Investment Accountants

Financial statements have a vital role to play in the overall business valuation process. Two kinds of information at least are contained in the financial statement that every financial analyst must always strive to identify/ recognise and put them to maximum use. I would like to make a point clear here: valuation model is not the same as asset pricing model (e.g. CAMP). While asset pricing model is used to determine  the cost of capital/ required return, valuation model is a process of using that cost of capital or other variables to determine the value of an asset- they are complementary. Examples

Business valuation techniques and methods of valuing a business has in recent time receive lots of attention both from the field of academic and from practitioner with many empirical tests and evidences provided. Most of these empirical evidence conflicts on what the most popular and acceptable method of valuation is. My intention in this article is not to support or disprove any of the valuation models that have been developed in the past but to clear the obvious confusion that many naive people have about business valuation. Not many people have taken time to educate the general public on the

Customer care services is one skill that today’s accountant cannot do without as business operations continues to integrate. Gone are the days when only customers’ care advisors are seen as the only professionals that can make impact on the life of the customers. The dancing tone has changed and therefore calls for an immediate change in the dancing steps. Customers care is all about showing empathy and being assertive in difficult and complex situations. Your customers already have a problem (reasonable or unreasonable) before seeking help from you. It is a crime for an accountant to think he

Church frauds as weird and unpleasant as it may sound has become part of the system in most church across the world today.  People now actively seek opportunities and loopholes in churches to steal money and commit other economic crimes. Some eyebrows were raised when I first wrote on the importance of accounting in churches; many saw me as an unholy person who sees everything from the perspective of a fraud fighter. Evidences now shows that the importance of accounting and good internal control makes a church and other places of worship a better and holier places as people will not be unnecessarily

Green investments also known as social responsibility investment and quality corporate governance over the time has shown to be a bedrock upon which business success is hinged – corporate bodies build their success by hybrid investment strategy that is a product of social responsibility screening of investment and good corporate governance. Investors that is mindful of their environment screen shares using both financial and social responsibility measures (non financial measures). The implication of this is that the days when companies simply concentrate on financial criterion (which can be achieved

Fundamental analysis is all about intelligent and informed forecast in an attempt to establish an intrinsic value that corrects for that vital information that is missing from the financial statement. Business valuation and financial analysis are incomplete without proper and logically sound fundamental analysis.  Traditional methods of valuation like; method of comparables, screening analysis, and assets based model of business valuation all have one thing in common; they do not involve forecasting. Share prices are based on the future payoffs that the company is expected to deliver, so one cannot

Suboptimal practices in companies are a situation whereby responsible managers fail to do the right thing just to take advantage of existing controls and procedures. Management and decision makers have to continually struggle with highly unpredictable human factors in the quest to provide lasting solution to incongruence actions that various mangers are vulnerable to take. Knowledge of strategic management tells us that we need to manage company’s resources- including managers of all levels to work in a manner that will ultimately lead to the achievement of overall objective of the company. This

Foreign investment decision is a tough and often complex investment decision that sharply differs from the traditional domestic decision on investing. The normal financial evaluation of discounted cash flows technique are not fully relied on in making foreign investment decision as we do in making domestic investment decision. Best practices as to whether a foreign investment is good for a company or not is to critically consider the identifiable imperfections in the international scene that a business must battle and overcome. This is to say that direct foreign investment makes more economic sense

Transfer pricing is one single area of managerial accounting that has been generating heat and still generates more heat. The existence of interdependencies in divisional-ised companies creates a problem of determining at what price goods needs to be transferred within a business. Transfer pricing exist because of the existence of interdependent activities within a company. Three kinds of interdependencies exist in a modern business, they are: TYPES OF INTERDEPENDENCIES WITHIN A COMPANY 1.      Pooled interdependencies 2.      Reciprocal interdependencies 3.      Sequential interdependencies

Business analysis is a methodological process of evaluating a company’s economic prospects and risk in the light of the entity’s strengths and weaknesses. This exercise is done in order to come to a consensus business valuation terms i.e. making willing parties agree on an intrinsic value of a company. Business analysis serve as the foundation upon which decisions like; investing in equity or loan, extending credit facility or not, deciding the value of a business for initial public offer (IPO), restructurings, and divestures are built. This is to say that business analysis aids management make

A lot of people now use the phrase asset register without truly understanding what it is all about. So many things have been mistaken to be an asset register. In this article, an attempt will be made to explain what an asset register is in a simple manner. It is however important to give a brief meaning of an asset. An asset is any resource that is controlled by us, as a result of what we have done in the past, which economic benefit is expected to flow to us. Note the word “control”, we must not own an item before it becomes an asset. It then follows that both tangible and intangible assets needs

INTRODUCTION Middle level managers are the tactical managers acting as a link between the strategic and functional managers. Their roles in business processes and decision making cannot be overlooked; hence they need to be adequately motivated. One of the theories that attempt to come up with better system of motivating middle-level managers is the Expectancy Valence theory. WHAT IS EXPECTANCY VALENCE THEORY? It can be argued that we all have at one point in time or the other acted in line with the basic theme of E-I-V as we constantly act (rationally or irrationally) in anticipation of reward

The use of contribution analysis cannot be fully understood if the meaning of the term is not first explained. Hence, I would like to start with the definition of contribution analysis, and how it is calculated. Contribution analysis is defined as: the payment made by individual products towards recovering the fixed cost of a business, this payment quickly become profits once the fixed cost of a business has been fully met. It is calculated thus: unit selling price of a particular product less variable cost of producing that product. The concept of contribution analysis is centered on variable

Variance analysis is a technical jargon used to explain a situation where actual result or outcome of an event significantly and materially differs from planned, expected or targeted results or outcomes. Note the emphasis on the words significant and materiality. In accounting, materiality is defined as a situation where the omission or inclusion of an item will influence the action of a decision makers or anybody that relies on the information so provided. Significant can be said be the same thing as materiality in this context. The process of variance analysis is simple. It is just an act of

Financial planners are one of those professionals that we cannot do without if we realy want to better our finances. We all make decisions on a daily basis, we decide on what to eat, wear, drink, read, phone calls to make, places to visit, etc. we even plan for our finances (consciously or unconsciously). Failing to plan for our finances is already a plan. In this article, you will discover 7 secrets on how to select a finacial planner The importance of getting a financial planner cannot be over-emphasized. So is making the right choice of financial planner. Choosing the wrong financial planner