Practical Finance for Operations and Supply Chain Management

Name: Practical Finance for Operations and Supply Chain Management
Brand: MIT Press
Price: 117.99 EUR
Availability: OnlineOnly

Alejandro Serrano Spyros D. Lekkakos(Autor*in)

MIT Press

Erschienen am 10. März 2020

480 Seiten

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Inhalt

Intro
Title Page
Copyright
Dedication
Table of Contents
Foreword
Preface
Acknowledgments
1. Introduction: Finance Is Important, Even to You
1.1. The Archetypal Case of Zara
1.2. The Imperative Need to Understand Finance
1.3. Impact of Operational Events on Firms' Value
1.4. The State of the Practice
1.5. A Final Caveat: Try to Look Past the Jargon
Exercises
2. Financial Accounting
2.1. Origins
2.2. Goals
2.3. Limitations
2.4. Audience
2.5. Elements
2.5.1. The Firm
2.5.2. Trade Partners
2.5.3. Value
2.5.4. Risk
2.5.5. Standards
2.5.6. Basic Accounting Principles
2.5.7. Stocks and Flows
2.5.8. Financial Statements
2.6. Moral Hazard and Adverse Selection Motives
Exercises
3. Accounting Mechanics and the Balance Sheet: The Basics
3.1. Sharon the Shareholder
3.1.1. Brute-Force Approach
3.1.2. Pacioli's Basic Approach
3.1.3. Pacioli's Refined Approach (June)
3.1.4. Pacioli's Refined Approach (July and August)
3.2. Summary
Exercises
4. Accounting Mechanics and the Balance Sheet: Additional Topics
4.1. Ethan and Ryan's New Firm
4.1.1. Recording the Firm's Events until January 8
4.1.2. Preparing the Balance Sheet as of January 8
4.1.3. Recording the Firm's Events until January 31
4.1.4. Preparing the Balance Sheet as of January 31
4.2. The Seven-Item Balance Sheet
4.3. Understanding Amazon's Balance Sheet
4.4. Summary
Exercises
5. Operating Working Capital
5.1. Minimum Cash and Excess Cash
5.2. Operating Working Capital and the Financial Balance Sheet
5.2.1. Discussion: OWC Behavior
5.3. Operations Cycle and the Cash-to-Cash Cycle
5.3.1. Accounts Receivable
5.3.2. Accounts Payable
5.3.3. Inventory
5.3.4. OWC Stock and Flows Connections
5.4. Why Does Your CFO Go Crazy about OWC?
5.5. Operating Working Capital and Working Capital
5.6. Summary
Exercises
6. Measuring Shareholders' Happiness: The Income Statement
6.1. Definition
6.2. Elements
6.3. OPEX and CAPEX
6.3.1. OPEX
6.3.2. CAPEX
6.4. Interpretation
6.5. Example: Understanding Toyota's Income Statement
6.6. Summary
Exercises
7. Tracking Money Changes: The Statement of Cash Flows
7.1. Definition and Derivation
7.1.1. Funds from Operations and Cash Generated from Operations
7.1.2. Algebraic Derivation
7.1.3. Common-Sense Derivation
7.2. The Seven-Item Statement of Cash Flows
7.3. Ethan and Ryan's New Firm Revisited
7.3.1. Derivation
7.3.2. Interpretation and OWC Breakdown
7.4. Calculating the Level of New Investments
7.5. Reconciliation of Statement of Cash Flows
7.5.1. Example: Understanding Tata Motors' Statement of Cash Flows
7.6. Summary
Exercises
8. Accounting for Inventory
8.1. Inventory Valuation in Retailing and Manufacturing
8.2. Product Costing
8.2.1. Use of Activity-Based Costing (ABC) Principles for Allocating Overhead
8.2.2. Inventory Valuation Debate: Absorption versus Direct Costing
8.3. Inventory Cost Flow Assumptions
8.3.1. Specific Identification
8.3.2. Standard Costing Method
8.3.3. Average Cost Flow Assumption
8.3.4. First-In, First-Out (FIFO) Assumption
8.3.5. Last-In, First-Out (LIFO) Assumption
8.4. Application of Cost Flow Assumption in Manufacturing Firms
8.5. Inventory Write-Offs and Its Impact on the Firm's Value
8.6. Summary
8.7. Suggested Reading
Exercises
9. Interpreting Financial Statements for Operations
9.1. More Intuitive Financial Statements
9.1.1. Visual Balance Sheet
9.1.2. Visual Income Statement
9.1.3. Visual Statement of Cash Flows
9.2. Financial Ratios
9.2.1. Why Financial Ratios?
9.2.2. Overall Performance Ratios (CEO)
9.2.3. Operational Performance Ratios (COO)
9.2.4. Financial Performance Ratios (CFO)
9.3. Breaking Down and Combining Ratios
9.3.1. ROE Breakdown
9.3.2. GMROI Breakdown
9.3.3. ROA Breakdown
9.3.4. Relationship between ROE and RONA
9.3.5. Further Breakdown of Ratios
9.4. Using Ratios to Obtain Information from Financial Statements
9.4.1. Groupe Casino
9.4.2. Who Is Who?
9.5. Final Words on the Use of Ratios
9.6. Summary
Exercises
10. Financial Forecasting
10.1. Pro Forma Financial Statements
10.1.1. Evaluating Bathline's Performance
10.1.2. Estimating Bathline's Financing Needs
10.2. Sustainable Growth
10.3. Financial Planning at Bathline Inc.
10.4. Summary
Exercises
11. Tools to Improve Operating Margin: Introduction to Cost Accounting
11.1. Simple Cost Taxonomies
11.1.1. Variable and Fixed Costs
11.1.2. Direct and Indirect Costs
11.2. Contribution Margin and Break-Even
11.3. Decisions at Capacity
11.3.1. Decisions at Capacity: An Enlightening Exercise
11.3.2. Maximizing Profit Using Linear Programming
11.3.3. Some Tips on Bottlenecks
11.4. Unleashing the Power of Contribution Margin
11.5. Improving Makepad's Decisions Using Activity-Based Costing
11.6. Summary
Exercises
12. Operations Investment Assessment: The Basics
12.1. Introduction
12.2. Net Present Value
12.2.1. Example: Calculating Net Present Value
12.3. Internal Rate of Return (IRR)
12.4. Selecting the Best Project
12.5. Other Methods to Value Investments
12.5.1. Payback Period
12.5.2. Economic Value Added (EVA)
12.6. Summary
Exercises
13. Operations Investment Assessment: Some Refinements
13.1. Introduction
13.2. Estimating the Discount Rate
13.2.1. The Weighted Average Cost of Capital (WACC)
13.2.2. The Marginal Cost of Debt
13.3. Is NPV Always a Valid Quantitative Measure?
13.4. NPV Distributions
13.5. Real Options
13.5.1. Option to Delay
13.5.2. Option to Abandon
13.5.3. Option to Expand
13.5.4. Flexible Capacity Option
13.6. NPV Is Not a Panacea: Deciding beyond the Numbers
13.7. Roche: The Investment Decision Dilemma
13.8. Summary
13.9. Suggested Reading
Exercises
14. Managing Operating Working Capital
14.1. Why Managing OWC Is Important
14.2. Reducing Inventory
14.2.1. Passing Inventory to Suppliers and Customers
14.2.2. Consignment
14.2.3. Vendor-Managed Inventory
14.3. Reducing Accounts Receivable
14.3.1. Sales Discount
14.3.2. Receivables Discounting and Factoring
14.4. Increasing Accounts Payable
14.4.1. Trade Credit
14.4.2. Reverse Factoring
14.5. Managing Cash
14.5.1. Improving the Cash Profile
14.5.2. Coming Up with the Minimum Cash Level
14.6. Is There an Optimal Level for OWC?
14.7. Summary
Exercises
15. Solving Operations and Supply Chain Trade-Offs
15.1. Offshoring versus Local Sourcing
15.2. Financial Considerations in Global Supply Chain Design
15.3. Broad versus Narrow Product Assortment
15.3.1. SKU Rationalization
15.4. Other Operational Risk Pooling Strategies
15.5. Push versus Pull
15.6. Chasing versus Leveling
15.6.1. Financial Planning at BeerCo
15.6.2. Switching from Chase to Level Production at BeerCo
15.6.3. Cash Budgeting
15.7. The Supply Chain Trade-Off Triangle
15.8. Summary
15.9. Suggested Reading
Exercises
Appendix A: The Triple-Seven Financial Statements
Appendix B: Probability Review
B.1. The Concept of Random Variable and Its Characterization
B.1.1. Random Variable
B.1.2. The Probability Mass Function (pmf ) and Probability Density Function (pdf )
B.1.3. The Cumulative Distribution Function (CDF)
B.2. The Normal Distribution
B.2.1. Characterization of the Normal Distribution
B.2.2. The Standard Normal Distribution and the z-score
B.3. Central Limit Theorem
B.3.1. An Insightful Experiment
B.3.2. The Central Limit Theorem (CLT)
B.4. Measures of Location and Variability for Continuous Random Variables
B.4.1. Expectation of a Continuous Random Variable
B.4.2. Covariance of Two Continuous Random Variables
B.4.3. Variance and Standard Deviation of a Continuous Random Variable
B.4.4. Coefficient of Variation of a Random Variable
B.5. The Concept of Conditional Probability: Two Useful Theorems
B.5.1. The Concept of Conditional Probability
B.5.2. Theorems of Total Expectation and Total Variance
Appendix C: Inventory Management Review
C.1. The Economic Order Quantity Formula
C.2. Newsvendor Model
C.3. Safety Inventory in Multi-Period Replenishment Settings
C.3.1. The Continuous (r, Q) Policy
C.3.2. The Periodic (R, S) Policy
C.4. Risk Pooling
Glossary
Index

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