Your SlideShare is downloading. ×
0
What Financial Condition is Your Agricultural Society in?
What Financial Condition is Your Agricultural Society in?
What Financial Condition is Your Agricultural Society in?
What Financial Condition is Your Agricultural Society in?
What Financial Condition is Your Agricultural Society in?
What Financial Condition is Your Agricultural Society in?
What Financial Condition is Your Agricultural Society in?
What Financial Condition is Your Agricultural Society in?
What Financial Condition is Your Agricultural Society in?
What Financial Condition is Your Agricultural Society in?
What Financial Condition is Your Agricultural Society in?
What Financial Condition is Your Agricultural Society in?
What Financial Condition is Your Agricultural Society in?
What Financial Condition is Your Agricultural Society in?
What Financial Condition is Your Agricultural Society in?
What Financial Condition is Your Agricultural Society in?
What Financial Condition is Your Agricultural Society in?
What Financial Condition is Your Agricultural Society in?
What Financial Condition is Your Agricultural Society in?
What Financial Condition is Your Agricultural Society in?
What Financial Condition is Your Agricultural Society in?
What Financial Condition is Your Agricultural Society in?
What Financial Condition is Your Agricultural Society in?
What Financial Condition is Your Agricultural Society in?
What Financial Condition is Your Agricultural Society in?
What Financial Condition is Your Agricultural Society in?
What Financial Condition is Your Agricultural Society in?
What Financial Condition is Your Agricultural Society in?
What Financial Condition is Your Agricultural Society in?
What Financial Condition is Your Agricultural Society in?
What Financial Condition is Your Agricultural Society in?
What Financial Condition is Your Agricultural Society in?
What Financial Condition is Your Agricultural Society in?
What Financial Condition is Your Agricultural Society in?
What Financial Condition is Your Agricultural Society in?
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

What Financial Condition is Your Agricultural Society in?

164

Published on

Published in: Business, Economy & Finance
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
164
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
0
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. What financial condition is your Agricultural Society in? “ Understanding your financial performance” Presented to the Alberta Association of Agricultural Associations Yvonne Barthel, Senior Manager KPMG Lethbridge (403) 380 – 5744 Friday, February 10, 2006
  • 2. Welcome!
  • 3. Agenda
    • The Budget – Do you have a plan?
    • What financial condition are you in?
    • Your financial statements – what do they say about you?
  • 4. How many accountants does it take to change a light bulb? Two. One to change the bulb and one to check it was done within budget.
  • 5. The Budget Planning for Success
  • 6. The Budget – Your Financial Road Map
    • A budget is the translation of strategic plans into measurable quantities that express the expected resources required and the anticipated returns over a period of time.
    • A detailed estimate of future transactions, designed to provide a plan for and control over future operations and activities.
  • 7. Budget Scope
    • Budgets are normally developed for a specific program of activities
    • Budgets are prepared for:
        • Operations
        • Capital expenditures
        • Cash Flow
  • 8. Budgets - The 4 Basic Functions
    • Planning
    • Coordinating and communicating
    • Monitoring progress
    • Evaluating performance
  • 9. Planning
    • Involves a process to ensure the organization will have the necessary resources to achieve its goals.
    • It involves building assumptions to facilitate economic modeling
    • Strength of the budget is dependent upon thorough planning
  • 10. Coordinating & Communicating
    • Coordination involves pulling the pieces together to achieve the Master Budget.
    • Expresses the organization’s overall financial objectives and strategic goals.
    • To achieve success, communication is essential.
  • 11. Monitoring Progress
    • Timely and periodic monitoring allows management to track progress by comparing actual results to expected or planned results.
    • Through the monitoring process we are able to identify variance. We can then take action to ensure we stay the course.
  • 12. Tracking your budget
    • To track your budget:
    • Assess monthly revenue performance versus budget
    • Assess monthly expense performance versus budget
    • Determine the effect variances will have on your overall bottom line
  • 13. Evaluating Performance
    • Managers are held accountable for the performance of their department and their contribution to the goals of the organization as a whole.
    • Performance is often evaluated against the budget or plan.
  • 14. Tips for Effective Budgeting
    • Stay goal-oriented
    • Be realistic, achievable but with stretch
    • Don’t try to do it alone
    • A budget is not a substitute for regular communication
    • Don’t use the budget to deny requests
      • consider if part of your mandate
  • 15. Where do we start?
    • Analyze the organizational strategy
    • Understand the targets
    • Document your assumptions
    • Quantify your assumptions
    • Take a step back
  • 16.
    • To some degree, preparing a budget involves crunching numbers – a process being left more and more to financial models, computers and technology.
    • Behind the budget are people - like you - who develop the assumptions, people who know the operations and consider the strategic goals.
  • 17. Analyzing Financial Performance What financial condition are you in? Accounting will prove anything. Even the truth!
  • 18. Analyzing and Interpreting Financial Statements
    • Financial Statements provide a wealth of information
    • Analyzing and interpreting this information is key to making informed decisions and developing successful strategies
  • 19. Analysis and Interpretation
    • What do the numbers tell us?
    • How can we use the financial statements in financial forecasting?
    • Value of informed decision making.
  • 20. Tips for Analyzing
    • Consider the context
    • Compare your department to your peers
    • Watch for trends
  • 21. Financial Statement Analysis
    • Comparison to budget
    • Comparison to prior years
    • Trend analysis
    • Peer group comparison
  • 22. Ratio Analysis
    • Provides a means of digging deeper into the information contained in the financial statements.
    • A financial Ratio is a means of expressing key components in relation to other components
    • Value added when compared to peers or a predetermined benchmark
  • 23. Ratio Analysis – normally four areas
    • Liquidity Ratios
    • Profitability Ratios
    • Operating Ratios
    • Leverage Ratios
  • 24. Liquidity Ratios
    • Current ratio
        • Current assets / current liabilities
    • Quick ratio
        • (Cash +short-term investments+A/R) / Current liabilities
  • 25. Profitability Ratios
    • Not as relevant for “NPO’s”
      • Return on assets (ROA)
      • Return on equity (ROE)
      • Return on revenue (ROR)
  • 26. Operating Ratios
    • Days in receivables
    • Days in payables
  • 27. Leverage Ratios - what is the strength of your organization?
  • 28. Strength of your organization
    • Capital assets – what % is yours versus externally funded?
    • Age of assets – accumulated depreciation as a % of total assets.
      • What is the age of your facilities?
      • will determine how much is required in reserves
  • 29. Strength of your organization, cont’d:
    • Interest coverage
    • Net assets as a % of total assets
    • Debt to equity
  • 30. What are your financial statements saying about you?
    • What are your (future) plans?
      • Have they been determined?
      • Are restricted net assets reflecting your goals?
  • 31. What are your financial statements saying about you?
      • Are comparisons to budget reflected?
  • 32. What are your financial statements saying about you?
    • Statement of cash flows
    • Prepared in accordance with generally accepted accounting principles
      • Peer to Peer
      • i.e. depreciation
  • 33.
    • What is the definition of an accountant?
    • Someone who solves a problem you did not know you had in a way you don't understand.
  • 34.
    • Members are your users
    • What do they see?
      • Their view of your organization may be affected
  • 35.
    • Questions?

×