Jae K. Shim - The Vest-Pocket MBA

Table of Contents

PORTFOLIO / PENGUIN

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, Barrons Accounting Handbook, 20112012 Corporate Controllers 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, Barrons, 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. Siegels 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 Whos Where Among Writers and in Whos 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.

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.

Preface

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

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 companys 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 companys financial position should you wish to invest, extend credit, or compare. You will also learn how to improve a companys corporate profitability and shareholder value. We present internal managerial accounting applications to help you evaluate your own companys 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.