Finance for It Decision Makers: A Practical Handbook for Buyers, Sellers and Managers

ISBN-13: 9783540762324 / Angielski / Miękka / 1998 / 214 str.

Michael Blackstaff

Opis

Purpose The purpose of this book is to explain to information technology (IT) decision makers those aspects of finance that most affect their work. Most IT decision makers belong in one of two categories. Some know a lot about IT, but less about finance; the others know a lot about finance, but less about IT. In my experience, those in the first category often have to make financial decisions. Those in the second also, of course, have to make financial decisions, but about things whose characteristics stretch the normal financial and accounting rules up to, and sometimes beyond, their elastic limit. Among the characteristics of IT that provide interesting challenges for financial people are the following: The accelerating rate of change The short and unpredictable useful life of IT assets The mixture of hardware, software and services Upgradability Networks that cross country boundaries IT jargon Asked what characteristics of finance provide interesting challenges for IT people, many of them would answer - "Everything." However, items in the following selection are often particular causes of wonder: Leasing Why financial models always shrink benefits but never costs Being told that a company with a mountain of profit is about to fail through lack of cash Discovering that their budget has been charged with 113 485."

Spis treści

1 Finance for IT Decision Makers.- 1. Decisions, Decisions.- What is Cashflow?.- A Financial Case.- What is Discounted Cashflow?.- The Cost of Money.- Present Value.- Interpreting Present Values.- 2. Financial Cases and Business Cases.- Cost Cases.- Cost/Benefit Cases.- Business Cases.- What is a Benefit?.- Cashflow and Profit.- A Sound Basis for Decision Making?.- 3. When is a Benefit not a Benefit?.- How to Build an IT Financial Case.- Example 3.1: The Situation.- Example 3.1: The Task.- Example 3.1: The Solution.- Example 3.1: Explanations.- What Cashflows are Relevant?.- Is it a Worthwhile Investment?.- 4. How Financial Cases are Evaluated - Part 1.- Present Value Revisited.- The Cost of Capital.- Applying Present Values.- Internal Rate of Return.- NPV, IRR and Risk.- 5. How Financial Cases are Evaluated - Part 2.- Payback.- Payback and Risk.- Discounted Payback.- Return on Investment (ROI).- ROI and Risk.- Shareholder Value Added.- The Methods Compared.- 6. The Effects of Taxation.- Personal Tax.- Business Tax.- Capital Allowances.- How Does Tax Affect an IT Financial Case?.- After-Tax Evaluation of an Investment.- The Results Compared.- Taxation and Leasing.- 7. IT Leasing - Part 1.- What is a Lease?.- How IT Leasing Developed.- Types of Lease.- Finance Leases.- Whose Balance Sheet?.- Sale and Lease-Back.- Hire Purchase.- Leasing and Financial Cases.- 8. IT Leasing - Part 2.- Operating Leases.- Residual Value (RV).- Whose Balance Sheet?.- Risk and Reward.- Non-Full-Payout Finance Leases.- Composite Leases.- Exchange Leases.- Rental.- International Financing.- “Small Ticket” Financing.- The Wilder Shores of Leasing.- 9. IT Aspects of Depreciation and Budgets.- Depreciation of IT Assets.- Loss on Disposal.- Depreciation of Upgradable Assets.- Budgets.- How Much Flexibility?.- Budgets and Leasing.- 2 Finance Fundamentals in a Nutshell.- 10. Finance Fundamentals - Bringing it Together.- Ways to Run a Business.- Limited Companies.- How a Business Works.- Example 10.1: Part 1 - How Transactions Affect the Balance Sheet.- Example 10.1: Part 2-Typical Adjustments.- Example 10.1: Part 3-The Profit and Loss Account.- Example 10.1: Part 4-The Cashflow Statement.- Relating Cashflow to Profit.- Published Accounts.- 11. Finance Fundamentals - Pulling it Apart.- Financial Analysis.- Example 11.1: A Sample Company-JMB Limited.- Profitability Ratios.- Activity (or Capital Productivity) Ratios.- Liquidity (or Cash Management) Ratios.- Gearing Ratios.- Stock Market Ratios.- Other Ratios.- Shareholder Value Added.