10 Finance and accounting Financial statements Statement of profit or loss→ Statement of financial position→ Inventory valuation→ Depreciation→ Analysis of published accounts Liquidity ratios→ Profitability ratios→ Financial efficiency ratios→ Gearing ratio→ Investment ratios→ Investment appraisal The concept of investment appraisal→ Basic methods: payback, accounting rate of return (ARR)→ Discounted cash flow method: net present value (NPV)→ Investment appraisal decisions→ Finance and accounting strategy The use of accounting data to enable strategic decision-making→ The use of accounting data and ratio analysis in strategic decision-making→
