MFD 1 Summary (EMFD-17)

MFD 1
SUMMARY
Sarah van Notten
ACADEMIC YEAR 2020 - 2021 | BLOCK C

,SARAH VAN NOTTEN MFD 1 | ACADEMIC YEAR 2020 – 2021 | BLOCK C




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, SARAH VAN NOTTEN MFD 1 | ACADEMIC YEAR 2020 – 2021 | BLOCK C




TABLE OF CONTENTS

LU1: ANALYZING OPERATING RESULTS .............................................................................. 5
1.1 The Balance Sheet ........................................................................................................ 5
1.2 The Income Statement ................................................................................................. 6
1.3 Financial Statement Analysis ........................................................................................ 7
1.4 Ratio Analysis............................................................................................................... 8
1.5 Example Questions ..................................................................................................... 11
LU2: PREDICTING PROFITABILITY AND CONTROLLING COSTS ............................................ 13
2.1 Basic Cost Concepts .................................................................................................... 13
2.2 Cost Calculations ........................................................................................................ 15
2.3 Cost-Volume-Profit Analysis ....................................................................................... 16
2.4 Financial Leverage ...................................................................................................... 17
2.5 Operating Leverage .................................................................................................... 18
2.6 Example Questions ..................................................................................................... 19
LU3: MANAGING WORKING CAPITAL ............................................................................... 21
3.1 Cash Management ..................................................................................................... 21
3.2 Working Capital ......................................................................................................... 23
3.3 Cash Conversion Cycle ................................................................................................ 24
3.4 Working Capital Policies ............................................................................................. 25
3.5 Example Questions ..................................................................................................... 26
LU4: MANAGING CASH FLOW .......................................................................................... 27
4.1 Cash Flow Concepts & Classifications .......................................................................... 27
4.2 Making the Cash Flow Statement................................................................................ 29
4.3 The Statement of Cash Flows: T-Accounts ................................................................... 30
4.4 Cash Budgeting .......................................................................................................... 30
RATIO ANALYSIS OVERVIEW ............................................................................................ 31




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