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Finance for non financial personnel - part 4

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Many non-financial personnel find finance is mystical and somehow cannot comprehend financial information.

The 8 parts of the presentation are designed to help the non-financial personnel to look at finance from their own view point. Instead of learn finance from finance perspective, we learn our own perspective.

This is because your goal is to improve your current work not to become a qualified accountant. Crash courses usually can’t provide sufficient knowledge for you to understand finance.

Designed from business’s viewpoint, different from other approaches found in the market. Hopefully, we can equip non-financial personnel with business driven financial knowledge.

By end of the 8 presentation:
1. You can create your value to increase financial value
2. You can interpret financial reports to make decisions
3. You know how to work on budget
4.You can propose your ideas in terms of dollars & cents
5. You produce the financial numbers that your boss likes
6. You can communicate well with finance department
7. You make collaboration with accountant possible instead of just for the sake of formality

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Finance for non financial personnel - part 4

  1. 1. Finance For Non-Financial Personnel Part 4 Business Driven Finance Insights For Laymen Financial Reporting
  2. 2. £ ¥ € ₳ ₨$ The Structure of Finance For Non-Financial Personnel educational: free distribution Part 1 Part 2 Part 3 Part 4 Introduction and explain the importance of learning business driven finance Misconceptions - to describe the common misread of the laymen about the accounting department and it practise. Fundamentals of financial knowledge-set your perspective. Records - understand the principles that used in recording transactions & how your activities related to them. Very important but have been ignore by many. Reports- learn evaluate financial information, perform critical ratios analysis, and read different reports. From your perspective, how to use the reports in the best way. 8 presentations altogether, if you cannot find all the links, kindly email care@3cthinktank.com to request
  3. 3. £ ¥ € ₳ ₨$ FINANCIAL REPORTING educational: free distribution
  4. 4. £ ¥ € ₳ ₨$ Useful Report ARE ● Purposeful ● Design for Decision ● Good Information ● Well Presented educational: free distribution “Each report must come with a reason to meet a need.” “Learn how to design and prepare the required content in the report for correct decision to be made.”
  5. 5. £ ¥ € ₳ ₨$ Useful Report ARE ● Purposeful ● Design for Decision ● Good Information ● Well Presented educational: free distribution “Each report must come with a reason to meet a need.” “Learn how to design and prepare the required content in the report for correct decision to be made.” “timely; reliable; relevant; fit for purpose; cost; complete ” “arrange the sequence of good information to display well ” What if I don’t have perfect reports?
  6. 6. £ ¥ € ₳ ₨$ educational: free distribution Complete Piece of Information for Decision Making Objectives Strategies Impacts Financial & non- financial numbers Perceive Solely rely on financial information to make decision is dangerous Good Information: “timely; reliable; relevant; fit for purpose; cost; complete ”
  7. 7. £ ¥ € ₳ ₨$ Basic Report Structure ● Position ● Performance ● Ratio & Formula ● Comparison educational: free distribution “All these are time bounded to explain Past-Present-Future” “Look at position, see balances. (B/S)” “Look at performance, see cummulative numbers. (P/L)” ROI Cash Conversion Rate ROE NPV EVA Acid Test Profit Margin Contribution Margin (Net Income/ Sales) x (Sales/ Assets) x (Assets/ Equity)
  8. 8. £ ¥ € ₳ ₨$ Basic Report Structure ● Position ● Performance ● Ratio & Formula ● Comparison educational: free distribution “All these are time bounded to explain Past-Present-Future” “Look at position, see balances. (B/S)” “Look at performance, see cummulative numbers. (P/L)” “Focus on the purpose before generate ratio & formula” “Ratio & formula explain trends & relationships” “Comparison against time, place, industry, & items” ROI Cash Conversion Rate ROE NPV EVA Acid Test Profit Margin Contribution Margin (Net Income/ Sales) x (Sales/ Assets) x (Assets/ Equity) How to read all these?
  9. 9. £ ¥ € ₳ ₨$ ● Internal - Standard ● Internal - Specific ● External - Standard ● External - Specific educational: free distribution Types Of Reports Payment status Audited W eekly Managem ent Investment Evaluation SalesTrends Income Tax Payment Status Aging report Project P/L Cost Analysis reports “Internal refers to management reports which include periodic reports, MBE reports, and ad hoc specific reports” “Needs from corporate, business, and operation”
  10. 10. £ ¥ € ₳ ₨$ Types Of Reports ● Internal - Standard ● Internal - Specific ● External - Standard ● External - Specific educational: free distribution Types Of Reports Payment status Audited W eekly Managem ent Investment Evaluation SalesTrends Income Tax Payment Status Aging report Project P/L Cost Analysis reports “External reports usually based on GAAP and to meet government and regulatory requirements” “Standard applied to all or a specific group of companies” “Specific may due to any reason from bank, debtor, creditor” “Internal refers to management reports which include periodic reports, MBE reports, and ad hoc specific reports” “Needs from corporate, business, and operation” Why management reports different from GAAP?
  11. 11. £ ¥ € ₳ ₨$ How To Report ● Electronic ● Printed ● Explain By Someone ● Environment educational: free distribution “The reports can be presented and documented by electronic or/ and printed depend how you going to used it” “Documented reports can be approved and unapproved” One to Many Data modelling Dashboard Conference room Powerpoint PDF Excel Glossy Paper Drill Down One to One
  12. 12. £ ¥ € ₳ ₨$ How To Report ● Electronic ● Printed ● Explain By Someone ● Environment educational: free distribution “The reports can be presented and documented by electronic or/ and printed depend how you going to used it” “Documented reports can be approved and unapproved” “Some reports are self explained, others need explanation” “Example: in the management meeting the accountant explains the results presented in the financial reports One to Many Data modelling Dashboard Conference room Powerpoint PDF Excel Glossy Paper Drill Down One to One Why financial results are reported in many forms?
  13. 13. £ ¥ € ₳ ₨$ Use The Reports ● Diagnosis/ Review ● Estimate/ Modeling ● Control & Check ● Others educational: free distribution “With analytic skills to understand position, performance, & future for different purposes, example reaction to an offer” “Reports are future process for record or estimate” Track Progress Industry Grading Apply Grants Competition ApplyLoans Estimation Income Tax Appraisal Planning To Make A Decision
  14. 14. £ ¥ € ₳ ₨$ Use The Reports ● Diagnosis/ Review ● Estimate/ Modeling ● Control & Check ● Others educational: free distribution “With analytic skills to understand position, performance, & future for different purposes, example reaction to an offer” “Reports are further process for record/ estimate/ modeling” “Like bankers, to use reports to evaluate credit standing” “Track status, work in progress, cash flow management” “For statutory reporting, performance appraisal, etc” Track Progress Industry Grading Apply Grants Competition ApplyLoans Estimation Income Tax Appraisal Planning To Make A Decision Why the same data presented differently in different reports?
  15. 15. £ ¥ € ₳ ₨$ ● Know How To Read Report ● See “Complete Piece of Information” ● Can Read Not Equal To Can Interpret (Techniques) ○ Top-down or other directions ○ Tools for Interpretation ○ Scenarios; Framing; Position ○ Formula versus objective ○ 3 Levels Framework ○ Many More ... educational: free distribution Reports Interpreting Skills You interpret or guess?
  16. 16. £ ¥ € ₳ ₨$ ● You know whether the report is useful or not ● You understand the basic structure of the financial report ● You know different types of reports ● You know & why how the reports are presented ● Not just can read, you can interpret educational: free distribution Are You On Track? Look For Next Presentation: Finance For Non-Financial Personnel - Part 5
  17. 17. £ ¥ € ₳ ₨$ educational: free distribution care@3cthinktank.com 3CTT is a management consultant who advise and run projects for holistic business solutions, usually end-to-end, to improve business and make achievements. They cover all business functions with unique IT enhancements to increase companies’ competitive advantages, maximizing revenue, liquidity, & profit while designing highly effective organization. We had been recognised by many as Trusted Advisor, Growth Driver, Turnaround Expert, Exceptional Motivator, Strategist, Business Designer, and Dynamic Change Agent For more information: www.3cthinktank.com 8 presentations altogether, if you cannot find all the links, kindly email care@3cthinktank.com to request All the 8 presentations are the overview, PLEASE email us if you like to get more benefits from them.

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