| |
| |
Preface | |
| |
| |
| |
Introduction | |
| |
| |
The Big Paradox | |
| |
| |
What is Financial Management? | |
| |
| |
Specifics: Areas Addressed Here | |
| |
| |
Project-Level Controls | |
| |
| |
Time value of money | |
| |
| |
Entrepreneurial Issues | |
| |
| |
Review Questions And Exercises | |
| |
| |
| |
Understanding Financial Statements | |
| |
| |
Introduction | |
| |
| |
Generally Accepted Accounting Principles | |
| |
| |
Cash and accrual bases: Two ways to look at accounting | |
| |
| |
Cash Basis of Accounting | |
| |
| |
Accrual Basis of Accounting | |
| |
| |
Accounts | |
| |
| |
Account Hierarchy | |
| |
| |
Financial Reports | |
| |
| |
Bookkeeping | |
| |
| |
The Balance Sheet | |
| |
| |
Balance Sheet layout | |
| |
| |
Balance Sheet Account Categories in Detail | |
| |
| |
The Fundamental Accounting Equation | |
| |
| |
Asset Values | |
| |
| |
The Fundamental Equation and Owners' Risk | |
| |
| |
Balance Sheet for Fudd Associates, Inc | |
| |
| |
Key Accounts | |
| |
| |
The Income Statement | |
| |
| |
Revisiting the Airport Screen | |
| |
| |
Components of an Income Statement - More Details | |
| |
| |
The Babel Tower of Accounting | |
| |
| |
The Statement of Cash Flows | |
| |
| |
Contract Backlog | |
| |
| |
Public Corporations | |
| |
| |
Review Questions And Exercises | |
| |
| |
| |
Analyzing Company Financial Data | |
| |
| |
Introduction | |
| |
| |
Vertical Analysis: Financial Ratios | |
| |
| |
Liquidity Indicators: Can this company get cash in a hurry? | |
| |
| |
Profitability Indicators: Is this company making enough profit? | |
| |
| |
Efficiency Indicators: How long does it take a company to turn over its money? | |
| |
| |
Capital Structure Indicators: How committed are the owners? | |
| |
| |
Other Indicators | |
| |
| |
Asset Newness | |
| |
| |
Horizontal Analysis: Tracking Financial Trends | |
| |
| |
Time Series Graphs | |
| |
| |
Conclusion | |
| |
| |
Review Questions And Exercises | |
| |
| |
| |
Accounting Basics | |
| |
| |
Introduction | |
| |
| |
Transaction Processing | |
| |
| |
Posting entries to the ledger | |
| |
| |
Relationship of work- in-progress and revenue/expense accounts | |
| |
| |
Closing the accounting cycle | |
| |
| |
Recognition of income | |
| |
| |
Transactions during a period | |
| |
| |
Posting to the general ledger during the accounting period | |
| |
| |
Closing actions at the end of the period | |
| |
| |
Review Questions And Exercises | |
| |
| |
| |
Project-Level Cost Control | |
| |
| |
Objectives of Project-level Cost Control in Construction | |
| |
| |
Unique Aspects of Construction Cost Control | |
| |
| |
Types of Costs | |
| |
| |
The Construction Estimate | |
| |
| |
Cost Control System | |
| |
| |
Building a Cost Control System | |
| |
| |
Cost Accounts | |
| |
| |
Cost Account Structure | |
| |
| |
Project Cost Code Structure | |
| |
| |
Cost Accounts for Integrated Project Management | |
| |
| |
Earned Value Analysis | |
| |
| |
Labor Data Cost Collection | |
| |
| |
Charges for Indirect and Overhead Expense | |
| |
| |
Review Questions And Exercises | |
| |
| |
| |
Forecasting Financial Needs | |
| |
| |
Importance of Cash Management | |
| |
| |
Understanding cash flow | |
| |
| |
Retainage | |
| |
| |
Project cost, value and cash profiles | |
| |
| |
Cash Flow Calculation -A Simple Example | |
| |
| |
Peak Financial Requirements | |
| |
| |
Getting Help from the Owner | |
| |
| |
Optimizing Cash Flow | |
| |
| |
Developing a Project Cash flow Estimate | |
| |
| |
Using software for cash flow computations | |
| |
| |
Company-level cash flow planning | |
| |
| |
Strategic cash flow management: "Cash Farming" | |
| |
| |
Project and General Overhead | |
| |
| |
Fixed Overhead | |
| |
| |
Considerations in Establishing Fixed Overhead | |
| |
| |
Breakeven Analysis | |
| |
| |
Basic Relationships Governing the Breakeven Point | |
| |
| |
Review Questions And Exercises | |
| |
| |
| |
Time Value of Money and Evaluating Investments | |
| |
| |
Introduction | |
| |
| |
Time value of money | |
| |
| |
Interest | |
| |
| |
Simple and compound interest | |
| |
| |
Nominal and effective rate | |
| |
| |
Equivalence and MARR | |
| |
| |
Discount Rate | |
| |
| |
Importance of Equivalence | |
| |
| |
Inflation | |
| |
| |
Sunk Costs | |
| |
| |
Cash flow diagrams | |
| |
| |
Annuities | |
| |
| |
Conditions for Annuity Calculations | |
| |
| |
Calculating the Future Value of a Series of Payments | |
| |
| |
Summary of equivalence formulas | |
| |
| |
Worth Analysis Techniques: An Overview | |
| |
| |
Present Worth Analysis | |
| |
| |
Investments with different life spans | |
| |
| |
Equivalent Annual Worth (EAW | |
| |
| |
Recovering investment capital | |
| |
| |
Internal Rate of Return | |
| |
| |
A Practical Example Using PW Analysis | |
| |
| |
Comparison Using EAW | |
| |
| |
An IRR Example - Owner Financing Using Bonds | |
| |
| |
Review Questions And Exercises | |
| |
| |
| |
Construction Loans and Credit | |
| |
| |
Introduction | |
| |
| |
The Construction Financing Process | |
| |
| |
An Example Developmental Project | |
| |
| |
The Amount of the Loan | |
| |
| |
How is the Cap Rate Determined? | |
| |
| |
Mortgage Loan Commitment | |
| |
| |
Construction Loan | |
| |
| |
Lines of Credit | |
| |
| |
Interest Paid on outstanding balance | |
| |
| |
Commitment fees | |
| |
| |
Compensating balances | |
| |
| |
Clean-up requirement | |
| |
| |
Collaterals | |
| |
| |
Accounts Receivable Financing | |
| |
| |
Trade Credits | |
| |
| |
Long Term Financing | |
| |
| |
Loans with end-of term balloon payments | |
| |
| |
Review Questions And Exercises | |
| |
| |
| |
The Impact of Taxes | |
| |
| |
Introduction | |
| |
| |
Types of taxes | |
| |
| |
Income Tax Systems | |
| |
| |
Alternatives for company legal organization | |
| |
| |
Taxable Income: corporations | |
| |
| |
Taxable income: individuals | |
| |
| |
Itemized deductions, standard deductions and personal exemptions | |
| |
| |
The Tax Significance of Depreciation | |
| |
| |
Calculating Depreciation | |
| |
| |
Straight-Line Method | |
| |
| |
The Production Method | |
| |
| |
Depreciation Based on Current Law | |
| |
| |
Marginal Tax Rates | |
| |
| |
Tax credits | |
| |
| |
Tax payroll Withholding | |
| |
| |
Tax payment schedules | |
| |
| |
Marginal, average and effective tax rates | |
| |
| |
Net Operating Losses | |
| |
| |
Taxes on dividends and long-term capital gains | |
| |
| |
Alternative Minimum Tax | |
| |
| |
Summary | |
| |
| |
Review Questions And Exercises | |
| |
| |
| |
Typical Chart of Accounts | |
| |
| |
| |
Further Illustrations of Transactions | |
| |
| |
| |
Compound Interest Tables | |
| |
| |
Index | |