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Accounting Basics for the Engineer

David J. Nowacki, MBA

Course Outline

Accounting Basics for the Engineer targets the engineer and engineer-owner/manager in outlining key accounting and financial concepts.  Simple and basic topics are introduced to aid the professional practitioner in dealing with non-engineering professions such as commercial bankers, investment bankers and accountants. The course participant will learn the differences between:  cash flows versus profits, return of investment versus return on investment, accrual versus cash accounting, and book versus market values.

The course covers the following major subjects:

    Accounting vs Finance
    Government’s role (taxes!)
    Differences between “Of” and “On”
    Depreciation, Book value, Market Value, Goodwill
Accounting Statements
Usage (external and internal) of financial and accounting data

This course includes a multiple-choice quiz at the end, which is designed to enhance the understanding of course materials.

Learning Objective

At the conclusion of this course, the student will be able to:

Intended Audience

The topic of basic accounting is suitable for all professional engineers.  PE’s tend to be in middle or upper management positions including ownership roles.  As such, they are required to deal with other professionals such as clients, lenders, investors/partners or their internal support personnel.  Knowledge of what those professionals seek and target in their financial reviews aide the engineer, engineer-manager and engineer-owners.

Benefit for Attendee

Knowledge of how financial markets and accounting greatly benefit the engineer.  In a the most basic application, engineers can better understand budgetary requirements, formats and needs of the organization with the possibility of creating better responses (to get THEIR projects funded).  At the other end of the spectrum, PE’s tend toward more business decisions than pure engineering later in their careers.  Basic knowledge of accounting can better steer the engineer’s career and significant business/financial decisions.

Course Introduction

This course, Accounting Issues, is designed to advance the professional engineer within his technical field by introducing or re-introducing languages from the accounting and finance professions.   The professional engineer will be better suited in a corporate or entrepreneurial environment if they can grasp the nuances of the financial arena and for the purpose to advance the professional engineer in his overall career activities.

There is a “language to business”, specifically accounting and finance topics.  Much of this language has crept into “street lingo” or common language.  However, sometimes these phrases are incorrectly used so the student should be aware that there are specifics definitions needed to be learned (or “unlearned” then re-learned correctly).   For example, while “sales” and “revenues” are generally considered the same thing, profits and cash flow are not definitions of each other.  Cash is not the same as profits; cash is not the same as a “sale” and profits are not cash flow! It is possible to have a profitable operation with negative cash flow.  It is possible to have an operation generating cash but not be profitable.  Understanding these differences is important for smooth operating departments, divisions and business units. We begin with preliminary introductions into certain accounting and financial topics to serve as a background and base for further topics, is the first order of this course. 

About Course Author

Professor David J. Nowacki is an adjunct professor teaching graduate finance courses at Texas A&M University-Commerce and through the Mechanical Engineering Department at Southern Methodist University (SMU), Dallas, Texas.  Mr. Nowacki has 20 years experience in the investment-banking arena having worked for Wall Street firms in New York City, San Francisco, Houston and Dallas.  His specialty is fixed income securities and derivatives including hedge strategies.  Mr. Nowacki also consults on merger and acquisitions, strategic planning and the venture capital arena.

Course Content

The course content is contained in the following PDF file:

Accounting Basics for the Engineer

Please click on the above underlined hypertext to view, download or print the document for your study. Because of the large file size, we recommend that you first save the file to your computer by right clicking the mouse and choosing "Save Target As ...", and then open the file in Adobe Acrobat Reader. If you still experience any difficulty in downloading or opening this file, you may need to close some applications or reboot your computer to free up some memory.

Course Summary

If you think the financial statements reported by public companies are just a bunch of numbers providing very little information, you are not alone.  Looking for the financial statements to provide “answers”……….. is entirely wrong!  The financial statements ARE a bunch of ‘meaningless’ numbers and they provide very little information… least on the surface!  What are financial statements and what is the “EUREKA”?

Financial statements are TIPS OF ICEBERGS……..they do not provide answers to many questions….what financial statement should do is create hundreds, if not thousands, of questions…..and only the answers to that multitude of questions does information make sense. 

How are revenues booked?  What makes up your COGS?  Where is overhead allocated to COGS versus SG&A?  Are you cash or accrual based?  It is only after these questions are answered that one can have an insight into this entity.

However, once these questions are answered, you only have insight to this one entity as each entity may have different assumptions. 


Once you finish studying the above course content, you need to take a quiz to obtain the PDH credits.

Take a Quiz

DISCLAIMER: The materials contained in the online course are not intended as a representation or warranty on the part of PDH Center or any other person/organization named herein. The materials are for general information only. They are not a substitute for competent professional advice. Application of this information to a specific project should be reviewed by a registered architect and/or professional engineer/surveyor. Anyone making use of the information set forth herein does so at their own risk and assumes any and all resulting liability arising therefrom.