Financial Accounting

1. Use of Financial Accounting Information
   1. Decision making by managers
      1. Budgeting and Forecasting
         1. Preparation of financial forecasts
         2. Variance analysis
         3. Performance evaluation
         4. Strategic planning alignment
      2. Cost Control and Management
         1. Identifying cost drivers
         2. Implementing cost reduction strategies
         3. Analyzing cost behavior
      3. Operational decision making
         1. Break-even analysis
         2. Make-or-buy decisions
         3. Product pricing strategies
      4. Long-term Strategic Planning
         1. Capital budgeting
            1. Net present value (NPV)
            2. Internal rate of return (IRR)
         2. Scenario analysis and planning
   2. Investment analysis by investors
      1. Evaluation of Financial Health
         1. Assessing financial ratios
            1. Return on equity (ROE)
            2. Earnings per share (EPS)
         2. Understanding financial stability
            1. Debt-to-equity ratio
            2. Interest coverage ratio
      2. Valuation Methods
         1. Discounted cash flow (DCF) analysis
         2. Valuation multiples
            1. Price-to-earnings (P/E) ratio
            2. Price-to-book (P/B) ratio
      3. Risk Assessment
         1. Assessing the risk profile of the company
         2. Market risk vs company-specific risk
      4. Analysis of Historical Performance
         1. Trend analysis for revenue and profit growth
         2. Comparison against industry benchmarks
   3. Credit assessment by lenders
      1. Creditworthiness Evaluation
         1. Analysis of financial statements for credit scoring
         2. Use of cash flow statements to understand liquidity
      2. Monitoring Financial Covenants
         1. Compliance with loan covenants
         2. Monitoring debt levels and repayment capacity
      3. Evaluating Collateral and Security
         1. Asset analysis for secured lending
         2. Verification of current and non-current asset values
      4. Potential Default Analysis
         1. Stress testing financial scenarios
         2. Assessing likelihood of default
   4. Regulatory compliance by authorities
      1. Financial Reporting Standards
         1. Ensuring adherence to accounting standards
         2. Reviewing disclosures in financial statements
      2. Tax Compliance
         1. Calculating tax liabilities based on financial information
         2. Ensuring correct declaration of tax information
      3. Anti-Fraud Measures
         1. Implementing measures for fraud detection
         2. Audit trails and checks
      4. Environmental and Social Reporting
         1. Compliance with regulatory requirements
         2. Evaluating environmental impact disclosures