Complete Business Math for AccountantsCode: 14A-BusMath

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Course Details

425 pages

 The Complete Business Math for Accountants provides accountants, managers, and business entrepreneurs with the information, analyses, and insights necessary to analyze and calculate the consequences of a wide range of business financial strategies and problems. The ability to select the right operational technique is vital if the business is to survive, profit, and grow in today's uncertain economic environment. The owner of a small business must be able to make the right financial decision based on sound mathematical reasoning in order to run the business efficiently. They must understand the problem, and then apply math skills to solve it.

This course contains hundreds of filled-in examples, illustrations, practical applications, measures, procedures, rules of thumb, statistical data, exhibits, tables, graphs, and diagrams. They are presented to aid in the comprehension and successful solution of a particular problem. The reader will also learn when and how to use the appropriate computational method, why it is used, when computer techniques such as spreadsheets should be used, and how to read and analyze the computer printout.

Presentation Method: Self-Study Category: Math CPE credit: 18 Hours Program Level: Intermediate Prerequisites: General understanding of math. Advance Preparation: None Exam expiration date: Participants must submit exams for grading within one year from the date of purchase. Objectives:

After completing this course, you will achieve the following chapter objectives::
Part 1
1. Differential between simple interest and effective interest.
2. Compute various ways to compute the cost of credit.
3. Calculate due dates.
4. Obtain financing from receivables and inventory.
5. Calculate the costs of various sources of financing.
6. Define and compute the cost of capital.

Part 2
1. Prepare a budget.
2. Diagram the basic structure of the budget.
3. Describe a shortcut approach to formulating the budget.
4. Forecast cash collections from customers.
5. Perform “what-if” analysis
6. State how an electronic spreadsheet can be used to develop a budget.
7. Calculate budget accuracy ratios.

Part 3
1. Use the percentage-of-sales approach to project financing needs.
2. Understand how costly prediction errors can be.
3. Explain how to decompose a time series data.
4. Calculate the seasonal index.
5. Discuss the pros and cons of exponential smoothing.
6. Develop a trend equation.
7. Distinguish between simple regression and multiple regression.
8. List regression statistics and explain the implication of each.
9. Measure accuracy of forecasts.
10. Perform the Chi-Square test.

Part 4
1. State the role of cash flow statement.
2. Manage cash and accounts receivable properly.
3. Determine the optimal cash balance.
4. Compute the opportunity cost of foregoing a cash discount.
5. Calculate cash and accounts receivable ratios.
6. Develop and defend the credit policy.

Part 5
1. List inventory management ratios.
2. Develop and optimize the economic order quantity.
3. Calculate EOQ with quantity discounts.
4. Avoid stock-outs.
5. Determining and utilize the most efficient reorder point.
6. Explain the concepts of the ABC inventory control method.

Part 6
1. List sales ratios.
2. Calculate cash discounts.
3. Illustrate different types of discounts.
4. Calculate markups and commissions
5. Explain contribution analysis.
6. Determine the break-even sales.
7. Understand the concept of contribution margin for short-term decision making.
8. Illustrate the relationships among costs, volume, and profit.
9. Explain operating leverage.
10. Calculate the elasticity of demand and how it affects total sales revenue.

Part 7
1. Explain how the risk-return tradeoff is important in decision making.
2. Understand the concept of time value.
3. Describe and calculate the present value.
4. Compute the future value and the present value of an annuity of $1.
5. Calculate the amount of an amortized loan and a sinking fund.
6. Distinguish between simple rate of return and internal rate of return.
7. Determine future values and how money grows.
8. List and explain applications of future values and present values.
9. Define capitalization rate.
10. Distinguish between gross income multiplier and net income multiplier.

Part 8
1. Define and compute the operating assets ratio.
2. Calculate various ratios for repairs and maintenance.
3. List several ways to calculate the efficiency of space use.
4. Cite some efficiency metrics.
5. Analyze operating costs.

Part 9
1. Prepare and explain the income statement and balance sheet.
2. List and discuss the components of the income statement.
3. Outline and explain the components of the balance sheet.
4. Calculate various ratios, proportions, and percentages.
5. Utilize charts and graphs for effective presentation.

Part 10
1. Calculate and explain changes in financial statements using horizontal analysis and vertical analysis.
2. Compute growth rate.
3. Explain how to develop index-number trend series.
4. Perform ratio analysis on financial statements using liquidity ratios, activity (turnover) ratios, long-term solvency (leverage, debt service) ratios, profitability ratios, and market value ratios.
5. Understand how to use a group of ratios to predict financial distress (or bankruptcy).
6. Explain the Z-score model.
7. Define quality of earnings.

Part 11
1. Choose among profitability goals.
2. Explain how residual income differs from return on total assets.
3. Define variance analysis.
4. Calculate price variances, quantity variances, mix and yield variances and explain what each of them really mean.
5. Compute sales and salesperson variances.
6. Define volume variance and understand how to compute it.
7. Define the terms marginal revenue and marginal cost and perform marginal analysis.

Part 12
1. Distinguish among average (mean), median, and mode.
2. Differentiate between arithmetic average and weighted average.
3. Discuss expected value and standard deviation and give some business applications of both.
4. Define normal distribution and illustrate how it is used in business.

Part 13
1. Determine how much insurance is needed.
2. Factor in coinsurance and copayment.
3. Evaluate insurance risk.
4. Estimate the value of a claim.

Part 14
1. Calculate permutations and combinations
2. Size up human resource needs
3. Calculate the cost of a fringe benefits program
4. Determine profit-sharing bonus
5. Define employee efficiency

Part 15
1. Understand how to determine the price of a business.
2. Determine the value of a franchise.

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American CPE, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be addressed to: National Registry of CPE Sponsors, 150 Fourth Ave. North, Suite 700, Nashville, TN 37219-2417. Web site:

NASBA Sponsor number 108096

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