On November 30, 2022, logmi Business published an interview with our CEO, Tetsuro Kondo. The title translates as "The benefit of learning accounting is that you come to understand the 'rules' of business: the author of Kaikei no Chizu on the relationship between work and money."
As the author of Kaikei no Chizu (Map of Accounting), he talks about what people in business come to understand once they learn accounting.
What the article covers
- Why learn accounting: accounting exists to explain the money going in and out of a company. It is used as a set of rules that must be followed, as in the financial disclosures of listed companies
- Two ways to raise profit: increase sales, or reduce costs. Work in departments that do not directly generate sales also leads to profit, by cutting costs or raising productivity
- How fast profit appears differs by industry: costs are split into variable costs, which move with sales, and fixed costs, which are incurred regardless of sales. Businesses with large fixed costs, such as airlines and hotels, take longer to become profitable
- Financial and management accounting: variable and fixed costs do not appear in financial statements. They belong to management accounting, which each company sets up for itself
- Clues to a company's condition: the roles of the income statement, balance sheet and cash flow statement, and indicators such as PBR and ROE
- How Japanese listed companies are valued: he explains why many have a PBR below 1, by breaking PBR down into PER and ROE
- Raising corporate value: he points to value that does not appear as an asset in financial statements, such as brand, trust and know-how
Our Map of Accounting framework shows how to follow sales, costs and profit through to corporate value in diagrams of the same shape.
Details
- Outlet: logmi Business
- Published: November 30, 2022
- Speaker: Tetsuro Kondo, President and CEO, ZUKAI Inc.
