Financial and Managerial Accounting

What you'll learn

• Explain how financial and managerial accounting serve different users, apply the accounting equation and the accrual basis, and describe the roles of standard setters, auditors and internal control.
• Read a balance sheet critically, analyse working capital, measurement bases, intangible assets, leases and provisions, and prepare common-size statements to reveal a business model.
• Interpret the income statement and its subtotals, apply the five-step revenue recognition model, and assess earnings quality using accrual and growth screens.
• Reconcile net income to operating cash flow with the indirect method, calculate free cash flow, interpret cash flow patterns and measure and manage the cash conversion cycle.
• Identify which reporting framework applies to Canadian entities, navigate continuous disclosure documents, compare IFRS with US GAAP and evaluate non-GAAP measures.
• Calculate and interpret profitability, efficiency, liquidity and solvency ratios consistently, using appropriate benchmarks and avoiding common pitfalls.
• Decompose return on equity with three- and five-step DuPont analysis, calculate NOPAT, invested capital, ROIC and economic profit, and link them to operating value drivers.
• Classify costs by behaviour, estimate cost functions with high-low and regression methods, and apply cost-volume-profit analysis, break-even, margin of safety and operating leverage.
• Compare job, process and activity-based costing, apply predetermined overhead rates, and use activity-based and customer profitability analysis to reveal cross-subsidies.
• Prepare and evaluate master and cash budgets, analyse results with flexible budgets and price, quantity and volume variances, and assess the behavioural effects of budgets and controls.
• Identify relevant costs and apply incremental analysis to make-or-buy, special order, keep-or-drop and constrained-resource decisions, and evaluate cost-based, value-based and target pricing.
• Conduct an integrated financial diagnosis of a company from its statements and managerial data, and present a recommendation with conditions, monitoring measures and aligned incentives.