Financial Statements – Income Statement and Balance Sheet
Introduction
Income Statement
Balance Sheet
Working Capital and Current Ratio
Under Billing and Over Billing
Worked Examples
Financial Statement Analysis of a Construction Company
Analysis of Financial Statements by Financial Ratios
Five Categories of Financial Ratios
A Case Study
Compound Interest, Net Present Value (NPV), Equivalent Annual Cost and Loan Redemption
Nominal Interest Rate and Real Interest Rate
Compound Interest Calculations
Benefit-Cost Ratio
Salvage Value and Equivalent Annual Cost
Redeeming a Loan
Principal Amortization and Interest Payment of a Loan
Internal Rate of Return (IRR) and the Differences between IRR and NPV
Net Cash Flow (NCF)
DCF Method and IRR
IRR versus NPV
IRR as Financial Indicator and NPV as Economic Indicator
Effect of Inflation
Introduction
Real IRR and Its Calculation in a World with Inflation
When Is Inflation Adjustment Considered Or Not Considered?
Concluding Remarks
Cost-Volume-Profit Analysis
Introduction
Variable Costs, Fixed Costs and Break-even Point
Graphical Presentation – Break-even Chart
Mathematical Presentation
Contribution
The Make-or-Buy Decision
Equipment Selection Decision
Engineering Scheme Choice Decision
Concluding Remarks
Financial Analysis of a Project
Introduction
Basic Method of Financial Analysis
A Case Study on Financial Analysis
S-Curve and Working Capital Financing of a Construction Project
Introduction
S-Curve
Cumulative Interim Payment Graph
The Two Graphs combined
A Worked Example
Appendix
Endnotes
