The Vest-Pocket MBA, Third Edition - Softcover

Shim, Jae K.; Siegel, Joel G.; Simon, Abraham J.

Softcover

ISBN 10: 1591840511 ISBN 13: 9781591840510

Publisher: Portfolio, 2004

Synopsis

This bestselling soup-to-nuts book teaches the techniques and methods used in the country’s finest MBA programs. And now it’s fully revised with the latest information for today’s busy businesspeople.  Presented in an accessible question-and-answer format, The Vest-Pocket MBA helps readers quickly pinpoint all the formulas, ratios, and rules of thumb they need to analyze and evaluate nearly any problem. Among the many topics it covers: accounting, finance, break-even analysis, investment evaluation, capital budgeting, business law, risk minimization, marketing, and international trade.

The Vest-Pocket MBA offers a wealth of guidelines, illustrations, and how-to’s for the modern decision-maker, from the B-school student to the senior executive.

About this title

About the Author:

Jae K. Shim, Ph.D., is professor of business at California State University, Long Beach, and CEO of Delta Consulting Company, a management consulting and training firm. He has been a consultant to commercial and nonprofit organizations over 30 years, and has over 50 college and professional books to his credit, including The Vest-Pocket CPA and The Vest-Pocket CFO.

Joel G. Siegel, Ph.D, CPA, is a professor of accounting and finance at Queens College of the City University of New York, and is a financial consultant. He is the author of 65 published books and over 300 articles.

Abraham J. Simon, Ph.D, CPA, is a professor of accounting and information systems at Queens College of the City University of New York.

Excerpt. © Reprinted by permission. All rights reserved.:

Table of Contents

 

THE VEST-POCKET MBA

Acknowledgements

Title Page

Copyright Page

Preface

 

PART ONE - Business Strategy, Management, Marketing, and Legal Strategies

CHAPTER 1 - Strategic Management and Operations Management (OM)

CHAPTER 2 - Management

CHAPTER 3 - Marketing

CHAPTER 4 - Business Law

 

PART TWO - Accounting Tools and Guidelines

CHAPTER 5 - Financial Statements, the Sarbanes-Oxley Act, and Corporate Governance

CHAPTER 6 - How to Evaluate and Improve a Company’s Financial Performance

CHAPTER 7 - Internal Accounting Applications for Your Company

 

PART THREE - Financial Analysis, Metrics, Asset Management, and Financing

CHAPTER 8 - Cost-Volume-Profit Analysis, Operating Leverage, and Time Value of Money

CHAPTER 9 - Capital Budgeting

CHAPTER 10 - Assets Management, Financing Techniques, and Portfolio Theory

 

PART FOUR - Quantitative Methods and Information Technology

CHAPTER 11 - Decision Making with Statistics and Forecasting

CHAPTER 12 - Making Use of Quantitative Decision Making

CHAPTER 13 - Information Technology (IT) and Computer Applications to Business

 

PART FIVE - Economics and Multinational Issues

CHAPTER 14 - Economics

CHAPTER 15 - International Business and Finance

 

Glossary

Index

PORTFOLIO / PENGUIN

THE VEST-POCKET MBA

JAE K. SHIM, Ph.D., is a professor of business at California State University, Long Beach, and CEO of Delta Consulting Company, a management consulting and training firm. He received his M.B.A. and Ph.D. degrees from the University of California at Berkeley (Haas School of Business). Dr. Shim has been a consultant to commercial and nonprofit organizations for more than thirty years.

Dr. Shim, a management consultant, has published numerous articles in such journals as Financial Management , Econometrica, Decision Sciences, Journal of Business Forecasting, Business Economics, Management Science, Management Accounting, The CPA Journal, Long Range Planning, OMEGA, and Journal of Operational Research Society. He has more than fifty college and professional books to his credit, including Operations Management, Strategic Management, Project Management, Managerial Economics, Financial Management , Managerial Accounting, U.S. Master Finance Guide, Barron’s Accounting Handbook, 2011–2012 Corporate Controller’s Handbook of Financial Management , The Vest-Pocket CPA, and The Vest-Pocket CFO. Thirty of his publications have been translated into foreign languages such as Chinese, Spanish, Russian, Polish, Croatian, Italian, Japanese, and Korean. His books have been published by Penguin, McGraw-Hill, Barron’s, CCH, John Wiley, Thomson-Reuters, Amacom, and the American Institute of CPAs (AICPA). Dr. Shim has been frequently quoted by such media as the Los Angeles Times, Orange County Register, Business Start-ups, Personal Finance, and Money Radio. Dr. Shim is the recipient of the 1982 Credit Research Foundation award for his article on financial modeling.

 

JOEL G. SIEGEL, Ph.D., CPA, is a professor of accounting and finance at Queens College of the City University of New York and a financial consultant to management. He is the author of fifty published books and more than two hundred articles. Dr. Siegel’s articles have appeared in professional journals, including The Financial Executive, The Financial Analysts Journal , The CPA Journal, The National Public Accountant, Credit and Financial Management, and the International Journal of Management. He has served as consultant and/or adviser to numerous organizations, including the AICPA, Citicorp, and ITT. He was affiliated with Coopers and Lybrand, CPAs, and Arthur Andersen, CPAs. In 1972 Dr. Siegel was the recipient of the Outstanding Educator of America award. He is listed in Who’s Where Among Writers and in Who’s Who in the World.

 

ALLISON I. SHIM, M.S., is CFO of Delta Consulting/ Investments Company. She is a finance expert and is a Ph.D. candidate at the University of California at Irvine.

Acknowledgments

The authors would like to acknowledge the contributions of Steve W. Hartman, Ph.D., to this edition of The Vest-Pocket MBA. Steve W. Hartman is a management consultant and adviser to companies and a professor of management at the Graduate School of Business at New York Institute of Technology. He has authored several books and has written numerous articles in professional business journals.

PORTFOLIO / PENGUIN

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This fourth edition published 2011

 

 

Copyright © Penguin Group (USA) Inc., 1986, 1997, 2004, 2011 All rights reserved

 

PUBLISHER’S NOTE

 

LIBRARY OF CONGRESS CATALOGING IN PUBLICATION DATA

Shim, Jae K.

The vest-pocket MBA / Jae K. Shim, Joel G. Siegel, Allison T. Shim.—4th ed.

p. cm.

Includes index.

ISBN: 9781101575574

1. Managerial accounting. 2. Business enterprises—Finance. I. Siegel, Joel G. II. Shim, Allison I., 1984–III. Title.

HF5657.4.S452 2012

658.15’11—dc23 2011040455

 

 

 

The scanning, uploading, and distribution of this book via the Internet or via any other means without the permission of the publisher is illegal and punishable by law. Please purchase only authorized electronic editions, and do not participate in or encourage electronic piracy of copyrighted materials. Your support of the author’s rights is appreciated.

Preface

Here is a handy pocket problem solver for today’s busy executive. It is a working guide to help you quickly pinpoint in the complex world of business:

· What to look for

· What to do

· What to watch out for

· How to do it

You will find ratios, formulas, guidelines, and rules of thumb to help you analyze and evaluate any business-related problem. Throughout, you will find this book practical, quick, and useful.

Uses for this book are as varied as the topics presented.

Part I (Chapters 1, 2, 3, and 4) takes you through the world of business strategy, management, marketing, and legal environments of business. You will learn strategic analysis, various management techniques, production /operations management, the marketing process of planning and distribution, and how to price and promote products. These management and marketing techniques and processes have been presented in an extremely understandable and practical format to make them as useful as possible. The statutory and case laws affecting business operations and decisions are also presented. Legal requirements must be known to protect the business entity.

Part II (Chapters 5, 6, and 7) takes you through accounting principles and guidelines for evaluating a company’s financial health. You will have an increased understanding of various financial statements and their implications. You will be exposed to Corporate Responsibility Law, better known as the Sarbanes-Oxley (SOX) Act. You will learn techniques for analyzing another company’s financial position should you wish to invest, extend credit, or compare. You will also learn how to improve a company’s corporate profitability and shareholder value. We present internal managerial accounting applications to help you evaluate your own company’s performance, profitability, marketing effectiveness, and budgeting process. You will learn how to highlight problem areas with variance analysis. You will also learn some valuable new tools, such as activity-based costing (ABC), life-cycle costing, target costing, and corporate balanced scorecard.

Part III (Chapters 8, 9, and 10) takes a look at financial analysis tools, financial metrics, and financing methods for decision making. Through break-even and sensitivity analysis, you will be able to move your company toward greater profits. For investment purposes, this part presents guidelines for evaluating proposals, whether they be short or long term, for profit potential and risk-return comparisons. You will learn management and financing techniques to ensure the best possible strategies for maximizing and acquiring cash. Also covered are basic financial tenets of portfolio theory, the capital asset pricing model (CAPM), and the arbitrage pricing model (APM).

Part IV (Chapters 11, 12, and 13) takes you through the seemingly complex world of quantitative analysis and information technology (IT). You will use statistics for forecasting and validity testing. Decision tools and techniques include linear programming, learning curve theory, project management, and queuing models; these are presented concisely and comprehensively to help you use such sophisticated techniques with relative ease. In addition, you will learn how computer applications facilitate the many complex procedures. Computer applications are heavily stressed throughout the chapters. Chapter 13 takes up the issue as to how IT assists managers in business decisions. It covers the use of information systems in all phases of business and in all functional areas to analyze and solve business problems in the “real world.”

Part V (Chapters 14 and 15) covers the economic issues of interest to business managers, because they have a significant impact upon corporate success or failure. Attention should be given to the changing economic environment as well as economic indices and statistics in making financial and investment decisions. Many companies are multinational, so business managers must understand the opportunities and difficulties associated with international business and multinational finance. Some relevant issues of concern to businesspeople are foreign exchange rates, currency risk management, political risk, and international sources of financing.

This book has been designed in question-and-answer format in order to address the pertinent issues that come up during the course of business. The questions are typical of those asked by persons like you. The answers are clear, concise, and to the point. In short, this is a veritable cookbook of guidelines, illustrations, and “how-tos” for you, the modern decision maker. Keep it handy for easy reference throughout your busy day.

 

Jae K. Shim

 

Joel G. Siegel

 

Allison I. Shim

PART ONE

Business Strategy, Management, Marketing, and Legal Strategies

CHAPTER 1

Strategic Management and Operations Management (OM)

This chapter provides a discussion of strategic management and production and operations management (P/ OM), including

Mission statement

Strategic management

Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis

Management decision making

Simulation

Capacity management

Location analysis

Time-study procedures

Aggregate planning schedules

Inventory management

Scheduling, including project scheduling

Strategy can be defined as a course of action or a plan, including the specification of resources required, to achieve a specific objective. All business organizations have objectives, but because of the dynamic nature of the organizations’ environments, overall plans or strategies are needed to specify in broad terms just how the objectives of the organizations can be achieved, given the uncertainty of the environments.

Strategic management is therefore concerned with deciding on a strategy and planning how that strategy is to be effected. As such, strategic management has general relevance in that it is relevant for managers in all types of organizations—profit-seeking and nonprofit organizations, state and private sector.

Production and operations management (P/OM) is a vital management activity in both manufacturing and service organizations. It is primarily concerned with the process of transforming organizational resource inputs into final organizational outputs. It is a comprehensive process that treats the organization as a system of interconnected functions. The major functions of P/OM incorporate design, planning, decision making, operations, and system controls.

1.1 THE ORGANIZATIONAL MISSION STATEMENT

What is the purpose of a mission statement?

A mission statement describes the basic operational intent of an organization. It takes a long-term perspective and states the reason for a firm’s existence. Its function is to provide guidance for the firm’s shareholders, customers, and employees about the organization’s overall direction and rationale.

How is a mission statement developed?

A mission statement should be consistent with the organization’s history, including past achievements, organizational culture, attributes, and basic policies. A new organization will take into consideration the history of the industry it is joining as well as the purpose it wishes to serve. Successful mission statements emphasize areas in which an organization has its greatest strengths and resources.

What are the key elements of a mission statement?

A mission statement must be

· Meaningful for the organization’s client or customer base. Organizations must be constantly aware of who their clientele is, and of its requisite needs.

· Realistic and attainable. Unrealistic mission statements will cause an organization to fail.

· Stimulating and inspiring. A motivational mission statement will enhance employee creativity and commitment.

· Definitive and explicit. Unclear mission statements result in dispersed and unsuccessful organizational strategies.

Example 1.1

An independent power producer states that its mission consists of four central values:

...

About this edition

• Publisher: Portfolio
• Publication date: 2004
• ISBN 10: 1591840511
• ISBN 13: 9781591840510
• Binding: Paperback
• Edition number: 3
• Number of pages: 528