Lecture Presentation Strategic Management for Engineering Enterprise PSU, Urdaneta City

1. Accounting
Tools
Sherwin M. Arcipe
Discussant
Strategic Management in Engineering Enterprise
Jo B. Bitonio, DPA
Professor

2. ACCOUNTING
A service activity whose function
is to provide quantitative
information, primarily financial
in nature, about economic
entities, that is intended to be
useful in making economic
decisions.

3. ACCOUNTING
In general sense, ACCOUNTING
is an information system that
provides reports to stakeholders
about economic activities and
condition of the organisation.

4. ACCOUNTING INFORMATION SYSTEM
Raw Data Process Information

5. ACCOUNTING INFORMATION SYSTEM
Financial
Statements
/ Reports
Accounting
Summary

6. Financial
Statements
Financial Income Changes in
Cash Flow Notes
Position Statement Equity

7. How we are going to
use this accounting
information as a tool?

8. Decision
Making
Financial
Statements
Organisation

9. Unaudited Management
Financial
Statements
Audited Stakeholders

10. Why Accounting?
Accounting is
the tool for
providing
financial
information to
various
stakeholders

11. Management
Financial Statement is
a tool to measure the
Efficiency and
Effectiveness of
management.

12. Management

13. Example

14. Audited Financial Statement
San Miguel Corporation and Subsidiaries
Consolidated Financial Statements
December 31, 2011, 2010 and 2009

15. Financial Position
 It shows the financial
structure of the
business
 Current assets are
directly used for and
are accordingly
managed to impact the
operating activities
 The noncurrent assets
represent the long term
commitment of the
business to carry on its
long term objectives.

16. Financial Position
 All assets account
represent investment
allocated by management
for a purpose to give a fair
return.
 Liabilities represent
obligation and capital
provided by third party (in
general)
 Equity represents
permanent capital
provided by
owners/stockholders itself.

17. Financial Position
Assets Liabilities Equity
2009 P 438,491 P 197,553 P 240,938
2010 P 829,800 P 562,975 P 266,825
2011 P 890,536 P 591,436 P 299,100

18. Financial Position
Analysis

19. ASSETS (in millions)
YEAR Current Noncurrent Total
2009 P298,113 P140,378 P438,491
2010 P279,538 P550,262 P829,800
Increase (decrease) (P18,575) P409,884 P391,309
2011 P308,179 P582,357 P890,536
Increase P28,641 P32,095 P60,736
LIABILITES (in millions)
YEAR Current Noncurrent Total
2009 P94,029 P103,524 P197,553
2010 P178,224 P384,751 P562,975
Increase P84,195 P281,227 P365,422
2011 P190,830 P400,606 P591,436
Increase P12,606 P15,855 P28,461

21. 2010 2009

22. Statement of Financial Position

23. Statement of Financial Position

25. ROI Net
Income
Average
Investment

26. RETURN ON INVESTMENT
NET AVE.
YEAR ROI
INCOME INVESTMENT
2009 60,629 388,932 16%
2010 24,056 634,145 4%
2011 28,504 860,168 3%

27. IRR ROI

28. INTERNAL RATE OF RETURN
 Is the breakeven rate of
return
 Minimum required rate of
return
 Useful in making decision
whether to accept or
reject some projects
 If the IRR is higher than
the cost of capital or ROI
the project is acceptable

29. INTERNAL RATE OF RETURN
 Is the breakeven rate of
return
 Minimum required rate of
return
 Useful in making decision
whether to accept or
reject some projects
 If the IRR is higher than
the cost of capital or ROI
the project is acceptable

30. INTERNAL RATE OF RETURN
 Very important tool in
capital budgeting whether
to accept or reject certain
project.

31. INTERNAL RATE OF RETURN
 Very important tool in
capital budgeting whether
to accept or reject certain
project.

32. Statement of Cash flows
 Provide information about the movement
of cash with the following 3 activities;

35. References:
 PFRS (Philippine Financial Reporting Standard)
 IFRS (International Financial Reporting
Standard)
 Financial Reporting (Theory and Practice) 2012
Edition Volume 1; Zues Vernon B. Milan
 Management Advisory Services 2012 Edition
(Franklin Agamata)
 www.sanmiguel.com.ph

36. THANK YOU FOR LISTENING
by: SHERWIN ARCIPE