by Easton, Halsey, McAnally, Hartgraves, Morse
ISBN: 978-1-61853-102-5 | Copyright 2015Tabs
Welcome to Financial & Managerial Accounting for MBAs.
Our main goal in writing this book was to satisfy the needs of today's business manager by creating a contemporary, engaging, and user-oriented textbook. This book is the product of extensive market research including focus groups, market surveys, class tests, manuscript reviews, and interviews with faculty from across the country. We are grateful to the students and faculty who provided us with useful feedback during the preparation of this book.
Financial & Managerial Accounting for MBAs is intended for use in full-time, part-time, executive, and evening MBA programs that include a combined financial and managerial accounting course as part of the curriculum, and one in which managerial decision making and analysis are emphasized. This book easily accommodates mini-courses lasting several days as well as extended courses lasting a full semester.
Financial & Managerial Accounting for MBAs is managerially oriented and focuses on the most salient aspects of accounting. It teaches MBA students how to read, analyze, and interpret accounting data to make informed business decisions. This textbook makes accounting engaging, relevant, and contemporary. To that end, it consistently incorporates real company data, both in the body of each module and throughout assignment material.
The MBA curricula, instructor preferences, and course lengths vary across colleges. Accordingly and to the extent possible, the 24 modules that make up Financial & Managerial Accounting for MBAs were designed independently of one another. This modular presentation enables each college and instructor to "customize" the book to best fit the needs of their students. Our introduction and discussion of financial statements constitute Modules 1, 2, and 3. Module 4 presents the analysis of financial statements with an emphasis on profitability analysis. Modules 5 through 10 highlight major financial accounting topics including assets, liabilities, equity, and off-balance-sheet financing. Module 11 explains forecasting financial statements and Module 12 introduces simple valuation models. Module 13 introduces managerial accounting and is followed by a discussion of cost behavior and cost estimation in Module 14. Module 15 explains cost-volume-profit analysis while Module 16 focuses on using relevant costs to make business decisions. Job and process costing are covered in a single module, Module 17, followed by activity-based costing in Module 18 and the assignment of indirect costs in Module 19. The remaining modules, 20 through 24, highlight managerial accounting topics ranging from operational budgets and variance analysis to segment reporting, product pricing, and capital budgeting. At the end of the book, we include several useful resources. Appendix A contains Compound interest tables. Appendix B details the process for preparing and analyzing the statement of Cash Flow. Appendix C is an illustrative case that applies the techniques described in the financial accounting modules (1–12) to an actual company, Kimberly-Clark. Appendix D is a chart of accounts used in the book.
As MBA instructors, we recognize that the core MBA accounting course is not directed toward accounting majors. Financial & Managerial Accounting for MBAs embraces this reality. This book highlights reporting, analysis, interpretation, and decision making. In the financial accounting modules, we incorporate the following financial statement effects template when relevant to train MBA students in understanding the economic ramifications of transactions and their impact on all key financial statements. This analytical tool is a great resource for MBA students in learning accounting and applying it to their future courses and careers. Each transaction is identified in the “Transaction” column. Then, the dollar amounts (positive or negative) of the financial statement effects are recorded in the appropriate balance sheet or income statement columns. The template also reflects the statement of cash flow effects (via the cash column) and the statement of stockholders’ equity effects (via the contributed capital and earned capital columns). The earned capital account is immediately updated to reflect any income or loss arising from each transaction (denoted by the arrow line from net income to earned capital). This template is instructive as it reveals the financial impacts of transactions, and it provides insights into the effects of accounting choices.
In the financial accounting portion of the book, each module’s content is explained through the accounting and reporting activities of real companies. To that end, each module incorporates a “focus company” for special emphasis and demonstration. The enhanced instructional value of focus companies comes from the way they engage MBA students in real analysis and interpretation. Focus companies were selected based on the industries that MBA students typically enter upon graduation. We apply a similar approach to the managerial accounting modules, but limited access to internal accounting information prevents us from illustrating all managerial accounting topics using real company data. We do, however, incorporate real world examples throughout each module. Each managerial accounting module is presented in context using real world scenarios from a variety of service, retail, and manufacturing companies. The following table lists focus companies by module.
|Module 1||Berkshire Hathaway||Module 14||Square|
|Module 2||Apple||Module 15||DuPont|
|Module 3||Apple||Module 16||Uber|
|Module 4||Walmart||Module 17||Samsung|
|Module 5||Pfizer||Module 18||Unilever|
|Module 6||Cisco||Module 19||Whole Foods|
|Module 7||Verizon||Module 20||Roku|
|Module 8||IBM||Module 21|
|Module 9||Module 22||Southwest Airlines|
|Module 10||Southwest Airlines||Appendix 23||Volkswagen|
|Module 11||Procter & Gamble||Appendix 24||Amazon|
|Module 12||Nike||Appendix B||Starbucks|
|Module 13||ModCloth||Appendix C||Kimberly-Clark|
Market research and reviewer feedback tell us that one of instructors’ greatest frustrations with other MBA textbooks is their lack of real company data. We have gone to great lengths to incorporate real company data throughout each module to reinforce important concepts and engage MBA students. We engage nonaccounting MBA students specializing in finance, marketing, management, real estate, operations, and so forth, with companies and scenarios that are relevant to them. For representative examples, See pages 4-7, 5-15, and 6-10.
One primary goal of a MBA financial accounting course is to teach students the skills needed to apply their accounting knowledge to solving real business problems and making informed business decisions. With that goal in mind, Managerial Decision boxes in each module encourage students to apply the material presented to solving actual business scenarios. For representative examples, See pages 2-35, 4-14, 7-23, and 8-9.
Mid-Module and Module-End Reviews
Financial accounting can be challenging — especially for MBA students lacking business experience or previous exposure to business courses. To reinforce concepts presented in each module and to ensure student comprehension, we include mid-module and module-end reviews that require students to recall and apply the financial accounting techniques and concepts described in each module. For representative examples, See pages 4-8, 7-11, 8-14, and 9-16.
Excellent, Class-Tested Assignment Materials
Excellent assignment material is a must-have component of any successful textbook (and class). In keeping with the rest of the book, we used real company data extensively. We also ensured that assignments reflect our belief that MBA students should be trained in analyzing accounting information to make business decisions, as opposed to working on mechanical bookkeeping tasks. Assignments encourage students to analyze accounting information, interpret it, and apply the knowledge gained to a business decision. For representative examples, See pages 4-37, 6-45, and 9-41.
Forth Edition Changes
Based on classroom use and reviewer feedback, a number of substantive changes have been made in this edition to further enhance the MBA students’ experiences:
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|Module 01: Financial Accounting for MBAs (pg. 1-1)|
|Module 02: Introducing Financial Statements and Transaction Analysis (pg. 2-1)|
|Module 03: Accounting Adjustments and Constructing Financial Statements (pg. 3-1)|
|Module 04: Analyzing and Interpreting Financial Statements (pg. 4-1)|
|Module 05: Reporting and Analyzing Operating Income (pg. 5-1)|
|Module 06: Reporting and Analyzing Operating Assets (pg. 6-1)|
|Module 07: Reporting and Analyzing Nonowner Financing (pg. 7-1)|
|Module 08: Reporting and Analyzing Owner Financing (pg. 8-1)|
|Module 09: Reporting and Analyzing Intercorporate Investments (pg. 9-1)|
|Module 10: Reporting and Analyzing Off-Balance-Sheet Financing (pg. 10-1)|
|Module 11: Forecasting Financial Statements (pg. 11-1)|
|Module 12: Analyzing and Valuing Equity Securities (pg. 12-1)|
|Module 13: Managerial Accounting for MBAs (pg. 13-1)|
|Module 14: Cost Behavior, Activity Analysis, and Cost Estimation (pg. 14-1)|
|Module 15: Cost-Volume-Profit Analysis and Planning (pg. 15-1)|
|Module 16: Relevant Costs and Benefits for Decision Making (pg. 16-1)|
|Module 17: Product Costing: Job and Process Operations (pg. 17-1)|
|Module 18: Activity-Based Costing, Customer Profitability, and Activity-Based Management (pg. 18-1)|
|Module 19: Additional Topics in Product Costing (pg. 19-1)|
|Module 20: Pricing and Other Product Management Decisions (pg. 20-1)|
|Module 21: Operational Budgeting and Profit Planning (pg. 21-1)|
|Module 22: Standard Costs and Performance Reports (pg. 22-1)|
|Module 23: Segment Reporting, Transfer Pricing, and Balanced Scorecard (pg. 23-1)|
|Module 24: Capital Budgeting Decisions (pg. 24-1)|
|Appendix A: Compound Interest Tables (pg. A-1)|
|Appendix B: Constructing the Statement of Cash Flows (pg. B-1)|
|Appendix D: Chart of Accounts with Acronyms (pg. D-1)|
Last Updated: Jan 4 2016
Last Updated: Jan 4 2016
Practice Quiz Solutions
Last Updated: Jan 12 2017
Appendix C PDF
Last Updated: Jan 2 2016
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