning Objective: To understand the factors impacting location decisions One of the most important...

Chapter 22 - Marketing Strategy Learning Objective: To understand the different methods of entering international markets Now that we...

Chapter 22 - Marketing Strategy Learning Objectives: To understand pan-global and global-localization approaches to international...

Chapter 22 - Marketing Strategy Learning Objectives: To understand the different impacts of technology on Marketing As you may have...