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第16版《管理会计》的变动内容
绪论：管理会计概述1
商业聚焦　管理会计：不只是数字计算1
P.1　管理会计是什么2
P.2　为什么管理会计对你的职业生涯如此重要5
P.3　管理会计：超越数字的管理9
本章小结/术语表/思考题18
练习题19
第1章　管理会计与成本概念21
商业聚焦　削减管理费用21
1.1　按成本对象进行的成本分类22
1.2　制造业企业的成本分类23
1.3　用于编制报表的成本分类25
1.4　用于预测成本性态的成本分类27
1.5　用于决策的成本分类34
1.6　依据不同目的选择不同的成本分类35
本章小结37
复习题：成本术语38
术语表39
思考题/练习题40
问题42
案例43
附录1A　质量成本47
小结50
术语表/问题51
第2章　分批成本法：计算单位生产成本52
商业聚焦　高校T恤公司：
为美国150多所高校服务52
2.1　分批成本法综述53
2.2　分批成本法举例54
2.3　分批成本法：管理者的视角61
2.4　分批成本法使用多重预计制造费用分配率62
2.5　分批成本法：对外财务报告的视角65
2.6　分批成本法在服务业公司的应用66
本章小结67
复习题：计算单位生产成本67
术语表/思考题69
练习题70
问题72
案例74
附录2A　基于作业的完全成本法75
术语表/问题78
案例78
附录2B　预计制造费用分配率及生产能力80
问题83
案例83
第3章　分批成本法：成本流转和对外报告86
商业聚焦　托尔兄弟公司的存货核算86
3.1　分批成本法：成本流转87
3.2　产成品成本表与销货成本表97
3.3　制造费用分配不足与分配过度：详述99
本章小结/复习题：分批成本核算系统中的成本流转104
术语表/思考题107
练习题108
问题109
案例111
第4章　分步成本法113
商业聚焦　“一抹即净”的成本核算113
4.1　分批成本法和分步成本法的比较114
4.2　分步成本法下的成本流转115
4.3　分步成本法计算：3个关键概念118
4.4　加权平均法：举例119
4.5　经营成本法125
本章小结125
复习题：分步成本流转和成本核算126
术语表/思考题128
练习题129
问题131
案例132
附录4A　先进先出法133
练习题/问题/案例138
附录4B　服务部门成本分配139
练习题142
问题/案例142
第5章　本量利关系145
商业聚焦　摇滚小子和莱恩娱乐公司拉动了本量利杠杆145
5.1　本量利分析的基础147
5.2　保本分析和目标利润分析159
5.3　在选择成本结构中考虑本量利因素163
5.4　设计销售佣金167
5.5　销货组合167
本章小结/复习题：本量利关系170
术语表/思考题173
练习题173
问题175
案例177
附录5A　分析混合成本178
术语表183
练习题/问题184
第6章　变动成本法与分部报告：管理工具187
商业聚焦　汽车产业的错误激励机制187
6.1　变动成本法与完全成本法概述188
6.2　变动成本法与完全成本法实例190
6.3　变动成本法与完全成本法之间收益的协调194
6.4　变动成本法与边际贡献法的优点196
6.5　分部利润表与边际贡献法198
6.6　分部利润表实例200
6.7　分部利润表：决策制定与保本分析203
6.8　分部利润表：常见错误205
6.9　利润表：外部报告的视角207
本章小结208
复习题1：变动成本法与完全成本法
的比较209
复习题2：分部利润表211
术语表/思考题212
练习题213
问题216
案例218
附录6A　超级变动成本法219
术语表223
问题223
第7章　作业成本法：帮助决策的工具224
商业聚焦　航空公司燃油成本的动因224
7.1　作业成本法概述225
7.2　作业成本核算系统的设计229
7.3　作业成本法的运行233
7.4　传统成本核算系统与作业成本法下产品成本的比较243
7.5　确定流程改进的目标247
7.6　作业成本法与外部报告248
7.7　作业成本法的局限248
本章小结/复习题：作业成本法249
术语表251
思考题/练习题252
问题255
附录7A　时间驱动作业成本法：基于微软Excel的方式257
问题262
第8章　全面预算264
商业聚焦　危机管理规划：美国内战信托基金264
8.1　企业为何以及如何编制预算265
8.2　全面预算概述267
8.3　编制全面预算270
本章小结/复习题：预算表289
术语表291
思考题/练习题292
问题295
案例299
第9章　弹性预算和业绩分析301
商业聚焦　公司为什么需要弹性预算呢301
9.1　差异分析循环302
9.2　弹性预算303
9.3　弹性预算差异307
9.4　多成本动因的弹性预算313
9.5　一些常见错误315
本章小结317
复习题：运用弹性预算进行差异分析317
术语表/思考题/练习题319
问题322
案例324
第10章　标准成本和差异326
商业聚焦　管理材料和人工326
10.1　标准成本的制定327
10.2　成本差异分析的通用模型331
10.3　标准成本的应用：直接材料差异333
10.4　标准成本的应用：直接人工差异336
10.5　标准成本的应用：变动制造费用成本差异338
10.6　材料差异中一个重要的细节341
10.7　标准成本：管理的含义343
本章小结/复习题：标准成本344
术语表346
思考题/练习题347
问题348
案例349
附录10A　标准成本系统中预计制造费用分配率和制造费用分析357
术语表/练习题/问题357
附录10B　标准成本系统：Excel角度的财务报告359
练习题/问题366
第11章　分权制组织中的业绩考核368
商业聚焦　稀缺性战略368
11.1　组织中的分权369
11.2　责任会计370
11.3　评价投资中心业绩：投资报酬率371
11.4　剩余收益375
11.5　经营业绩衡量378
11.6　平衡计分卡381
本章小结/复习题：ROI和RI385
术语表387
思考题/练习题387
问题388
案例390
附录11A　转移定价392
复习题：转让定价398
术语表/练习题399
问题/案例399
附录11B　服务部门成本401
术语表406
练习题406
第12章　差量分析：决策的关键407
商业聚焦　理解决策的质量407
12.1　决策：6个关键概念408
12.2　确定相关成本和相关收益：一个案例410
12.3　差量分析：总量成本法和差量成本法412
12.4　增加或关闭生产线和其他分部415
12.5　自制还是外购决策418
12.6　特殊订单决策422
12.7　业务量权衡决策423
12.8　联产品成本和出售或深加工决策428
12.9　作业成本法和相关成本432
本章小结432
复习题：差量分析432
术语表/思考题433
练习题434
问题437
案例439
附录12A　定价决策441
小结/术语表453
练习题454
问题454
第13章　资本预算决策456
商业聚焦　商业运输“舰队”采用了电动卡车456
13.1　资本预算概述457
13.2　回收期法459
13.3　净现值法462
13.4　内含报酬率法468
13.5　净现值法的拓展470
13.6　不确定的现金流量473
13.7　优先决策：投资项目的排序474
13.8　简单报酬率法475
13.9　投资项目的事后审计477
本章小结478
复习题：资本预算方法的比较478
术语表/思考题480
练习题481
问题/案例482
附录13A　现值的概念483
复习题：基本的现值计算486
术语表/练习题487
附录13B　现值系数表488
附录13C　所得税与净现值法490
小结492
练习题/问题492
第14章　现金流量表494
商业聚焦　了解现金流量494
14.1　现金流量表：核心概念496
14.2　现金流量表举例504
14.3　解释现金流量表511
本章小结513
复习题514
术语表518
思考题/练习题518
问题520
附录14A　确定经营活动现金流量净额的直接法523
问题525
第15章　财务报表分析526
商业聚焦　可口可乐企图“减脂”526
15.1　财务报表分析的局限性527
15.2　比较财务报表及同基财务报表527
15.3　比率分析：流动性532
15.4　比率分析：资产管理534
15.5　比率分析：负债管理536
15.6　比率分析：盈利能力538
15.7　比率分析：市场业绩541
15.8　比率及比较比率数据来源的总结543
本章小结545
复习题：选择的比率及财务杠杆545
术语表548
思考题/练习题549
问题551
综合练习555
Contents
Contents
PROLOGUE
Managerial Accounting: An Overview 1
What Is Managerial Accounting? 2
Planning 3
Controlling 4
Decision Making 4
Why Does Managerial Accounting Matter to Your Career? 5
Business Majors 5
Accounting Majors 7
Professional Certification—A Smart Investment 7
Managerial Accounting: Beyond the Numbers 9
An Ethics Perspective 9
Code of Conduct for Management Accountants 9
A Strategic Management Perspective 10
An Enterprise Risk Management Perspective 12
A Corporate Social Responsibility Perspective 15
A Process Management Perspective 16
A Leadership Perspective 17
Intrinsic Motivation 17
Extrinsic Incentives 17
Cognitive Bias 18
Summary 18
Glossary 18
Questions 19
Exercises 19
CHAPTER 1
Managerial Accounting and Cost Concepts 21
Cost Classifications for Assigning Costs to Cost Objects 22
Direct Cost 23
Indirect Cost 23
Cost Classifications for Manufacturing Companies 23
Manufacturing Costs 23
Direct Materials 24
Direct Labor 24
Manufacturing Overhead 24
Nonmanufacturing Costs 25
Cost Classifications for Preparing Financial Statements 25
Product Costs 26
Period Costs 26
Cost Classifications for Predicting Cost Behavior 27
Variable Cost 27
Fixed Cost 29
The Linearity Assumption and the Relevant Range 30
Mixed Costs 31
Cost Terminology—A Closer Look 33
Cost Classifications for Decision Making 34
Differential Cost and Revenue 34
Sunk Cost and Opportunity Cost 35
Using Different Cost Classifications for Different Purposes 35
The Traditional Format Income Statement 36
The Contribution Format Income Statement 37
Summary 37
Review Problem: Cost Terms 38
Glossary 39
Questions 40
Exercises 40
Problems 42
Cases 43
Appendix 1A: Cost of Quality 44
Quality Cost Reports 47
International Aspects of Quality 50
Summary (Appendix 1A) 50
Glossary (Appendix 1A) 51
CHAPTER 2
Job-Order Costing: Calculating Unit Product Costs 52
Job-Order Costing—An Overview 53
Job-Order Costing—An Example 54
Measuring Direct Materials Cost 55
Job Cost Sheet 55
Measuring Direct Labor Cost 56
Computing Predetermined Overhead Rates 57
Applying Manufacturing Overhead 58
Manufacturing Overhead—A Closer Look 59
The Need for a Predetermined Rate 59
Computation of Total Job Costs and Unit Product Costs 60
Job-Order Costing—A Managerial Perspective 61
Choosing an Allocation Base—A Key to Job Cost Accuracy 62
Job-Order Costing Using Multiple Predetermined Overhead Rates 62
Multiple Predetermined Overhead Rates—A Departmental Approach 62
Multiple Predetermined Overhead Rates—An Activity-Based Approach 64
Job-Order Costing—An External Reporting Perspective 65
Overhead Application and the Income Statement 65
Job Cost Sheets: A Subsidiary Ledger 66
Job-Order Costing in Service Companies 66
Summary 67
Review Problem: Calculating Unit Product Costs 67
Glossary 69
Questions 69
Applying Excel 69
Exercises 70
Problems 72
Case 74
Appendix 2A: Activity-Based Absorption Costing 75
Glossary (Appendix 2A) 78
Appendix 2A: Exercises, Problems, and Case 78
Appendix 2B: The Predetermined Overhead Rate and Capacity 80
Appendix 2B: Exercises, Problem, and Case 83
CHAPTER 3
Job-Order Costing: Cost Flows and External Reporting 86
Job-Order Costing—The Flow of Costs 87
The Purchase and Issue of Materials 88
Issue of Direct and Indirect Materials 89
Labor Cost 90
Manufacturing Overhead Costs 91
Applying Manufacturing Overhead 91
The Concept of a Clearing Account 92
Nonmanufacturing Costs 93
Cost of Goods Manufactured 94
Cost of Goods Sold 94
Schedules of Cost of Goods Manufactured and Cost of Goods Sold 97
Underapplied and Overapplied
Overhead—A Closer Look 99
Computing Underapplied and Overapplied Overhead 99
Disposition of Underapplied or Overapplied
Overhead Balances 101
Closed to Cost of Goods Sold 101
Closed Proportionally to Work in Process, Finished Goods, and Cost of Goods Sold 101
Comparing the Two Methods for Disposing of
Underapplied or Overapplied Overhead 103
A General Model of Product Cost Flows 103
Summary 104
Review Problem: The Flow of Costs in a Job-Order Costing System 105
Glossary 107
Questions 108
Exercises 108
Problems 109
Cases 111
CHAPTER 4
Process Costing 113
Comparison of Job-Order and Process Costing 114
Similarities between Job-Order and Process Costing 114
Differences between Job-Order and Process Costing 114
Cost Flows in Process Costing 115
Processing Departments 115
The Flow of Materials, Labor, and Overhead Costs 116
Materials, Labor, and Overhead Cost Entries 117
Materials Costs 117
Labor Costs 117
Overhead Costs 117
Completing the Cost Flows 118
Process Costing Computations: Three Key Concepts 118
Key Concept #1 119
Key Concept #2 119
Key Concept #3 119
The Weighted-Average Method: An Example 119
Step 1: Compute the Equivalent Units of Production 121
Step 2: Compute the Cost per Equivalent Unit 123
Step 3: Assign Costs to Units 123
Step 4: Prepare a Cost Reconciliation Report 124
Operation Costing 125
Summary 125
Review Problem: Process Cost Flows and Costing Units 126
Glossary 128
Questions 128
Exercises 129
Problems 131
Case 132
Appendix 4A: FIFO Method 133
Appendix 4A: Exercises, Problems, and Case 138
Appendix 4B: Service Department Cost Allocations 139
Appendix 4B: Exercises, Problems, and Case 142
CHAPTER 5
Cost-Volume-Profit Relationships 145
The Basics of Cost-Volume-Profit (CVP) Analysis 147
Contribution Margin 147
CVP Relationships in Equation Form 149
CVP Relationships in Graphic Form 150
Preparing the CVP Graph 150
Contribution Margin Ratio (CM Ratio) and the Variable Expense Ratio 152
Applications of the Contribution Margin Ratio 154
Additional Applications of CVP Concepts 155
Example 1: Change in Fixed Cost and Sales Volume 155
Alternative Solution 1 156
Alternative Solution 2 156
Example 2: Change in Variable Costs and Sales Volume 156
Solution 156
Example 3: Change in Fixed Cost, Selling Price, and Sales Volume 156
Solution 157
Example 4: Change in Variable Cost, Fixed Cost, and Sales Volume 157
Solution 157
Example 5: Change in Selling Price 158
Solution 158
Break-Even and Target Profit Analysis 159
Break-Even Analysis 159
The Equation Method 159
The Formula Method 159
Break-Even in Dollar Sales 160
Target Profit Analysis 160
The Equation Method 161
The Formula Method 161
Target Profit Analysis in Terms of Dollar Sales 161
The Margin of Safety 162
CVP Considerations in Choosing a Cost Structure 163
Cost Structure and Profit Stability 163
Operating Leverage 164
Structuring Sales Commissions 167
Sales Mix 167
The Definition of Sales Mix Sales Mix and Break-Even Analysis Summary 170
Review Problem: CVP Relationships 170
Glossary 173
Questions 173
Exercises 173
Problems 175
Cases 177
Appendix 5A: Analyzing Mixed Costs 178
Glossary (Appendix 5A) 183
Appendix 5A: Exercises and Problems 184
CHAPTER 6
Variable Costing and Segment Reporting: Tools for Management 187
Overview of Variable and Absorption Costing 188
Variable Costing 188
Absorption Costing 188
Selling and Administrative Expenses 189
Summary of Differences 189
Variable and Absorption Costing—An Example 190
Variable Costing Contribution Format Income Statement 190
Absorption Costing Income Statement 192
Reconciliation of Variable Costing with Absorption Costing Income 194
Advantages of Variable Costing and the Contribution Approach 196
Enabling CVP Analysis 196
Explaining Changes in Net Operating Income 197
Supporting Decision Making 197
Segmented Income Statements and the Contribution Approach 198
Traceable and Common Fixed Costs and the Segment Margin 198
Identifying Traceable Fixed Costs 199
Traceable Fixed Costs Can Become Common Fixed Costs 199
Segmented Income Statements—An Example 200
Levels of Segmented Income Statements 201
Segmented Income Statements—Decision Making and Break-Even Analysis 203
Decision Making 203
Break-Even Analysis 204
Segmented Income Statements—Common Mistakes 205
Omission of Costs 205
Inappropriate Methods for Assigning Traceable Costs among Segments 206
Failure to Trace Costs Directly 206
Inappropriate Allocation Base 206
Arbitrarily Dividing Common Costs among Segments 206
Income Statements—An External Reporting Perspective 207
Companywide Income Statements 207
Segmented Financial Information 208
Summary 208
Review Problem 1: Contrasting Variable and Absorption Costing 209
Review Problem 2: Segmented Income Statements 211
Glossary 212
Questions 213
Exercises 213
Problems 216
Cases 218
Appendix 6A: Super-Variable Costing 219
Glossary (Appendix 6A) 223
Appendix 6A: Problems 223
CHAPTER 7
Activity-Based Costing:
A Tool to Aid Decision Making 224
Activity-Based Costing: An Overview 225
Nonmanufacturing Costs and Activity-Based Costing 225
Manufacturing Costs and Activity-Based Costing 226
Cost Pools, Allocation Bases, and Activity-Based Costing 226
Designing an Activity-Based Costing (ABC) System 229
Steps for Implementing Activity-Based Costing 231
Step 1: Define Activities, Activity Cost Pools, and Activity Measures 232
The Mechanics of Activity-Based Costing 233
Step 2: Assign Overhead Costs to Activity Cost Pools 233
Step 3: Calculate Activity Rates 236
Step 4: Assign Overhead Costs to Cost Objects 237
Step 5: Prepare Management Reports 240
Comparison of Traditional and ABC Product Costs 243
Product Margins Computed Using the Traditional Cost System 243
The Differences between ABC and Traditional Product Costs 244
Targeting Process Improvements 247
Activity-Based Costing and External Reports 248
The Limitations of Activity-Based Costing 248
Summary 249
Review Problem: Activity-Based Costing 250
Glossary 251
Questions 252
Exercises 252
Problems 255
Appendix 7A: Time-Driven Activity-Based Costing: A Microsoft Excel-Based Approach 257
Appendix 7A: Problem 262
CHAPTER 8
Master Budgeting 264
Why and How Do Organizations Create Budgets? 265
Advantages of Budgeting 265
Responsibility Accounting 265
Choosing a Budget Period 266
The Self-Imposed Budget 266
Human Factors in Budgeting 267
The Master Budget: An Overview 267
Seeing the Big Picture 269
Preparing the Master Budget 270
The Beginning Balance Sheet 271
The Budgeting Assumptions 271
The Sales Budget 274
The Production Budget 275
Inventory Purchases—Merchandising Company 276
The Direct Materials Budget 276
The Direct Labor Budget 278
The Manufacturing Overhead Budget 279
The Ending Finished Goods Inventory Budget 280
The Selling and Administrative Expense Budget 281
The Cash Budget 282
The Budgeted Income Statement 286
The Budgeted Balance Sheet 287
Summary 289
Review Problem: Budget Schedules 289
Glossary 291
Questions 291
Exercises 292
Problems 295
Case 299
CHAPTER 9
Flexible Budgets and Performance Analysis 301
The Variance Analysis Cycle 302
Flexible Budgets 303
Characteristics of a Flexible Budget 303
Deficiencies of the Static Planning Budget 303
How a Flexible Budget Works 306
Flexible Budget Variances 307
Activity Variances 307
Revenue and Spending Variances 308
A Performance Report Combining Activity and Revenue and Spending Variances 310
Performance Reports in Nonprofit Organizations 313
Performance Reports in Cost Centers 313
Flexible Budgets with Multiple Cost Drivers 313
Some Common Errors 315
Summary 317
Review Problem: Variance Analysis Using a Flexible Budget 317
Glossary 319
Questions 319
Exercises 319
Problems 322
Case 324
CHAPTER 10
Standard Costs and Variances 326
Standard Costs—Setting the Stage 327
Setting Direct Materials Standards 328
Setting Direct Labor Standards 328
Setting Variable Manufacturing Overhead Standards 329
Using Standards in Flexible Budgets 330
A General Model for Standard Cost Variance Analysis 331
Using Standard Costs—Direct Materials Variances 333
The Materials Price Variance 334
The Materials Quantity Variance 335
Using Standard Costs—Direct Labor Variances 336
The Labor Rate Variance 336
The Labor Efficiency Variance 337
Using Standard Costs—Variable Manufacturing Overhead Variances 338
The Variable Manufacturing Overhead Rate and Efficiency Variances 339
An Important Subtlety in the
Materials Variances 341
Standard Costs—Managerial Implications 343
Advantages of Standard Costs 343
Potential Problems with Standard Costs 343
Summary 344
Review Problem: Standard Costs 344
Glossary 346
Questions 347
Problems 348
Case 349
Appendix 10A: Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System 350
Glossary (Appendix 10A) 357
Appendix 10A: Exercises and Problems 357
Appendix 10B: Standard Cost Systems: A Financial Reporting Perspective Using Microsoft Excel 359
Appendix 10B: Exercises and Problems 366
CHAPTER 11
Performance Measurement in Decentralized Organizations 368
Decentralization in Organizations 369
Advantages and Disadvantages of Decentralization 369
Responsibility Accounting 370
Cost, Profit, and Investment Centers 370
Cost Center 370
Profit Center 370
Investment Center 370
Evaluating Investment Center Performance—Return on Investment 371
The Return on Investment (ROI) Formula 371
Net Operating Income and Operating Assets Defined 371
Understanding ROI 371
Criticisms of ROI 374
Residual Income 375
Motivation and Residual Income 376
Divisional Comparison and Residual Income 377
Operating Performance Measures 378
Throughput (Manufacturing Cycle) Time 378
Delivery Cycle Time 378
Manufacturing Cycle Efficiency (MCE) 379
Example 380
Required: 380
Solution 380
Balanced Scorecard 381
Common Characteristics of Balanced Scorecards 381
A Company’s Strategy and the Balanced Scorecard 383
Tying Compensation to the Balanced Scorecard 385
Summary 385
Review Problem: Return on Investment (ROI) and Residual Income 386
Glossary 387
Questions 387
Exercises 387
Problems 388
Case 390
Appendix 11A: Transfer Pricing 392
Appendix 11A: Review Problem: Transfer Pricing 398
Glossary (Appendix 11A) 399
Appendix 11A: Exercises, Problems, and Case 399
Appendix 11B: Service Department Charges 401
Charging Costs by Behavior 402
Some Cautions in Allocating Service Department Costs 404
Glossary (Appendix 11B) 406
Appendix 11B: Exercises 406
CHAPTER 12
Differential Analysis: The Key to Decision Making 407
Decision Making: Six Key Concepts 408
Key Concept #1 408
Key Concept #2 408
Key Concept #3 408
Key Concept #4 409
Key Concept #5 409
Key Concept #6 409
Identifying Relevant Costs and Benefits: An Example 410
Decision Analysis: The Total Cost and Differential Cost Approaches 412
Why Isolate Relevant Costs? 414
Adding and Dropping Product Lines and Other Segments 415
An Illustration of Cost Analysis 415
A Comparative Format 417
Beware of Allocated Fixed Costs 417
Make or Buy Decisions 418
Strategic Aspects of the Make or Buy Decision 419
An Example of a Make or Buy Decision 419
Opportunity Cost 421
Special Order Decisions 422
Volume Trade-Off Decisions 423
What Is a Constraint? 423
Utilizing a Constrained Resource to Maximize Profits 424
Managing Constraints 427
Joint Product Costs and Sell or Process Further Decisions 428
Santa Maria Wool Cooperative: An Example 429
Activity-Based Costing and Relevant Costs 432
Summary 432
Review Problem: Differential Analysis 432
Glossary 433
Questions 434
Exercises 434
Problems 437
Cases 439
Appendix 12A: Pricing Decisions 441
The Absorption Costing Approach to Cost-Plus Pricing 442
Pricing and Customer Latitude 445
Value-Based Pricing 450
Target Costing 452
Summary (Appendix 12A) 453
Glossary (Appendix 12A) 453
Appendix 12A: Exercises and Problems 454
CHAPTER 13
Capital Budgeting Decisions 456
Capital Budgeting—An Overview 457
Typical Capital Budgeting Decisions 457
Cash Flows versus Net Operating Income 457
Typical Cash Outflows 457
Typical Cash Inflows 458
The Time Value of Money 458
The Payback Method 459
Evaluation of the Payback Method 459
An Extended Example of Payback 460
Payback and Uneven Cash Flows 460
The Net Present Value Method 462
The Net Present Value Method Illustrated 462
Recovery of the Original Investment 465
An Extended Example of the Net Present Value Method 466
The Internal Rate of Return Method 468
The Internal Rate of Return Method Illustrated 468
Comparison of the Net Present Value and Internal Rate of Return Methods 469
Expanding the Net Present Value Method 470
Least-Cost Decisions 470
Uncertain Cash Flows 473
An Example 473
Preference Decisions—The Ranking of Investment Projects 474
Internal Rate of Return Method 474
Net Present Value Method 474
The Simple Rate of Return Method 475
Postaudit of Investment Projects 477
Summary 478
Review Problem: Comparison of Capital Budgeting Methods 478
Glossary 480
Questions 480
Exercises 481
Problems 482
Cases 482
Appendix 13A: The Concept of Present Value 483
Appendix 13A: Review Problem: Basic Present Value Computations 486
Glossary (Appendix 13A) 487
Appendix 13A: Exercises 487
Appendix 13B: Present Value Tables 488
Appendix 13C: Income Taxes and the Net Present Value Method 490
Summary (Appendix 13C) 492
Appendix 13C: Exercises and Problems 492
CHAPTER 14
Statement of Cash Flows 494
The Statement of Cash Flows: Key Concepts 496
Organizing the Statement of Cash Flows 496
Operating Activities: Direct or Indirect Method? 497
The Indirect Method: A Three-Step Process 498
Step 1 498
Step 2 499
Step 3 500
Investing and Financing Activities: Gross Cash Flows 500
Property, Plant, and Equipment 501
Retained Earnings 502
Summary of Key Concepts 503
An Example of a Statement of Cash Flows 504
Operating Activities 505
Step 1 505
Step 2 506
Step 3 507
Investing Activities 507
Financing Activities 508
Seeing the Big Picture 509
Interpreting the Statement of Cash Flows 511
Consider a Company’s Specific Circumstances 511
Consider the Relationships among Numbers 512
Free Cash Flow 512
Earnings Quality 513
Summary 513
Review Problem 514
Glossary 518
Questions 518
Exercises 518
Problems 520
Appendix 14A: The Direct Method of Determining the Net Cash Provided by Operating Activities 523
Appendix 14A: Problems 525
CHAPTER 15
Financial Statement Analysis 526
Limitations of Financial Statement Analysis 527
Comparing Financial Data across Companies 527
Looking beyond Ratios 527
Statements in Comparative and Common-Size Form 527
Dollar and Percentage Changes on Statements 528
Common-Size Statements 530
Ratio Analysis—Liquidity 532
Working Capital 532
Current Ratio 533
Acid-Test (Quick) Ratio 533
Ratio Analysis—Asset Management 534
Accounts Receivable Turnover 534
Inventory Turnover 535
Operating Cycle 535
Total Asset Turnover 536
Ratio Analysis—Debt Management 536
Times Interest Earned Ratio 537
Debt-to-Equity Ratio 537
Equity Multiplier 538
Ratio Analysis—Profitability 538
Gross Margin Percentage 538
Net Profit Margin Percentage 539
Return on Total Assets 540
Return on Equity 540
Ratio Analysis—Market Performance 541
Earnings per Share 541
Price-Earnings Ratio 542
Dividend Payout and Yield Ratios 542
The Dividend Payout Ratio 542
The Dividend Yield Ratio 543
Book Value per Share 543
Summary of Ratios and Sources of Comparative Ratio Data 543
Summary 545
Review Problem: Selected Ratios and Financial Leverage 545
Glossary 548
Questions 548
Exercises 549
Problems 551
Integration Exercises 555