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Book Introduction
An accounting book for the general public created by an 'accounting daily instructor' and 'accounting guru'! Includes the latest information for 2021! The Return of the #1 Accounting Book, the Unrivaled Bestseller A #1 accounting bestseller upon release! The world's easiest accounting book, "Start Learning Accounting Now," is back. In 2012, when there were few accessible introductory accounting books for the general public, this book became a hot topic as an accounting book for the general public rather than practitioners, and quickly became a bestseller in the accounting field. And nine years passed. In 2021, "Start Studying Accounting Now" returned with a completely revised edition, fully revamped to reflect the changing business environment, market shifts, new accounting evaluation systems, and the latest case studies. "Start Studying Accounting Now" by CPA Kang Dae-jun, a frequent guest lecturer at prestigious companies like Samsung, LG, SK, and Hyundai Motor Group, and Professor Shin Hong-chul, a leading accounting expert, has been fully revised for 2021! This book unravels the fundamentals of accounting with easy-to-understand explanations and case studies that resonate deeply with readers' daily lives, all in one volume! |
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index
Chapter 1: Accounting Intelligence: Essential Skills for the Business World
01 Do you have accounting intelligence?
Accounting intelligence that produces different results even when working the same way
[Voice from the Field] Why provide accounting training to non-financial professionals?
02 Accounting is about stories, not numbers.
- A good story is good information.
[Accounting Insight] Steve Jobs Made Accounting Apple-Style
03 Accounting is everywhere
- We live in a world of numbers.
Accounting prevents information monopolies.
[Accounting Insight] "1kg of native honey is equivalent to 5.6 million flowers."
04 Why Accounting is Called the "Language of Management"
- A company must perform three activities.
- The role of accounting in corporate management
[Voice from the Field] Accounting Intelligence Is Essential for Marketers
05 Accounting information also varies depending on the purpose.
Financial accounting tailored to everyone's taste
- 'Management Accounting' tailored to the tastes of insiders
Tax accounting tailored to the tastes of the National Tax Service
[Accounting Insight] The Shawshank Redemption and the Power of Accounting
[Challenge! Practical Accounting] What is my accounting intelligence?
Chapter 2: The Basics of the Basics! Understanding Costs and Expenses
01 What will be the basis for decision making?
- If we bring the focus inside the company
- Role and scope of management accounting
- What kind of information is needed for decision making?
[Accounting Insight] Survival Inequality and the Problem of Choice
02 Cost information that tells you how much you need
- Cost is a 'measurement of activity'
- Find the invisible cost
- A variety of cost types like a chameleon
- It becomes real information only when used for its intended purpose.
[Accounting Insight] Becoming Familiar with Numbers
03 How is cost calculated?
- Is it really true that a cup of coffee costs 123 won?
- Cost allocation that enables accurate cost calculation
- How are distribution criteria set?
- ABC that calculates costs based on activity
[Voice from the Field] Why Cost Accounting Systems Are Important for Businesses
- Let's distribute the cost directly.
[Accounting Insight] The Oldest Distribution Method: Lottery
04 Now let's find the break-even point.
- Will this business not suffer losses?
- Calculate variable and fixed costs.
- Let's find the break-even point based on cost and profit.
- How much can you leave?
Why Warren Buffett Doesn't Invest in the Aviation Industry
[Accounting Insight] The Importance of Running a Business Without Losses
[Challenge! Practical Accounting] What is the optimal running guarantee for a movie actor?
Chapter 3: Understanding the Big Picture of Management Through Financial Statements
01 What on earth are financial statements?
- Let's start with the information you're interested in.
- Financial statements are documents that contain the company's circumstances.
- Financial information is easier to obtain than you think.
[Voice from the Field] How should corporate PR managers use accounting?
02 Financial Statements Showing My Assets
- Assets consist of capital and liabilities.
- The financial statements contain the reality of the company.
[Accounting Insight] Encountering the Balance Sheet Equation in Bolivia
03 Income statement showing how much is left
- Profit is revenue minus expenses.
- Scandals in the balance sheet and income statement
- Tips for viewing both together
04 Cash flow statement showing actual living expenses
- Results vary depending on when you record.
Cash flow information is becoming increasingly important.
05 Notes providing rich financial information
- When information that cannot be expressed in numbers is needed
- Notes are an essential part of financial statements.
[Accounting Insight] Data vs. Information
06 How to record
- Easy but simple single-entry bookkeeping
- Double-entry bookkeeping
- Three misconceptions about swelling
07 Advanced Management Strategy Hidden Behind the Financial Statements
- The final act of financial accounting is the closing.
- Understand management's intentions hidden in financial statements.
[Accounting Insight] Does the way sales are recorded vary from company to company?
08 The accounting environment is changing.
- Accounting standards have changed with IFRS.
- Efforts to create a transparent accounting environment
[Accounting Insight] King Sejong the Great Creates an "Open Nation" Through Accounting
[Voice from the Field] The Reality of Fraudulent Accounting in Southeast Asian Countries
- Why is an accounting audit necessary?
[Accounting Insight] The History of Global Accounting Firms
[Accounting Insight] Avoiding Delistings by Reviewing Important Notes
[Challenge! Practical Accounting] Finding a company's true sales and profits
Chapter 4: A Closer Look at the Financial Statements
01 What to See in the Numbers
- Always remember the relationship between assets, liabilities, and capital.
- Two keywords to read the meaning of assets
- Debt is something that must be repaid
- Capital is my share
[Accounting Insight] How much are soccer players worth?
02 Current assets are a company's safety net.
- Is it good to have a lot of cash?
[Accounting Insight] What will be the accounting value of Bitcoin?
A company's survival depends on managing its accounts receivable.
[Voice from the Field] Corporate Accounts Receivable Management Know-How
- Inventory asset management is competitiveness.
[Accounting Insight] "Promissory Notes" is not an accounting term.
[Accounting Insight] Investing in Stocks Using Cash Equivalents
03 Non-current assets are the power of management
Tangible assets are management tools.
[Accounting Insight] Land may not be a tangible asset?
- Depreciation and revaluation of assets
- Invisible power, intangible assets
[Accounting Insight] Should I Buy Stock in a Company Revaluing Its Assets?
04 Debt is a lever that increases a company's power.
- Debt is an obligation that must be repaid someday.
Debt isn't necessarily a bad thing.
[Accounting Insight] Am I an Asset or a Liability to My House?
05 Capital is the seed money of a business.
- Paid-in capital and retained earnings
- How do you dispose of retained earnings?
- Why would someone spend money to buy their own company's stock?
[Challenge! Practical Accounting] Find the owner of the financial statements!
Chapter 5: Reading the Business Flow with the Income Statement and Cash Flow Statement
01 Understanding the Cryptographic Structure of an Income Statement
- There are many different types of profits.
- What will be the basis for recording?
- When will the cost be considered incurred?
[Accounting Insight] Distribution: Humanity's Greatest Heritage
02 'Profit' that tells you how much you earned
- Let's check the revenue recognition criteria.
[Accounting Insight] Operating Profit: Don't Use Tricks!
03 'Cost' that tells you how much you spent
Cost of goods sold, the counterpart to sales
- 'Selling and administrative expenses' essential for business activities
- 'Non-operating expenses (other expenses)' to identify abnormal signals
- 'Corporate tax expense' showing approximate taxes
[Accounting Insight] Why are corporate tax expenses and corporate tax payments different?
04 'Profit' that tells you how much you have left
- 'Gross profit', which is calculated by subtracting cost of sales from sales revenue
- 'Operating profit' that shows the performance of the main business
- The remaining amount at the end is 'Net Income'
[Accounting Insight] Investors, Don't Be Fooled by Earnings Surprises
05 Transformations and Hidden Information in the Income Statement
- Why a Comprehensive Income Statement?
- How is it different from a manufacturing cost statement?
[Accounting Insight] Why is POSCO's depreciation expense lower than that of department stores?
- Differences in income statements by industry
[Accounting Insight] Various Accounting Terms in the Global World
06 Extracting More Information from the Cash Flow Statement
- Why do black ink bankruptcies occur?
- Cash flow composed of three business activities
Why is cash flow from operating activities important?
Let's infer the company's situation through cash flow patterns.
[Challenge! Practical Accounting] Why did a successful company fail?
Chapter 6: Financial Statement Analysis to Diagnose a Company's Health
01 The hidden treasure of management information, 'Financial ratio'
- Financial ratios that show the relationship between numbers
- How to analyze financial ratios
- What will be the basis for linking?
[Accounting Insight] What Good Companies and Good Spouses Have in Common
02 'Stability Ratio' that indicates durability
- Current ratio: Is there really a solvency?
Current ratio: A more stringent solvency verification tool
Debt Ratio: What is the risk of insolvency?
- Interest coverage ratio: Is there a capacity to repay interest?
03 'Profitability Ratio' that shows how much is left
- Gross profit margin: What remains after deducting cost of sales
- Operating profit margin: An indicator that determines the profit of the main business.
- ROA and ROE: Similar but different concepts of return
- Dividend yield: How much is returned to shareholders?
[Accounting Insight] Don't Be Fooled by Higher ROEs Through Illegal Methods
04 'Growth ratio' showing growth rate
- Total Asset Growth Rate: Evaluate the growth rate of assets.
Sales Growth Rate: Let's analyze the performance of your business activities.
05 'Activity ratio' indicating diligence
- Total asset turnover ratio: Are assets being managed efficiently?
- Accounts receivable turnover ratio: Are accounts receivable not bad?
- Inventory turnover ratio: The longer inventory is held, the more losses there are.
[Accounting Insight] Can someone help me calculate complex financial ratios?
06 Finding Beautiful Companies Using Accounting Information 1
Step 1: Gather information using business reports and audit reports and create a company profile.
- Step 2: Check the external auditor's opinion and notes on the financial statements.
Step 3: Analysis of the company's short-term liquidity
Step 4: Analyzing operating activity through working capital turnover analysis.
Step 5: Understanding the efficiency of asset investment and asset composition
07 Finding Beautiful Companies Using Accounting Information 2
Step 6: Analysis of the company's long-term stability (financial structure)
Step 7: Analyze the company's growth potential and leverage (volatility).
Step 8: Analyze the company's profitability and return on investment.
Step 9: Analyze cash flow to identify anomalies and analyze earnings quality.
Step 10: Financial Risk Factor Analysis through Contingencies
[Challenge! Practical Accounting] Interview the founder of Costco!
Chapter 7: Using Accounting Information Like a CEO
01 Understand the relationship between management and accounting.
- It's not management accounting, it's 'business accounting'
- Don't separate financial accounting and management accounting.
- Even if the system is the same, the results can be different.
- Causal relationship between financial accounting and management accounting
[Accounting Insight] Why is popcorn so expensive?
02 Making decisions based on accounting information
- Information utilization in short-term decision-making
- Information utilization in long-term decision-making
03 The Foundation of Management Cycle: 'Difference Analysis'
- How does difference analysis serve as a warning?
- Standard cost accounting system that informs of advantages and disadvantages
Analysis and feedback drive continuous improvement.
[Accounting Insight] The Birth and History of Variance Analysis
04 Accounting Mindset for Strategic Decision-Making
05 Implementing Strategic Management with Balanced KPIs
- BSC complements retrospective performance management
- Use causal analysis.
[Accounting Insight] How was the BSC born?
06 Creating corporate value with members
- How to bridge the gap between CEO and members
- Unite members by number.
[Challenge! Practical Accounting] To create a company that survives by uniting
01 Do you have accounting intelligence?
Accounting intelligence that produces different results even when working the same way
[Voice from the Field] Why provide accounting training to non-financial professionals?
02 Accounting is about stories, not numbers.
- A good story is good information.
[Accounting Insight] Steve Jobs Made Accounting Apple-Style
03 Accounting is everywhere
- We live in a world of numbers.
Accounting prevents information monopolies.
[Accounting Insight] "1kg of native honey is equivalent to 5.6 million flowers."
04 Why Accounting is Called the "Language of Management"
- A company must perform three activities.
- The role of accounting in corporate management
[Voice from the Field] Accounting Intelligence Is Essential for Marketers
05 Accounting information also varies depending on the purpose.
Financial accounting tailored to everyone's taste
- 'Management Accounting' tailored to the tastes of insiders
Tax accounting tailored to the tastes of the National Tax Service
[Accounting Insight] The Shawshank Redemption and the Power of Accounting
[Challenge! Practical Accounting] What is my accounting intelligence?
Chapter 2: The Basics of the Basics! Understanding Costs and Expenses
01 What will be the basis for decision making?
- If we bring the focus inside the company
- Role and scope of management accounting
- What kind of information is needed for decision making?
[Accounting Insight] Survival Inequality and the Problem of Choice
02 Cost information that tells you how much you need
- Cost is a 'measurement of activity'
- Find the invisible cost
- A variety of cost types like a chameleon
- It becomes real information only when used for its intended purpose.
[Accounting Insight] Becoming Familiar with Numbers
03 How is cost calculated?
- Is it really true that a cup of coffee costs 123 won?
- Cost allocation that enables accurate cost calculation
- How are distribution criteria set?
- ABC that calculates costs based on activity
[Voice from the Field] Why Cost Accounting Systems Are Important for Businesses
- Let's distribute the cost directly.
[Accounting Insight] The Oldest Distribution Method: Lottery
04 Now let's find the break-even point.
- Will this business not suffer losses?
- Calculate variable and fixed costs.
- Let's find the break-even point based on cost and profit.
- How much can you leave?
Why Warren Buffett Doesn't Invest in the Aviation Industry
[Accounting Insight] The Importance of Running a Business Without Losses
[Challenge! Practical Accounting] What is the optimal running guarantee for a movie actor?
Chapter 3: Understanding the Big Picture of Management Through Financial Statements
01 What on earth are financial statements?
- Let's start with the information you're interested in.
- Financial statements are documents that contain the company's circumstances.
- Financial information is easier to obtain than you think.
[Voice from the Field] How should corporate PR managers use accounting?
02 Financial Statements Showing My Assets
- Assets consist of capital and liabilities.
- The financial statements contain the reality of the company.
[Accounting Insight] Encountering the Balance Sheet Equation in Bolivia
03 Income statement showing how much is left
- Profit is revenue minus expenses.
- Scandals in the balance sheet and income statement
- Tips for viewing both together
04 Cash flow statement showing actual living expenses
- Results vary depending on when you record.
Cash flow information is becoming increasingly important.
05 Notes providing rich financial information
- When information that cannot be expressed in numbers is needed
- Notes are an essential part of financial statements.
[Accounting Insight] Data vs. Information
06 How to record
- Easy but simple single-entry bookkeeping
- Double-entry bookkeeping
- Three misconceptions about swelling
07 Advanced Management Strategy Hidden Behind the Financial Statements
- The final act of financial accounting is the closing.
- Understand management's intentions hidden in financial statements.
[Accounting Insight] Does the way sales are recorded vary from company to company?
08 The accounting environment is changing.
- Accounting standards have changed with IFRS.
- Efforts to create a transparent accounting environment
[Accounting Insight] King Sejong the Great Creates an "Open Nation" Through Accounting
[Voice from the Field] The Reality of Fraudulent Accounting in Southeast Asian Countries
- Why is an accounting audit necessary?
[Accounting Insight] The History of Global Accounting Firms
[Accounting Insight] Avoiding Delistings by Reviewing Important Notes
[Challenge! Practical Accounting] Finding a company's true sales and profits
Chapter 4: A Closer Look at the Financial Statements
01 What to See in the Numbers
- Always remember the relationship between assets, liabilities, and capital.
- Two keywords to read the meaning of assets
- Debt is something that must be repaid
- Capital is my share
[Accounting Insight] How much are soccer players worth?
02 Current assets are a company's safety net.
- Is it good to have a lot of cash?
[Accounting Insight] What will be the accounting value of Bitcoin?
A company's survival depends on managing its accounts receivable.
[Voice from the Field] Corporate Accounts Receivable Management Know-How
- Inventory asset management is competitiveness.
[Accounting Insight] "Promissory Notes" is not an accounting term.
[Accounting Insight] Investing in Stocks Using Cash Equivalents
03 Non-current assets are the power of management
Tangible assets are management tools.
[Accounting Insight] Land may not be a tangible asset?
- Depreciation and revaluation of assets
- Invisible power, intangible assets
[Accounting Insight] Should I Buy Stock in a Company Revaluing Its Assets?
04 Debt is a lever that increases a company's power.
- Debt is an obligation that must be repaid someday.
Debt isn't necessarily a bad thing.
[Accounting Insight] Am I an Asset or a Liability to My House?
05 Capital is the seed money of a business.
- Paid-in capital and retained earnings
- How do you dispose of retained earnings?
- Why would someone spend money to buy their own company's stock?
[Challenge! Practical Accounting] Find the owner of the financial statements!
Chapter 5: Reading the Business Flow with the Income Statement and Cash Flow Statement
01 Understanding the Cryptographic Structure of an Income Statement
- There are many different types of profits.
- What will be the basis for recording?
- When will the cost be considered incurred?
[Accounting Insight] Distribution: Humanity's Greatest Heritage
02 'Profit' that tells you how much you earned
- Let's check the revenue recognition criteria.
[Accounting Insight] Operating Profit: Don't Use Tricks!
03 'Cost' that tells you how much you spent
Cost of goods sold, the counterpart to sales
- 'Selling and administrative expenses' essential for business activities
- 'Non-operating expenses (other expenses)' to identify abnormal signals
- 'Corporate tax expense' showing approximate taxes
[Accounting Insight] Why are corporate tax expenses and corporate tax payments different?
04 'Profit' that tells you how much you have left
- 'Gross profit', which is calculated by subtracting cost of sales from sales revenue
- 'Operating profit' that shows the performance of the main business
- The remaining amount at the end is 'Net Income'
[Accounting Insight] Investors, Don't Be Fooled by Earnings Surprises
05 Transformations and Hidden Information in the Income Statement
- Why a Comprehensive Income Statement?
- How is it different from a manufacturing cost statement?
[Accounting Insight] Why is POSCO's depreciation expense lower than that of department stores?
- Differences in income statements by industry
[Accounting Insight] Various Accounting Terms in the Global World
06 Extracting More Information from the Cash Flow Statement
- Why do black ink bankruptcies occur?
- Cash flow composed of three business activities
Why is cash flow from operating activities important?
Let's infer the company's situation through cash flow patterns.
[Challenge! Practical Accounting] Why did a successful company fail?
Chapter 6: Financial Statement Analysis to Diagnose a Company's Health
01 The hidden treasure of management information, 'Financial ratio'
- Financial ratios that show the relationship between numbers
- How to analyze financial ratios
- What will be the basis for linking?
[Accounting Insight] What Good Companies and Good Spouses Have in Common
02 'Stability Ratio' that indicates durability
- Current ratio: Is there really a solvency?
Current ratio: A more stringent solvency verification tool
Debt Ratio: What is the risk of insolvency?
- Interest coverage ratio: Is there a capacity to repay interest?
03 'Profitability Ratio' that shows how much is left
- Gross profit margin: What remains after deducting cost of sales
- Operating profit margin: An indicator that determines the profit of the main business.
- ROA and ROE: Similar but different concepts of return
- Dividend yield: How much is returned to shareholders?
[Accounting Insight] Don't Be Fooled by Higher ROEs Through Illegal Methods
04 'Growth ratio' showing growth rate
- Total Asset Growth Rate: Evaluate the growth rate of assets.
Sales Growth Rate: Let's analyze the performance of your business activities.
05 'Activity ratio' indicating diligence
- Total asset turnover ratio: Are assets being managed efficiently?
- Accounts receivable turnover ratio: Are accounts receivable not bad?
- Inventory turnover ratio: The longer inventory is held, the more losses there are.
[Accounting Insight] Can someone help me calculate complex financial ratios?
06 Finding Beautiful Companies Using Accounting Information 1
Step 1: Gather information using business reports and audit reports and create a company profile.
- Step 2: Check the external auditor's opinion and notes on the financial statements.
Step 3: Analysis of the company's short-term liquidity
Step 4: Analyzing operating activity through working capital turnover analysis.
Step 5: Understanding the efficiency of asset investment and asset composition
07 Finding Beautiful Companies Using Accounting Information 2
Step 6: Analysis of the company's long-term stability (financial structure)
Step 7: Analyze the company's growth potential and leverage (volatility).
Step 8: Analyze the company's profitability and return on investment.
Step 9: Analyze cash flow to identify anomalies and analyze earnings quality.
Step 10: Financial Risk Factor Analysis through Contingencies
[Challenge! Practical Accounting] Interview the founder of Costco!
Chapter 7: Using Accounting Information Like a CEO
01 Understand the relationship between management and accounting.
- It's not management accounting, it's 'business accounting'
- Don't separate financial accounting and management accounting.
- Even if the system is the same, the results can be different.
- Causal relationship between financial accounting and management accounting
[Accounting Insight] Why is popcorn so expensive?
02 Making decisions based on accounting information
- Information utilization in short-term decision-making
- Information utilization in long-term decision-making
03 The Foundation of Management Cycle: 'Difference Analysis'
- How does difference analysis serve as a warning?
- Standard cost accounting system that informs of advantages and disadvantages
Analysis and feedback drive continuous improvement.
[Accounting Insight] The Birth and History of Variance Analysis
04 Accounting Mindset for Strategic Decision-Making
05 Implementing Strategic Management with Balanced KPIs
- BSC complements retrospective performance management
- Use causal analysis.
[Accounting Insight] How was the BSC born?
06 Creating corporate value with members
- How to bridge the gap between CEO and members
- Unite members by number.
[Challenge! Practical Accounting] To create a company that survives by uniting
Detailed image
Into the book
When you hear the word 'accounting', you usually think of complex calculations and lots of numbers.
However, this is only a preconceived notion about the system that creates accounting information (such as double-entry bookkeeping that focuses on entering vouchers), and in reality, the essence of accounting is very simple.
It is a story and information about business.
--- p.34
A team leader and two team members went to a bar.
When I was trying to order draft beer, I realized that it would be cheaper to order a 3,000cc pitcher and share it rather than ordering several 500cc glasses each, so I ordered a pitcher.
Now, the cost of draft beer ordered as a feature can be considered an indirect (common) cost.
There may be several ways to distribute the cost (price of draft beer) at this time.
(...) The most basic distribution method is to divide equally into n parts.
It is a standard of fairness and equity.
(...) Another distribution method is for the senior team leader with a higher salary to pay for the draft beer.
It is distributed based on the burden capacity.
(...) Another way is that the person who said he wanted to drink beer and ordered first pays.
This is a benefit criterion, meaning that the person who benefits the most should pay the burden.
(...) But what if I ordered draft beer because I liked it, but then another team member who said, "I don't really care," ended up drinking more? Then, I could ask the person who drank the most to pay more.
This is a distribution method based on causal criteria.
--- p.87~88
Let's say you bought a house worth 300 million won, but you actually spent 200 million won and borrowed the remaining 100 million won from the bank.
In this case, the house worth 300 million won is clearly my asset.
However, I also need to consider the 100 million won debt that I borrowed to own the asset and will have to repay in the future, along with the 200 million won that is actually my share.
(...) Of course, the actual financial statements are more complex than this, with many items and numbers, and are often not even divided into left and right but rather in a single row.
However, if you just remember the formula 'Assets = Liabilities + Equity', it becomes much easier to understand.
--- p.126~127
I decided to date him because he seemed to have good financial standing, as he said he had a nice car and a house of his own.
The asset value of the house and car was approximately 1 billion won.
However, while preparing for marriage, I found out that out of my total assets of 1 billion won, 900 million won was a loan taken out to purchase a house, and although I also purchased a luxury car with a 36-month installment plan, I still had 50 million won left as debt.
That person has assets worth 1 billion won, but his liabilities, including loans and car payments, total 950 million won.
So, how much is your own share, or capital? It's only 50 million won.
To avoid being fooled by superficial numbers, we must focus on the relationships between the numbers.
--- p.201~202
When Heo Saeng went to Mr. Byeon and asked, “Do you recognize me?” Mr. Byeon was surprised and said,
“Your complexion hasn’t improved at all. Did you lose 10,000 nyang?”
Heo Saeng smiled and handed over 100,000 nyang.
When Mr. Byeon was surprised, stood up, bowed, and declined the offer, saying that he would only receive one-tenth of the amount as interest, Heo Saeng became angry and said:
“Do you see me as a merchant?”
(...) Is the 10,000 nyang that Heo Saeng procured from Mr. Byeon a debt or capital?
Looking at the content, we can see that Mr. Byun thought of it as a debt that 'receives 1/10th of the interest', while Mr. Heo thought of it as capital that 'returns the profits to shareholders'.
From a modern perspective, when Mr. Byun invested in Heo Saeng, he did not invest based on collateral or credit, but only on Heo Saeng as a person and the project he would be carrying out in the future, so it can be said that this was a form of project financing, also known as PF.
--- p.250
The Merchant of Venice is an entertaining work with a good balance of tragic and comic elements, but from an accounting perspective, it presents a different perspective.
(...) Antonio, a man of loyalty, not only invested all his wealth in maritime trade, which can be considered a high-risk venture, but also raised most of the funds through borrowing.
Because the debt ratio was that high, it was impossible to repay the interest, let alone the principal, borrowed from the beginning.
I'm guessing Antonio's venture definitely had an interest coverage ratio of less than 100%.
The interest coverage ratio (or interest coverage ratio) is a ratio that shows how much operating profit is compared to interest expenses, and shows whether the company is earning enough operating profit to cover interest expenses.
(...) The higher this ratio, the better the interest payment ability.
On the other hand, if the interest coverage ratio is below 100%, it can be seen as a serious situation where it is difficult to cover even the interest, let alone the principal.
--- p.329~330
The king's father runs an Italian restaurant called 'Godfather'.
This restaurant only sells one menu item, a pasta lunch box, which costs 7,000 won, and the maximum number of lunch boxes the restaurant can cook and sell in a day is 700.
(...) Then suddenly, an order for 100 lunch boxes came in from a certain group.
The person in charge there asked that the price be reduced from the regular price of 7,000 won to 4,000 won because it was a bulk order.
(...) The angry King Daebu tried to refuse the order right away.
This is because the 4,000 won per box that they demanded was less than the cost of one lunch box, which was 5,000 won.
Then, Tom, the foreign chef and second-in-command of the restaurant, whispered in the ear of the owner.
“Sir, please accept this order.
“It’s a business where each piece makes 2,000 won.”
Is Tom's words true?
However, this is only a preconceived notion about the system that creates accounting information (such as double-entry bookkeeping that focuses on entering vouchers), and in reality, the essence of accounting is very simple.
It is a story and information about business.
--- p.34
A team leader and two team members went to a bar.
When I was trying to order draft beer, I realized that it would be cheaper to order a 3,000cc pitcher and share it rather than ordering several 500cc glasses each, so I ordered a pitcher.
Now, the cost of draft beer ordered as a feature can be considered an indirect (common) cost.
There may be several ways to distribute the cost (price of draft beer) at this time.
(...) The most basic distribution method is to divide equally into n parts.
It is a standard of fairness and equity.
(...) Another distribution method is for the senior team leader with a higher salary to pay for the draft beer.
It is distributed based on the burden capacity.
(...) Another way is that the person who said he wanted to drink beer and ordered first pays.
This is a benefit criterion, meaning that the person who benefits the most should pay the burden.
(...) But what if I ordered draft beer because I liked it, but then another team member who said, "I don't really care," ended up drinking more? Then, I could ask the person who drank the most to pay more.
This is a distribution method based on causal criteria.
--- p.87~88
Let's say you bought a house worth 300 million won, but you actually spent 200 million won and borrowed the remaining 100 million won from the bank.
In this case, the house worth 300 million won is clearly my asset.
However, I also need to consider the 100 million won debt that I borrowed to own the asset and will have to repay in the future, along with the 200 million won that is actually my share.
(...) Of course, the actual financial statements are more complex than this, with many items and numbers, and are often not even divided into left and right but rather in a single row.
However, if you just remember the formula 'Assets = Liabilities + Equity', it becomes much easier to understand.
--- p.126~127
I decided to date him because he seemed to have good financial standing, as he said he had a nice car and a house of his own.
The asset value of the house and car was approximately 1 billion won.
However, while preparing for marriage, I found out that out of my total assets of 1 billion won, 900 million won was a loan taken out to purchase a house, and although I also purchased a luxury car with a 36-month installment plan, I still had 50 million won left as debt.
That person has assets worth 1 billion won, but his liabilities, including loans and car payments, total 950 million won.
So, how much is your own share, or capital? It's only 50 million won.
To avoid being fooled by superficial numbers, we must focus on the relationships between the numbers.
--- p.201~202
When Heo Saeng went to Mr. Byeon and asked, “Do you recognize me?” Mr. Byeon was surprised and said,
“Your complexion hasn’t improved at all. Did you lose 10,000 nyang?”
Heo Saeng smiled and handed over 100,000 nyang.
When Mr. Byeon was surprised, stood up, bowed, and declined the offer, saying that he would only receive one-tenth of the amount as interest, Heo Saeng became angry and said:
“Do you see me as a merchant?”
(...) Is the 10,000 nyang that Heo Saeng procured from Mr. Byeon a debt or capital?
Looking at the content, we can see that Mr. Byun thought of it as a debt that 'receives 1/10th of the interest', while Mr. Heo thought of it as capital that 'returns the profits to shareholders'.
From a modern perspective, when Mr. Byun invested in Heo Saeng, he did not invest based on collateral or credit, but only on Heo Saeng as a person and the project he would be carrying out in the future, so it can be said that this was a form of project financing, also known as PF.
--- p.250
The Merchant of Venice is an entertaining work with a good balance of tragic and comic elements, but from an accounting perspective, it presents a different perspective.
(...) Antonio, a man of loyalty, not only invested all his wealth in maritime trade, which can be considered a high-risk venture, but also raised most of the funds through borrowing.
Because the debt ratio was that high, it was impossible to repay the interest, let alone the principal, borrowed from the beginning.
I'm guessing Antonio's venture definitely had an interest coverage ratio of less than 100%.
The interest coverage ratio (or interest coverage ratio) is a ratio that shows how much operating profit is compared to interest expenses, and shows whether the company is earning enough operating profit to cover interest expenses.
(...) The higher this ratio, the better the interest payment ability.
On the other hand, if the interest coverage ratio is below 100%, it can be seen as a serious situation where it is difficult to cover even the interest, let alone the principal.
--- p.329~330
The king's father runs an Italian restaurant called 'Godfather'.
This restaurant only sells one menu item, a pasta lunch box, which costs 7,000 won, and the maximum number of lunch boxes the restaurant can cook and sell in a day is 700.
(...) Then suddenly, an order for 100 lunch boxes came in from a certain group.
The person in charge there asked that the price be reduced from the regular price of 7,000 won to 4,000 won because it was a bulk order.
(...) The angry King Daebu tried to refuse the order right away.
This is because the 4,000 won per box that they demanded was less than the cost of one lunch box, which was 5,000 won.
Then, Tom, the foreign chef and second-in-command of the restaurant, whispered in the ear of the owner.
“Sir, please accept this order.
“It’s a business where each piece makes 2,000 won.”
Is Tom's words true?
--- p.384~385
Publisher's Review
Samsung, LG, SK, Hyundai Motor Group, etc.
The 'Accounting Textbook' chosen by 700 companies!
Can a book replace an MBA class?
It is possible to "start studying accounting right now."
Accounting is explained step by step in easy language so that even those who know nothing about accounting can read it.
It provides practical knowledge that can be applied in real-life management situations through vivid examples from domestic and foreign companies that can be immediately referenced, and it is also fun with curious cases such as how to calculate a movie actor's running guarantee, the issue of the value of overseas soccer players, and who pays for the sweet and sour pork that was ordered together.
The fact that this book has been chosen as an "accounting textbook" by many companies means that you no longer need to take additional classes or read additional books to learn basic accounting.
If you've decided to study accounting, this book is all you need!
Whatever you do
Accounting intelligence is absolutely necessary!
Making business decisions without accounting is like heading into a corner.
Investing without analyzing a company's financial statements is like throwing your money away.
As you may know, accounting is involved in everything related to money, including management, investing, starting a business, and promotions.
The importance of accounting cannot be overemphasized.
There is no weapon more essential to survival in the business world than 'accounting intelligence.'
If you want to sharpen your work skills through accounting, develop sharp management strategies, or increase your investment success rate, you must read this book and awaken the "accounting intelligence" hidden within you.
Includes information on how to use public information!
From work to investment
An accounting book that contains everything about accounting!
"Start Studying Accounting Right Now" explains everything from very basic accounting concepts and terminology to financial accounting and management accounting in an easy-to-understand manner.
Furthermore, this revised edition includes a new 10-step corporate analysis using publicly disclosed information.
This is to overcome the difficulties that arise when analyzing a company by looking at financial statements even after studying accounting.
When analyzing a company, it is easy to miss crucial information if you do not know the order or look at it without any criteria.
Therefore, this book provides step-by-step instructions on which materials to select and what to carefully examine, and helps you understand and make decisions with summarized and organized 'Checkpoints.'
Now, with this helpful book, let's learn about financial statement ratios, decipher their hidden meanings, and find beautiful companies worth investing in.
The 'Accounting Textbook' chosen by 700 companies!
Can a book replace an MBA class?
It is possible to "start studying accounting right now."
Accounting is explained step by step in easy language so that even those who know nothing about accounting can read it.
It provides practical knowledge that can be applied in real-life management situations through vivid examples from domestic and foreign companies that can be immediately referenced, and it is also fun with curious cases such as how to calculate a movie actor's running guarantee, the issue of the value of overseas soccer players, and who pays for the sweet and sour pork that was ordered together.
The fact that this book has been chosen as an "accounting textbook" by many companies means that you no longer need to take additional classes or read additional books to learn basic accounting.
If you've decided to study accounting, this book is all you need!
Whatever you do
Accounting intelligence is absolutely necessary!
Making business decisions without accounting is like heading into a corner.
Investing without analyzing a company's financial statements is like throwing your money away.
As you may know, accounting is involved in everything related to money, including management, investing, starting a business, and promotions.
The importance of accounting cannot be overemphasized.
There is no weapon more essential to survival in the business world than 'accounting intelligence.'
If you want to sharpen your work skills through accounting, develop sharp management strategies, or increase your investment success rate, you must read this book and awaken the "accounting intelligence" hidden within you.
Includes information on how to use public information!
From work to investment
An accounting book that contains everything about accounting!
"Start Studying Accounting Right Now" explains everything from very basic accounting concepts and terminology to financial accounting and management accounting in an easy-to-understand manner.
Furthermore, this revised edition includes a new 10-step corporate analysis using publicly disclosed information.
This is to overcome the difficulties that arise when analyzing a company by looking at financial statements even after studying accounting.
When analyzing a company, it is easy to miss crucial information if you do not know the order or look at it without any criteria.
Therefore, this book provides step-by-step instructions on which materials to select and what to carefully examine, and helps you understand and make decisions with summarized and organized 'Checkpoints.'
Now, with this helpful book, let's learn about financial statement ratios, decipher their hidden meanings, and find beautiful companies worth investing in.
GOODS SPECIFICS
- Date of issue: June 1, 2021
- Page count, weight, size: 424 pages | 766g | 170*245*18mm
- ISBN13: 9791157845101
- ISBN10: 115784510X
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