Introduction to
Financial
Accounting
Session 1
Prof Ankur Mehra, PhD
Monsoon 2023 Semester
Office: B – 220F
E: ankur.mehra@snu.edu.in
School of Management & Entrepreneurship
Shiv Nadar IoE
Few Points
• This is an important course
• Everyone can do well in this course – No maths involved
Introduction to Financial Accounting L1 | Monsoon 2023 Semester | Shiv Nadar University
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Agenda in Session 1
• Course Introduction
• Forms of Business Organizations
• What is Accounting?
• Business Goals & Activities
• Users of Accounting
• Communication with users – Financial Statements
• Other Elements of Annual Report
• Governance Structure
Introduction to Financial Accounting L1 | Monsoon 2023 Semester | Shiv Nadar University
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Introduction to the Course
• Orientation to Accounting, Accounting Definition, Users and Uses of
financial statements, Qualitative characteristics, basic concepts and
assumptions and the Accounting equation
•
Sessions
Accounting Cycle: Mechanics of recording transactions in Journal, Ledger, 1 to 8
Trial balance, Adjusting Entries, Adjusted Trial Balance, Closing entries
and post-closing Trial Balance
• Preparation and Understanding of Income Statement
Sessions 8 - 10
• Preparation and Understanding of Balance sheet
Sessions 10 -13
•
Using some tools for Analyzing the Financial statements
– Common‐Size, Trend, Ratio analysis – Relaxo Footwear
Sessions 14, 15, 16, 17
•
Preparation and Understanding of Cash flow statement
Sessions 17, 18, 19, 20
• Accounting for tangible fixed assets, inventory valuation, Revenue
recognition and trade receivables, Future of Financial Accounting,
Course Wrap-up
Introduction to Financial Accounting L1 | Monsoon 2023 Semester | Shiv Nadar University
Sessions 21 to 27
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Course Plan
Quarter 1 – Session 1 to 8
Quarter 2 – Session 8 to 13
Session
14-20
Quarter 3 – Session 14 to 20
Session
8-13
Quarter 4 – Session 21 to 27
Session
5-8
Session
1- 5
Overview
Accounting
Cycle
FSA 1
• Income Statement
• Balance Sheet
FSA 2
• Ratio Analysis
• Cash Flow
Statement
Session
21-27
Financial
Reporting
• Selected IndAS
• Tangible Fixed
Assets
• Inventory Valuation
• Revenue
Recognition
• Trade Receivables
• Journal Entry
• Ledger
• Trial Balance
• ALE
• Transaction
Analysis
Introduction to Financial Accounting L1 | Monsoon 2023 Semester | Shiv Nadar University
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Grading & Evaluation
Grading
Quiz/Exam
Weight
Syllabus
Quiz 1
10%
Quarter 1 (Session 1
to 8)
Mid-term Exam
30%
Quarter 1 & 2
(Session 1 to 13)
Quiz 2
10%
Quarter 3 (Session
14 to 20)
Project
20%
End-term Exam
30%
Schedule
Announced
Quiz
Mid-term Week
Announced
Quiz
After Session
20
Quarter 3 & 4
(Session 14 to 27)
Introduction to Financial Accounting L1 | Monsoon 2023 Semester | Shiv Nadar University
During Endterm Week
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Text Book
Text Book“Financial Accounting” by Libby, Libby
& Hodge, Indian Edition, Mc Graw Hill,
9th Edition; ISBN: 978-93-5316-651-9
Reference Book:
1. “Financial Accounting” by Kimmel,
Weygandt & Kieso, International Student
Version, Wiley Publications, 7th Edition;
ISBN: 9788126551262
2. Accounting: Text and Cases by Anthony,
Hawkins & Merchants. McGraw Hill
Education, 13th Edition
3. Essentials of Financial Accounting for
Business Managers - Ashish K Bhattacharya
– Sixth Edition – PHI Learning
4. Ashish K Bhattacharya (2018) Corporate
Financial Reporting and Analysis, PHI
Learning, India; ISBN: 978-9387472990
Teaching Assistant – Sonal Chaudhary and Rupak Thapa
Introduction to Financial Accounting L1 | Monsoon 2023 Semester | Shiv Nadar University
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The Do’s
•
The Do’s
– Required: Textbook, Course plan and Calculator
– Go through the readings suggested as per the session plan
– Prepare for the case before coming to the class based on case‐questions (will be provided to you) and
attempt problems for problem-based sessions
– Study‐groups: For learning together and for Project submission
– Contact me when in doubt or have any query :
– Office‐ Block B – 220F , Ext 421
– E: Ankur.mehra@snu.edu.in
– Office Hours: Wednesday 4 PM to 5 PM & Mondays 4 PM to 5 PM
Introduction to Financial Accounting L1 | Monsoon 2023 Semester | Shiv Nadar University
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The Schedule and The Don’ts
Days
Timing
Tuesdays
02:00 PM – 03:25 PM
Thursdays
02:00 PM – 03:25 PM
100% Attendance Expected
If Attendance is below 75% - F Grade
The Don’ts
– Don’t be late for the class
– Don’t postpone your work
– Don’t violate academic integrity – Heavy Penalties
Introduction to Financial Accounting L1 | Monsoon 2023 Semester | Shiv Nadar University
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Plagiarism (1/3)
Introduction to Financial Accounting L1 | Monsoon 2023 Semester | Shiv Nadar University
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Plagiarism (2/3)
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Plagiarism (3/3)
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Why you should learn Financial Accounting?
• DMart, is an Indian chain of hypermarkets in India founded by Radhakishan Damani in
the year 2002.
•
As of 31 December 2020, it had 234 stores in 72 cities across 11 states in India
Introduction to Financial Accounting L1 | Monsoon 2023 Semester | Shiv Nadar University
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Why you should learn Financial Accounting?
Financial
Year
2022-23 (in
Cr)
2021-22 (In
Cr)
2020-21 (In
Cr)
2019-20 (In
Cr)
2018-19 (In
Cr)
2017-18 (In
Cr)
2016-17 (In
Cr)
Revenue
INR 42,840
INR 30,976
INR 24,143
INR 24,738
INR 19,967
INR 15,081
INR 11,912
Net Income
INR 2,379
INR 1,492
INR 1,099
INR 1,349
INR 936
INR 784
INR 482
Market Cap
INR 2,32,014
INR 2,84,933
INR 183, 523
INR 142,466
INR 91,957
INR 82, 512
INR 39,035
Share Price
(31st March
20**)
INR 3,401
INR 4,437
INR 2859
INR 2187
INR 1471
INR 1324
INR 637
Listed 21 March 2017
Reason behind
Dmart success?
Issue Price – INR 299 per share
Listing Price – INR 600 per share
Current Price – INR 3,401 per share
CAGR – 24% over listing price
Introduction to Financial Accounting L1 | Monsoon 2023 Semester | Shiv Nadar University
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Why you should learn Financial Accounting?
Accounting is the Language of Business
– Company uses the language to speak about its financial performance, position and cash flows.
– Analysts, investors and other users understand the language and rely on the information to
make their decisions
– Learning accounting can help an investor identify such opportunities to invest
Introduction to Financial Accounting L1 | Monsoon 2023 Semester | Shiv Nadar University
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Source:https://www.infosys.com/investors/reports-filings/quarterly-results/2023-2024/q1.html
Introduction to Financial Accounting L1 | Monsoon 2023 Semester | Shiv Nadar University
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Source: Google Finance
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Why you should learn Financial Accounting?
A manager needs to understand the business language so that
• He can use the language to communicate what he intends to do
• He can understand the implications of his actions and the way his
actions are going to be evaluated
• Example: HCLTech said on August 10 that it has signed a $2.1-billion deal with
Verizon Business for providing managed network services to its global enterprise
customers. This deal will be a shot in the arm for country's third largest IT services
firm, following a sluggish April-June quarter performance. Share prices of the tech
giant were up 3.7% at Rs 1176 in early trade on Friday morning.
(Economic Times, 10 August 2023)
• Bata India is in talks with footwear giant Adidas for a strategic partnership for the
Indian market, CNBC-TV18 reported on Thursday, citing sources. As of 11:10 am,
the share of Bata India was trading with gains of 1.80 per cent, while the benchmark
indices were trading down nearly 0.3 per cent. (Economic Times, 17 August 2023)
Does an entrepreneurs need to know Accounting?
Introduction to Financial Accounting L1 | Monsoon 2023 Semester | Shiv Nadar University
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Why you should learn Financial Accounting?
An entrepreneur needs to understand the business language so that
– One can use the language to raise money
Example: Pay Later solution platform ZestMoney on Tuesday said it has raised fresh capital from existing
investors—Quona Capital, Omidyar Network India, Flourish Ventures, Zip, and Scarlet Capital—to support its
business and continue operations.
(Your Story, August 08 2023)
– One can understand the implications of his/her actions and the way his/her
actions are going to be evaluated
Example: Zomato is coughing up as much as ₹4,447 crore to acquire Blinkit (formerly Grofers) in a proposed
all-stock deal as it eyes a pie of the quick commerce market, which analysts at Kotak Institutional Equities say
has the potential to touch about ₹20,400 crore by FY2025 and ₹60,300 crore by FY2030. The markets,
though, are visibly unhappy — Zomato’s stock has shed over 13% through the last two trading sessions.
(Fortune India, 19 June 2022)
Introduction to Financial Accounting L1 | Monsoon 2023 Semester | Shiv Nadar University
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Thank You
“Do you know what you are?
You are a manuscript of a divine letter.
You are a mirror reflecting a noble face.
This universe is not outside of you.
Look inside yourself;
everything that you want,
you are already that.”
― Rumi