The accounting knowledge that the president should know is 2 books that train intuition and insights (Nikkei style) --Yahoo! News

What is the basics of management that the top should know properly? If you have achieved a track record in front of you, and when you go up to the president, you may have a moment when you suddenly become anxious or lose confidence. Introducing a business book that will be the most important decision of an up -and -coming consultant who has been close to the president's worries. ◇ ◇ ◇ "ROA, ROE, ROIC, cash flow ...". I don't understand the meaning of the words flying over my head at a meeting. In the first place, I just needed to care only about the target value and progress of the budget, and somewhere I think that if I make a profit, it would be fine. If you look at the meaning of words after the conference is over, it is doubtful that the definition is slightly different depending on the reference destination, and it is necessary to worry about such ambiguous words. If you become the president and have such true intentions, banks and investors may be facing so. The president is not allowed to say, "If you make a profit, that's fine." Understanding finance requires basic knowledge of accounting, but it is extremely difficult to understand in a short period of time. If you have such a problem, please remember only the relationship between BS (balance sheet) and PL (profit and loss statement). BS has a "weapon" that the company has. For example, the money collected to do business, and factories and products made with that money. PL is written with sales and profits, that is, "battle results," written based on these weapons. The following two books are recommended based on the fact that weapons and battle results are separately described in BS and PL.

■ What is "BS and PL"?

"New Edition Finance 3 Literature Inspection Method" Asahi Shinsho by Sadakatsu Kunisada

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Katsunori Sadakatsu's "New Edition Financial 3 Public Fiutical Analysis Law" (Asahi Shinsho) visually represents the relationship between BS and PL based on the examples of various companies, and it is no exaggeration to say that it is the most important indicator for the president. It explains the concept of ROE (Return of Equity). ROE is an indicator of how much profit (net income) has been issued for capital (such as capital). The capital is the money invested by shareholders, and when the expression of this book is borrowed, ROE tells the shareholders as "how much interest (net income) has created the capital I have invested in a year." It is an index to measure. The capital is written on the BS, and the net income is described in the PL. ROE indicates how efficiently the money of shareholders is making money by taking the BS's own capital as the denominator, using the net profit of the PL as the denominator. This book expresses the relationship between BS and PL in a figure. BS's own capital is large, but if the profit of PL is small, it is inefficient. By visually arranging B S and PL on the left and right, it shows the difference between the two sizes and makes it intuitive to understand it intuitively, so even if you are worried about the understanding of the detailed finance terms, what is discussed. Easy to understand if you are. If you can understand the relationship between BS and PL intuitively, you'll see that no matter how much PL's profits are, that's useless. For example, a business that makes the same profit of 100 million yen is meaningful depending on whether it is a profit of 100 million yen for a capital of 1 billion yen or a profit of 100 million yen for a capital of 5 billion yen. Is different. The former is clearly more efficient. I think from the president's point of view, "I don't know how efficiently I spend on shareholders' money." It's like you're gone, and no one will invest any money. If you understand ROE, you can avoid such a situation. ROE is an index that simply expresses the relationship between shareholders and the company. The more money you have created by the company, the higher the ROE and the more satisfaction of shareholders, the easier it will be. So why are there various other indicators besides ROE? Shouldn't we look only at ROE? There are two reasons why I can think of it. One is that ROE is too simple, and it is difficult to understand what is the problem of the company's bite when the numbers are bad. The other is that the ROE is high or low cannot be judged only by looking at it alone. For example, when it is said that ROE of Company A is 2%, it is not known whether 2%is a good figure. Regarding (1), "New Edition Financial 3 Pictures Inspection Method" is introduced more deeply by explaining indicators that disassemble the ROE, which is said to be Dupon model. If you want to know more details, including ②, we recommend that you step into the application.

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