EBCL Syllabus
Learning targets
Syllabus
Learning targets for the
European Business Competence* Licence, EBC*L
Level A
· Business objectives and management ratios
· Accounting
· Costing and pricing
· Business law
© EBC*L International, Vienna, 2006-04 – audited by Kuratorium Wirtschaftskompetenz für Europa
Module 1:
Business Objectives and Management Ratios
Overall learning objectives
Upon completing this module, you will be able to
· explain the most important objectives of a company
· explain and compute ratios corresponding to those objectives.
Detailed Learning Targets
Topic Learning Target
1. Profitability 1.1 Being able to define and explain the term “profitability”
2. Return on
equity
2.1 Being able to define and explain the term “return on equity“.
2.2 Being able to compute the return on equity.
2.3 Being able to explain whether generating a profit
automatically means that a company is ‘profitable’.
2.4 Being able to evaluate and classify any return on equity
achieved.
3. Return on
Investment
(ROI)
3.1 Being able to define and explain the term “Return on
Investment (ROI) “.
3.2 Being able to compute the ROI.
3.3 Being able to evaluate and classify any ROI achieved.
4. Liquidity 4.1 Being able to define and explain the term “liquidity“.
4.2 Being able to define and explain the term “liquid funds” and
identify them correctly in the annual financial statements.
4.3 Being able to define and explain the term “liquidity shortage“.
4.4 Being able to explain why the objective of achieving sufficient
liquidity is of central importance.
4.5 Being able to compute the cash ratio.
4.6 Being able to state how high the cash ratio should be and
give reasons for this.
4.7 Being able to compute the quick ratio.
4.8 Being able to state how high the quick ratio should be and
give reasons for this.
4.9 Being able to compute the current ratio.
4.10 Being able to state how high the current ratio should be and
give reasons for this.
4.11 Being able to state whether liquidity or profitability is more
important and why.
5. Equity ratio,
Gearing
5.1 Being able to define and explain the term “equity ratio“.
5.2 Being able to compute the equity ratio.
5.3 Being able to define and explain the term “gearing” .
5.4 Being able to compute the gearing.
5.5 Being able to explain why the equity ratio is of central
importance.
5.6 Being able to explain what facts might influence the credit
worthiness (credit rating) of the company.
Topic Learning Target
6. Cash Flow 6.1 Being able to define and explain the term “cash flow“.
6.2 Being able to compute the cash flow (using the basic
underlying formula)
7. Productivity 7.1 Being able to define and explain the term “productivity“.
7.2 Being able to explain why achieving a high productivity is of
central importance.
7.3 Being able to define and explain the term “return on sales“.
7.4 Being able to compute the return on sales.
7.5 Being able to explain why the return on sales is of central
importance.
Module 2:
Accounting
Overall Learning Objectives
Upon completing this module you will be able to
· Read and understand annual financial statements (balance sheet, profit and
loss account) in principle and draw first conclusions
· Explain the most relevant terms found in annual financial statements.
Detailed learning targets
Topic Learning target
1 Targets of an
annual financial
statement
1.1 Being able to explain the main targets and the purpose of
an annual financial statement (balance sheet, P&L
account)
1.2 Being able to define to whom an annual financial
statement might be of any interest.
2 Function and
Structure of a
balance sheet
2.1 Understanding and being able to explain the basic layout
of a balance sheet.
2.2 Being able to explain why a balance sheet needs to be
“balanced” (total of assets has to be equal to total of
equity and liability)
3 Assets 3.1 Being able to define the term “assets side”.
3.2 Being able to define the term “fixed assets” and state
examples.
3.3 Being able to define the term “current assets” and state
examples.
4 Equity and
liabilities
4.1 Being able to define the term “liabilities side”.
4.2 Being able to define “equity capital” (share capital and
reserves) and explain its meaning.
4.3 Being able to define the term “borrowed capital” and
state examples.
5 Inventory/Stocks 5.1 Being able to explain the purpose of drawing up an
inventory (stocktaking).
5.2 Being able to list and explain the steps in drawing up an
inventory.
6 Profit and Loss
Account (P&L)
6.1 Being able to explain the purpose and define the most
important terms of a P&L account
6.2 Being able to define the terms “expenses” and “income”.
6.3 Being able to define and explain the term “sales revenue”
and calculate this item.
6.4 Being able to define and explain the term “cost of sales”
6.5 Being able to explain the difference between “sales
revenue” and “profit".
7 Accruals 7.1 Being able to explain why the annual financial statements
may contain business transactions that have not yet
given rise to an in- or outflow of funds in the business
year.
Topic Learning target
8 Accounts
receivable
(=Debtors) and
Accounts
payable
(=Creditors)
8.1 Being able to define the term “debtors” and identify them
correctly in the annual financial statements.
8.2 Being able to define the term “creditors” and identify
them correctly in the annual financial statements.
9 Provisions 9.1 Being able to define the term “provisions” and identify
them correctly in the annual financial statements.
9.2 Being able to state reasons for setting up of provisions.
9.3 Being able to explain the differences between
“provisions” and “creditors”.
10 Reserves 10.1 Being able to define the term “reserves” and identify
them correctly in the annual financial statements.
10.2 Being able to state and explain reasons for setting up
reserves.
10.3 Being able to explain the differences between
“provisions” and “reserves”.
11 Depreciation 11.1 Being able to define and explain the term "depreciation".
11.2 Being able to calculate linear depreciation.
11.3 Being able to explain the problems of calculating
depreciation.
12 Capital
expenses
12.1 Being able to define and explain the term “capital
expenditure”.
12.2 Being able to differentiate between expenses that must
be capitalised in the balance sheet and expenses that
can be entered in the P&L account in full.
12.3 Being able to define and explain the term “low-value
assets” that can be directly written off.
12.4 Being able to explain the consequences of expenses that
must be capitalised and expenses that can be directly
written off.
13 Steps of the P&L 13.1 Being able to describe , explain and analyse the P&L in
report form.
13.2 Being able to define and explain the benefits of P&L in
report form compared with P&L in account form
13.3 Being able to define and explain the term “operating
profit/loss” / Profit/loss before interest and tax (PBIT)/
Earnings before interest and tax (EBIT)
13.4 Being able to define and explain the term “financial
result".
13.5 Being able to define and explain the term “profit/loss on
ordinary activities".
13.6 Being able to define and explain the term “extraordinary
result”.
13.7 Being able to define and explain the term “profit/loss
before tax” (PBT) / Earnings before tax (EBT) / Pre-taxprofit.
13.8 Being able to define and explain the term “profit/loss for
the year”
13.9 Being able to define and explain the term “allocation of
reserves”
Topic Learning target
13.10 Being able to define and explain the term “distributable
profit”.
13.11 Being able to identify and compare the operating profit,
the profit/loss on ordinary activities, the extraordinary
result, the pre-tax profit/ loss, the profit / loss for the
year and the distributable profit using the basic underlying
formula.
14 Analysis of the
P&L
14.1 Being able to explain how an operating profit or loss may
have been generated.
14.2 Being able to explain how a profit or loss on ordinary
activities may have been generated.
14.3 Being able to explain how a pre-tax profit or loss may
have been generated.
14.4 Being able to describe and explain the two basic options
for using the profit for the year.
15 Analysis of
financial
statements
15.1 Being able to read a simple financial statement and draw
basic conclusions from it (case study/exercise).
Module 3: Costing and Pricing
Overall Learning Objectives
Upon completing this module you will be able to:
· explain the most important objectives, tasks and key terminology of cost
accounting.
· explain the general factors for entrepreneurial decisions (markets, customers,
competition, cost of sales).
· explain the significance of the contribution margin as a central term in cost
accounting, and compute it.
· explain the objectives and basic structure of cost accounting and profit centre
accounting, and give reasons why cost awareness and entrepreneurial
thinking are necessary.
Detailed Learning Targets
Topic Learning Target
1 Tasks of cost
accounting
1.1 Being able to explain and define the objectives of cost
accounting.
1.2 Being able to explain the difference between financial
accounting and cost accounting.
1.3 Being able to explain why figures taken from financial
accounting have to be adjusted before they can be used
in cost accounting.
2 Terms of cost
accounting
2.1 Being able to define and explain the term “cost elements”
and give examples.
2.2 Being able to define and explain the term “cost centre”
and give examples.
2.3 Being able to define and explain the term “cost unit” and
give examples.
2.4 Being able to define and explain the term “direct costs”
(also called: prime costs) and give examples.
2.5 Being able to define and explain the term “overhead
costs” (also called: indirect costs or overheads) and give
examples.
2.6 Being able to define and explain the term “fixed costs”
and give examples.
2.7 Being able to define and explain the term “variable costs”
and give examples.
2.8 Being able to explain the basic difference between full
cost accounting and direct cost accounting.
3 Pricing 3.1 Being able to explain which factors significantly influence
the price of a product.
3.2 Being able to explain the interaction between demand
and supply and the concept of a “market price”
3.3 Being able to define and explain the various market
forms (monopoly, oligopoly, perfect competition).
3.4 Being able to attribute various price margins to the
respective market forms and give reasons for your
decisions.
3.5 Being able to explain different possible price strategies.
Topic Learning Target
3.6 Being able to explain the term “fixed costs degression”
and its influence to the business`strategy.
3.7 Being able to define and compute the contribution margin
of a product or sale.
3.8 Being able to explain the significance of contribution
margin for price calculations.
3.9 Being able to explain the effects of a positive or negative
contribution margin on the operating result.
3.10 Being able to explain the effects of capapcity (full or
spare) for price calculations.
3.11 Being able to explain the basic difference between shortterm
and long-term break-even price.
3.12 Being able to compute the short-term and the long-term
break even price (for one-product-companies).
3.13 Being able to explain “economies of scale”.
4 Cost centre
accounting
4.1 Being able to explain the purpose of cost centre
accounting.
4.2 Being able to explain the purpose of an overhead
allocation sheet and reproduce its basic structure.
4.3 Being able to compute costs for a cost centre.
4.4 Being able to explain the purpose of cost allocation for
internal and shared services.
5 Profit centre
accounting
5.1 Being able to explain the purpose and basic structure of
profit centre accounting.
5.2 Being able to compute the contribution of a profit centre.
5.3 Being able to state why a positive “contribution” of a profit
centre cannot be equated with “profit”.
5.4 Being able to explain basic measures to improve the
contribution of a profit centre.
Module 4:
Introduction to Business Law
Overall Learning Objectives
Upon completing this module you will be able to
· explain the characteristics, advantages and disadvantages of the principal
legal forms of business organisation
· explain the main features of a sales contract