Finance for IT Decision Makers

Information technology decisions are usually made by IT experts who often lack the finance and accounting skills to fully understand the financial implications of this capital spending. This book is aimed at IT managers, addressing issues such as: how to budget and account for IT appropriately; how to build a financial case for IT investment; how to use investment appraisal techniques, as well as how to use numerous financial tricks of the trade.

Contenu

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.