Professional Documents
Culture Documents
Unit 17
Introduction to Accounting
Dr. J. Michael Bennett, P. Eng., PMP,
UOIT,
Version 2014-I-01
Extrapolation Estimating
17-2
2014-I-01
Change Record
2014-I-01 Initial Creation
17-3
2014-I-01
Course Outline
1.
2.
3.
4.
5.
6.
7.
8.
9.
17-4
Engineering Economics
General Economics
1.
Microeconomics
2.
Macroeconomics
3.
Money and the Bank of
Canada
Engineering Estimation
Interest and Equivalence
Present Worth Analysis
Annual Cash Flow
Rate of Return Analysis
Picking the Best Choice
Other Choosing Techniques
2014-I-01
0.1-5
2014-I-01
17. 6
2014-I-01
17. 7
2014-I-01
17. 8
2014-I-01
17. 9
2014-I-01
2014-I-01
17. 11
2014-I-01
17. 12
2014-I-01
Example
Count Accountant forgot to include a $10K
loan used to purchase a $25K test stand
(which he forgot to include). What changes
should he make to the BS?
17-13
2014-I-01
+$10K
17. 14
2014-I-01
2014-I-01
17. 16
2014-I-01
17. 17
2014-I-01
17. 18
2014-I-01
.3 Financial Ratios
Liquidity ratios assess firms ability to meet short term financial
obligations & weather fluctuations in cash flows
Reserve of cash and liquid assets called working capital
17. 19
2014-I-01
CR= CA/CL
4314
2489
CR=1.73(2011)
17-20
2014-I-01
AT = QA/CL
431+2489
2489
AT = 1.17
17-21
2014-I-01
smaller the ratio, the more dependent a firm is on debt and the higher
the risk of not being able to manage debt
comparison to industry norms/trend analysis necessary
17. 22
2014-I-01
ER=TOE/(TOE+TL)
ER= 3318/8296=0.40
17-23
2014-I-01
ITR=Sales/Inventories
ITR=12440/1244=10
17-24
2014-I-01
ROA=NPBXI/TA
ROA=781/8296=9.4%
17-25
2014-I-01
ROE=NPBXI/TE
ROA=781/3318=
2.3%
17-26
2014-I-01
17-27
2014-I-01
17. 28
2014-I-01
Direct costs:
Indirect costs:
Absorption costing:
Summary
Elements of Financial Accounting
The Balance Sheet
The Income Statement
Estimated Values in Financial Statements
Financial Ratio Analysis
17. 31
2014-I-01