The three balance sheet accounts are assets, liabilities, and equity. Assets are things owned that will provide future benefits, like land, buildings, vehicles, equipment, and cash. Liabilities are debts owed, like loans. Equity represents the portion of assets owned outright without debt, and is calculated by subtracting total liabilities from total assets. Income increases assets and equity, while expenses decrease equity. Understanding these key accounting concepts provides the foundation for properly managing finances.
Cash management techniques help businesses efficiently manage cash inflows and outflows. Some key techniques include budgeting to reduce expenses, investing excess cash, using credit judiciously, and generating additional income. Businesses can also use physical cash management services, electronic funds transfer, controlled disbursement of checks, sweep accounts to maximize interest, and cash concentration. Choosing the appropriate combination of techniques from banks can optimize a business's cash management.
The document discusses financial planning and pitching for startups. It provides guidance on creating a financial plan to understand funding needs and describe the vision to partners and investors. It also explains that the purpose of pitching is to generate interest for follow up conversations, as investors rarely provide funding solely based on a pitch. The document then gives suggestions on what financial information to include in a pitch, such as market size, costs, funding requirements, and profitability projections. It also warns against unrealistic assumptions and provides too much detail.
‘Cash is king’ – a concept fundamentally important for businesses to understand – was the key theme that the speaker, Mr. Benny Chan, Senior Vice President of DBS SME Banking, stressed on. Benny spoke about the function of cash as the “lifeblood of the business” and as a safety net for unexpected financial situations.
He gave an in-depth explanation of the cash conversion cycle, providing business owners with a clearer understanding of how loans can assist businesses to cover financing gaps created by shortfalls in operating cash flow. Without cash, a business’ suppliers and creditors cannot be repaid, and owners face the danger of debts overwhelming the business. He also shared concrete steps that a business can take to improve its cash flow position.
Simple ideas on Cashflow management for beginnersYC Lim
This document provides an overview of cashflow management and its importance for financial freedom. It discusses budgeting income and expenses, paying oneself first through savings, managing loans and credit cards, and starting the process through reviewing finances, prioritizing spending, and increasing financial knowledge over time. The goal of cashflow management is to live below one's means in order to achieve financial independence and security for retirement as costs rise over the decades.
The newsletter provides articles on financial topics like cash flow management, planning retirement withdrawals, understanding credit reports, and paying off debt. It also includes tax tips, QuickBooks tips, and financial planning tips. The document emphasizes the importance of cash flow for businesses and outlines key factors to analyze like accounts receivable, credit terms, inventory, and accounts payable to better manage cash flow. It also discusses the differences between profit and cash flow and highlights options for partial or full withdrawals from retirement plans.
This document discusses the concept of "net profit or loss", also known as the "bottom line", on financial statements. It explains that the bottom line is the amount remaining after total revenues are subtracted from total expenses. If revenues exceed expenses, it is a net profit, and if expenses exceed revenues, it is a net loss. The bottom line amount is reflected on both the income statement and the equity section of the balance sheet. The document also addresses questions about why an owner's draw from a sole proprietorship is not taxable income and how double taxation can be avoided in a corporation.
A guide to maximizing your business value through managing your cash flows in the best way.
Increasing the value of your business by hundreds of thousands of dollars.
Avoid common cash flow mistakes that destroy businesses.
All in 70 slides with straight forward and instantly applicable insights.
No need for reading a lengthy book or attending a long workshop.
Handbook for developing and refreshing your skills of cash management.
Cash management techniques help businesses efficiently manage cash inflows and outflows. Some key techniques include budgeting to reduce expenses, investing excess cash, using credit judiciously, and generating additional income. Businesses can also use physical cash management services, electronic funds transfer, controlled disbursement of checks, sweep accounts to maximize interest, and cash concentration. Choosing the appropriate combination of techniques from banks can optimize a business's cash management.
The document discusses financial planning and pitching for startups. It provides guidance on creating a financial plan to understand funding needs and describe the vision to partners and investors. It also explains that the purpose of pitching is to generate interest for follow up conversations, as investors rarely provide funding solely based on a pitch. The document then gives suggestions on what financial information to include in a pitch, such as market size, costs, funding requirements, and profitability projections. It also warns against unrealistic assumptions and provides too much detail.
‘Cash is king’ – a concept fundamentally important for businesses to understand – was the key theme that the speaker, Mr. Benny Chan, Senior Vice President of DBS SME Banking, stressed on. Benny spoke about the function of cash as the “lifeblood of the business” and as a safety net for unexpected financial situations.
He gave an in-depth explanation of the cash conversion cycle, providing business owners with a clearer understanding of how loans can assist businesses to cover financing gaps created by shortfalls in operating cash flow. Without cash, a business’ suppliers and creditors cannot be repaid, and owners face the danger of debts overwhelming the business. He also shared concrete steps that a business can take to improve its cash flow position.
Simple ideas on Cashflow management for beginnersYC Lim
This document provides an overview of cashflow management and its importance for financial freedom. It discusses budgeting income and expenses, paying oneself first through savings, managing loans and credit cards, and starting the process through reviewing finances, prioritizing spending, and increasing financial knowledge over time. The goal of cashflow management is to live below one's means in order to achieve financial independence and security for retirement as costs rise over the decades.
The newsletter provides articles on financial topics like cash flow management, planning retirement withdrawals, understanding credit reports, and paying off debt. It also includes tax tips, QuickBooks tips, and financial planning tips. The document emphasizes the importance of cash flow for businesses and outlines key factors to analyze like accounts receivable, credit terms, inventory, and accounts payable to better manage cash flow. It also discusses the differences between profit and cash flow and highlights options for partial or full withdrawals from retirement plans.
This document discusses the concept of "net profit or loss", also known as the "bottom line", on financial statements. It explains that the bottom line is the amount remaining after total revenues are subtracted from total expenses. If revenues exceed expenses, it is a net profit, and if expenses exceed revenues, it is a net loss. The bottom line amount is reflected on both the income statement and the equity section of the balance sheet. The document also addresses questions about why an owner's draw from a sole proprietorship is not taxable income and how double taxation can be avoided in a corporation.
A guide to maximizing your business value through managing your cash flows in the best way.
Increasing the value of your business by hundreds of thousands of dollars.
Avoid common cash flow mistakes that destroy businesses.
All in 70 slides with straight forward and instantly applicable insights.
No need for reading a lengthy book or attending a long workshop.
Handbook for developing and refreshing your skills of cash management.
The document provides strategies and tips for managing cash flow in a small business. It discusses developing a cash flow forecast to monitor incoming and outgoing money. Tips include getting cash in quickly from sales while slowing outflows, managing accounts receivable, inventory, and debt, and cutting expenses where possible. Regularly updating the cash flow forecast can help alert businesses before running out of money and improve effective management.
The document discusses cash management and cash flow for businesses. It defines cash and cash equivalents, and explains their importance for businesses. It also discusses how to forecast cash needs through budgets and planning for cash receipts and disbursements. Additionally, the document provides tips for managing cash flows, including increasing inflows and decreasing outflows, and strategies for handling cash shortages.
Fami save learn mutual funds financial administrators of the philippinespadre821
This document discusses various investing myths and tips for building a winning portfolio. It begins by debunking common myths such as the notion that higher risk or returns always translate to wealth. It emphasizes the importance of financial discipline and paying yourself first. The rest of the document provides information on mutual funds, including their advantages and how they can be used for different financial goals like retirement, education, or an emergency fund. It stresses starting early, knowing your objectives, and taking a long-term approach to achieve your investment goals.
Blake Lapthorn Thames Valley Pensions conference - 5 Dec 2012Blake Morgan
The document discusses a pensions conference agenda that covers topics such as pension liabilities, investment strategies, auto-enrollment duties and challenges, and the trustee perspective. It includes presentations on liability measurements, investment opportunities in low yield environments, communication strategies, and diversified growth funds. The document provides an agenda, speaker bios, and questions from previous conferences.
This document provides an overview of strategies for collecting accounts receivable. It discusses setting credit policies, managing the collection process through invoices, letters, and phone calls. It emphasizes the importance of defining customer lifetime value to understand how much can be spent to acquire new customers and retain existing ones. Effective collection strategies can significantly reduce bad debts. The document offers best practices for addressing angry customers and compliance in the collection process.
This document provides a concise guide to cash flow management for small businesses. It discusses the importance of cash flow and outlines key principles for managing cash flow, including actively monitoring cash inflows and outflows. The document also covers accelerating cash inflows through streamlining processes like customer ordering, credit decisions, fulfillment and invoicing. It emphasizes the importance of establishing a clear credit policy and checking customer creditworthiness to minimize risks.
The document provides tips for small businesses to improve cash flow management. It recommends extending payment terms and improving cash collection. It also suggests analyzing expenditures and forecasting cash flow regularly. Some key tips include keeping only key suppliers, paying suppliers on time, offering discounts for early payment, pursuing outstanding debts weekly, and ending relationships with customers with poor payment histories. The document stresses the importance of forecasting cash flow at least weekly and reviewing forecasts against bank statements to improve over time.
This document provides an agenda and learning objectives for a workshop on managing cash flow for small businesses. The workshop will use a case study of a coffee shop owner, Bob, who is facing some cash flow issues. Attendees will learn about cash flow management tools like balance sheets, cash flow diagrams, and cash flow statements. They will then discuss strategies Bob could implement to improve his cash flow, such as increasing sales, negotiating better supplier deals, and reducing costs during slow periods. The document emphasizes the importance of cash flow management and seeking expert advice from accountants.
The document discusses various aspects of accounts receivable management, including:
1) It defines accounts receivable turnover ratio and days sales outstanding as key metrics for evaluating receivables management.
2) It outlines two common methods for estimating uncollectible accounts - the percentage of net sales method and accounts receivable aging method.
3) It discusses options for financing receivables like factoring, securitization, and discounting notes receivable to obtain cash flows from receivables faster.
This document discusses cash flow management for businesses. It provides an overview of basic financial reports like the balance sheet, income statement, and statement of cash flows. It emphasizes the importance of cash flow planning and analysis, as many small businesses fail due to cash flow issues rather than lack of profitability. The key aspects of cash management covered are forecasting cash receipts and disbursements to create a cash budget, managing accounts receivable, accounts payable, and inventory levels to optimize cash flow. Strategies are provided for accelerating cash collection, negotiating payment terms, and avoiding cash shortages.
This document provides an overview of key concepts in financial management. It defines financial management as obtaining and utilizing funds for business operations. The goals of financial management include profit maximization, wealth maximization, liquidity, and financial discipline. The finance manager makes investment, financing, dividend, and working capital decisions. The finance manager plays both a traditional role in markets, institutions, and capital structure as well as a new role in mergers, taxes, costs, and technology. The document also discusses the Indian financial system and debates between profit maximization versus wealth maximization objectives.
Blake Lapthorn, Barings, Shilling and Barnett Waddingham's Southern Pensions ...Blake Morgan
'Blake Lapthorn solicitors Pensions team, along with Barings, Shilling and Barnett Waddingham held a Pensions conference in Blake Lapthorn's Southampton office on 22 November 2012. The conference was titled: Pensions - are we (anywhere near) there yet?
Choosing to save_power_point_presentation_1.14.1.g1b34farmer
The document provides guidance on saving and investing money. It discusses setting savings goals and evaluating the consequences of goals, including necessary trade-offs and opportunity costs. It emphasizes the importance of saving and investing for financial security and building wealth over time. Automatic transfers and payroll deductions are recommended to make saving and investing habits automatic. The overall message is that practicing smart saving and investing habits can help ensure financial well-being for one's future self.
Growth stage technology venture financing venture debt - dec 2010 - david l...Dave Litwiller
This document discusses venture debt, which provides secured debt financing to venture capital-backed companies. The main purposes of venture debt for growth-stage companies are to defer additional equity financing, build cash reserves, and act as a final bridge to self-sustaining cash flow. Venture lenders typically seek mid-to-high teens annual returns plus warrants. They contrast with venture capitalists, who seek higher returns but tolerate more failures. While venture capitalists generally do not provide debt to their portfolio companies directly due to conflicts, they may be okay with venture debt being involved. Key due diligence considerations for lenders include a company's execution track record and the likelihood of future equity financing.
Budgeting is an important process for both personal finances and business planning. It involves estimating revenues and expenses over a set period of time. For individuals, creating a budget helps gain control over spending, build savings, improve credit scores, and gain financial freedom. For businesses, budgeting aids in planning, coordination, allocating resources, and performance reviews. Overall, budgets provide a financial blueprint and guide for meeting financial goals.
The document discusses the importance of cash flow projections for managing finances and avoiding running out of cash. It explains that a cash flow projection looks ahead to see if there will be enough incoming cash to meet outgoing expenses. There are four components to a cash flow projection: beginning balance, incoming cash from operations/investments/financing, outgoing cash, and ending balance. Having a cash flow projection warns of potential cash flow problems in advance so businesses can take actions like reducing spending or increasing income to avoid running out of money.
Financial planning involves building wealth for retirement through various strategies across one's lifetime. These include superannuation from age 30-60+, wealth creation such as shares and property from age 30-60+, transition to retirement from age 50+, and life insurance and estate planning from age 25+. Financial planning also considers an individual's goals, values, risk tolerance, taxes, and emotions to develop an optimal strategy for successful retirement and tax-effective wealth creation.
Canadian small businesses are thriving, accounting for 98% of employer businesses in Canada. Entrepreneurship is on the rise as more people seek autonomy and flexibility in their careers. While the work can be challenging, most small business owners report being happier and more financially secure as a result of going out on their own. Cash flow management is a key concern for small businesses, as unexpected dips in revenue or growth can strain operations. Maintaining positive cash flow is critical for small business success and longevity.
The document provides guidance for startup founders on raising venture debt. It discusses when venture debt is appropriate, such as extending a company's cash runway or preventing a down round. Founders should avoid venture debt if they can't repay the loan or if the terms are too restrictive. Key terms to consider include loan size, duration, interest rate, and amortization schedule. Founders are advised to start with lower-cost bank loans before approaching venture debt funds and to delay drawing down funds to reduce costs. Consulting an experienced lawyer is also recommended when negotiating venture debt terms.
This document provides an introduction to basic accounting concepts. It begins by defining key terms like assets, liabilities, capital, and accounting periods. It then explains important accounting principles and financial statements, including accrual accounting, accounts receivable/payable, and the balance sheet, income statement, and statement of cash flows. The overall purpose is to familiarize readers with fundamental accounting vocabulary and practices.
The income statement shows a company's financial performance over a period of time, usually one year. It reports revenues and expenses. Gross profit is calculated as revenues minus cost of goods sold. Operating income excludes unusual non-operating expenses and aims to better indicate future income, though companies may classify expenses creatively. The income statement, like the balance sheet, follows accounting standards to concisely communicate financial information.
The document provides strategies and tips for managing cash flow in a small business. It discusses developing a cash flow forecast to monitor incoming and outgoing money. Tips include getting cash in quickly from sales while slowing outflows, managing accounts receivable, inventory, and debt, and cutting expenses where possible. Regularly updating the cash flow forecast can help alert businesses before running out of money and improve effective management.
The document discusses cash management and cash flow for businesses. It defines cash and cash equivalents, and explains their importance for businesses. It also discusses how to forecast cash needs through budgets and planning for cash receipts and disbursements. Additionally, the document provides tips for managing cash flows, including increasing inflows and decreasing outflows, and strategies for handling cash shortages.
Fami save learn mutual funds financial administrators of the philippinespadre821
This document discusses various investing myths and tips for building a winning portfolio. It begins by debunking common myths such as the notion that higher risk or returns always translate to wealth. It emphasizes the importance of financial discipline and paying yourself first. The rest of the document provides information on mutual funds, including their advantages and how they can be used for different financial goals like retirement, education, or an emergency fund. It stresses starting early, knowing your objectives, and taking a long-term approach to achieve your investment goals.
Blake Lapthorn Thames Valley Pensions conference - 5 Dec 2012Blake Morgan
The document discusses a pensions conference agenda that covers topics such as pension liabilities, investment strategies, auto-enrollment duties and challenges, and the trustee perspective. It includes presentations on liability measurements, investment opportunities in low yield environments, communication strategies, and diversified growth funds. The document provides an agenda, speaker bios, and questions from previous conferences.
This document provides an overview of strategies for collecting accounts receivable. It discusses setting credit policies, managing the collection process through invoices, letters, and phone calls. It emphasizes the importance of defining customer lifetime value to understand how much can be spent to acquire new customers and retain existing ones. Effective collection strategies can significantly reduce bad debts. The document offers best practices for addressing angry customers and compliance in the collection process.
This document provides a concise guide to cash flow management for small businesses. It discusses the importance of cash flow and outlines key principles for managing cash flow, including actively monitoring cash inflows and outflows. The document also covers accelerating cash inflows through streamlining processes like customer ordering, credit decisions, fulfillment and invoicing. It emphasizes the importance of establishing a clear credit policy and checking customer creditworthiness to minimize risks.
The document provides tips for small businesses to improve cash flow management. It recommends extending payment terms and improving cash collection. It also suggests analyzing expenditures and forecasting cash flow regularly. Some key tips include keeping only key suppliers, paying suppliers on time, offering discounts for early payment, pursuing outstanding debts weekly, and ending relationships with customers with poor payment histories. The document stresses the importance of forecasting cash flow at least weekly and reviewing forecasts against bank statements to improve over time.
This document provides an agenda and learning objectives for a workshop on managing cash flow for small businesses. The workshop will use a case study of a coffee shop owner, Bob, who is facing some cash flow issues. Attendees will learn about cash flow management tools like balance sheets, cash flow diagrams, and cash flow statements. They will then discuss strategies Bob could implement to improve his cash flow, such as increasing sales, negotiating better supplier deals, and reducing costs during slow periods. The document emphasizes the importance of cash flow management and seeking expert advice from accountants.
The document discusses various aspects of accounts receivable management, including:
1) It defines accounts receivable turnover ratio and days sales outstanding as key metrics for evaluating receivables management.
2) It outlines two common methods for estimating uncollectible accounts - the percentage of net sales method and accounts receivable aging method.
3) It discusses options for financing receivables like factoring, securitization, and discounting notes receivable to obtain cash flows from receivables faster.
This document discusses cash flow management for businesses. It provides an overview of basic financial reports like the balance sheet, income statement, and statement of cash flows. It emphasizes the importance of cash flow planning and analysis, as many small businesses fail due to cash flow issues rather than lack of profitability. The key aspects of cash management covered are forecasting cash receipts and disbursements to create a cash budget, managing accounts receivable, accounts payable, and inventory levels to optimize cash flow. Strategies are provided for accelerating cash collection, negotiating payment terms, and avoiding cash shortages.
This document provides an overview of key concepts in financial management. It defines financial management as obtaining and utilizing funds for business operations. The goals of financial management include profit maximization, wealth maximization, liquidity, and financial discipline. The finance manager makes investment, financing, dividend, and working capital decisions. The finance manager plays both a traditional role in markets, institutions, and capital structure as well as a new role in mergers, taxes, costs, and technology. The document also discusses the Indian financial system and debates between profit maximization versus wealth maximization objectives.
Blake Lapthorn, Barings, Shilling and Barnett Waddingham's Southern Pensions ...Blake Morgan
'Blake Lapthorn solicitors Pensions team, along with Barings, Shilling and Barnett Waddingham held a Pensions conference in Blake Lapthorn's Southampton office on 22 November 2012. The conference was titled: Pensions - are we (anywhere near) there yet?
Choosing to save_power_point_presentation_1.14.1.g1b34farmer
The document provides guidance on saving and investing money. It discusses setting savings goals and evaluating the consequences of goals, including necessary trade-offs and opportunity costs. It emphasizes the importance of saving and investing for financial security and building wealth over time. Automatic transfers and payroll deductions are recommended to make saving and investing habits automatic. The overall message is that practicing smart saving and investing habits can help ensure financial well-being for one's future self.
Growth stage technology venture financing venture debt - dec 2010 - david l...Dave Litwiller
This document discusses venture debt, which provides secured debt financing to venture capital-backed companies. The main purposes of venture debt for growth-stage companies are to defer additional equity financing, build cash reserves, and act as a final bridge to self-sustaining cash flow. Venture lenders typically seek mid-to-high teens annual returns plus warrants. They contrast with venture capitalists, who seek higher returns but tolerate more failures. While venture capitalists generally do not provide debt to their portfolio companies directly due to conflicts, they may be okay with venture debt being involved. Key due diligence considerations for lenders include a company's execution track record and the likelihood of future equity financing.
Budgeting is an important process for both personal finances and business planning. It involves estimating revenues and expenses over a set period of time. For individuals, creating a budget helps gain control over spending, build savings, improve credit scores, and gain financial freedom. For businesses, budgeting aids in planning, coordination, allocating resources, and performance reviews. Overall, budgets provide a financial blueprint and guide for meeting financial goals.
The document discusses the importance of cash flow projections for managing finances and avoiding running out of cash. It explains that a cash flow projection looks ahead to see if there will be enough incoming cash to meet outgoing expenses. There are four components to a cash flow projection: beginning balance, incoming cash from operations/investments/financing, outgoing cash, and ending balance. Having a cash flow projection warns of potential cash flow problems in advance so businesses can take actions like reducing spending or increasing income to avoid running out of money.
Financial planning involves building wealth for retirement through various strategies across one's lifetime. These include superannuation from age 30-60+, wealth creation such as shares and property from age 30-60+, transition to retirement from age 50+, and life insurance and estate planning from age 25+. Financial planning also considers an individual's goals, values, risk tolerance, taxes, and emotions to develop an optimal strategy for successful retirement and tax-effective wealth creation.
Canadian small businesses are thriving, accounting for 98% of employer businesses in Canada. Entrepreneurship is on the rise as more people seek autonomy and flexibility in their careers. While the work can be challenging, most small business owners report being happier and more financially secure as a result of going out on their own. Cash flow management is a key concern for small businesses, as unexpected dips in revenue or growth can strain operations. Maintaining positive cash flow is critical for small business success and longevity.
The document provides guidance for startup founders on raising venture debt. It discusses when venture debt is appropriate, such as extending a company's cash runway or preventing a down round. Founders should avoid venture debt if they can't repay the loan or if the terms are too restrictive. Key terms to consider include loan size, duration, interest rate, and amortization schedule. Founders are advised to start with lower-cost bank loans before approaching venture debt funds and to delay drawing down funds to reduce costs. Consulting an experienced lawyer is also recommended when negotiating venture debt terms.
This document provides an introduction to basic accounting concepts. It begins by defining key terms like assets, liabilities, capital, and accounting periods. It then explains important accounting principles and financial statements, including accrual accounting, accounts receivable/payable, and the balance sheet, income statement, and statement of cash flows. The overall purpose is to familiarize readers with fundamental accounting vocabulary and practices.
The income statement shows a company's financial performance over a period of time, usually one year. It reports revenues and expenses. Gross profit is calculated as revenues minus cost of goods sold. Operating income excludes unusual non-operating expenses and aims to better indicate future income, though companies may classify expenses creatively. The income statement, like the balance sheet, follows accounting standards to concisely communicate financial information.
This document summarizes a two-day credit training program. Day one covers why and how financials are used, understanding cash flow, and group exercises. Day two focuses on more group exercises, example clients, and a wrap-up session. The training aims to help participants understand how financial statements are used in lending decisions and analyze key components like balance sheets, income statements, cash flow, and more.
Here are the answers to the quiz questions:
1. Balance Sheet
2. Income Statement
3. The accounting equation - Assets = Liabilities + Owner's Equity
4. Revenue and Expense accounts
5. Balance Sheet and Statement of Cash Flows
6. Revenue, Expenses, Net Income
7. Balance Sheet
8. Stockholder's Equity or Shareholder's Equity
Financial statements include the balance sheet, income statement, and statement of cash flows. The balance sheet summarizes a company's financial position at a point in time by listing assets, liabilities, and equity. It uses the accounting equation that assets equal liabilities plus equity. The income statement summarizes revenues and expenses over a period of time to determine profit or loss. The statement of cash flows explains the changes in a company's cash balance due to operating, investing, and financing activities during a period.
The document discusses ratios that small business owners can use to evaluate the health of their business when applying for a bank loan. It recommends focusing on liquidity ratios like the current ratio and quick ratio, which measure a business's ability to meet short-term obligations, and the debt-to-equity ratio, which measures leverage. The document provides an example of calculating these ratios for a sample business using numbers from its balance sheet. The ratios calculated indicate the business has adequate liquidity and reasonable leverage, but the owner should also provide a narrative discussing additional details like growth plans, customers, and internal controls.
If you don't know the financials, you don't know the business. Financial statements are often an overlooked tool to better understand a business. Financial statements are essentially the scorecard of the business. If you can’t read the scorecard your business may be in jeopardy and you not even know it. Many business owners don’t understand the story they tell. This deck helps you understand the basic financial statements, the importance, steps of an analysis, ratios, and a quick valuation.
Cash refers to actual money received, while profit is revenue minus expenses. Cash flows into a business from customers and out in payments. Profit is what remains after all costs are paid and can be used for investments. Analyzing a company's cash flows is important because profitable firms can fail if they mismanage cash. Cash flows reflect actual changes in a company's cash, while profits are an accounting estimate. Calculating metrics like EBITDA provides a simpler view of cash flows than the full cash flow statement.
Finance for new treasurers draft aug 10Lisa Presley
The document provides information for new treasurers on their main responsibilities which include being the custodian of assets, keeping accurate records, financial reporting, and ensuring compliance with legal requirements. It discusses the key parts of a treasurer's job such as risk assessment, record keeping, preparing budgets and financial reports, and proper accounting of donations and minister compensation according to tax regulations.
The document provides an agenda for a two-day credit training seminar covering various topics related to understanding financial statements and their use in lending decisions. Day one includes sessions on cash flow, understanding financials, and group exercises. Day two focuses on more group exercises and examples of analyzing example client financial statements.
“Interpreting Financial Statements” by Philip DrakeMegan Calcote
This document provides an overview and introduction to understanding financial statements. It begins with an agenda that outlines topics to be covered including the accounting equation, financial statement relations, ratio analysis, and cash flow analysis. It then discusses key concepts like the accounting equation that balances assets with liabilities and equity. The three main financial statements are introduced as the balance sheet, income statement, and statement of cash flows. Common components of each statement are defined. The rest of the document discusses how financial statements link business decisions and valuation, and provides examples of analyzing elements like return on equity, working capital management, and cash-to-cash cycles.
Facilitator: Robbie Dircks, Associate Director & CFO, University of North Carolina Press
Panelists: Mike Bieker, Director, University of Arkansas Press; Dan Wackrow, Chief Financial and Operating Officer, Harvard University Press
The document provides an introduction to accounting. It defines accounting as a systematic process of recording, measuring, and communicating financial information. It discusses the accounting equation and balance sheet, which show that assets must equal liabilities plus equity. Assets represent what is owned, and liabilities and equity represent who owns the assets. Debits and credits are used to keep the accounting equation and balance sheet in balance. The document also outlines accounting standards, functions, history, and some common myths.
This document provides an overview of basic accounting concepts and principles. It explains the accounting equation that balances assets, liabilities, and owner's equity. It also describes the key financial statements of a balance sheet and profit and loss statement. The balance sheet presents the financial position at a point in time, while the profit and loss statement shows revenues, expenses and profits over a period. Additionally, it outlines the basics of double entry bookkeeping, ledger accounts, and how a trial balance can verify the accuracy of bookkeeping entries.
Financial accounting mgt101 power point slides lecture 05Abdul Wadood Ansary
This document discusses the classification of accounts and rules of debit and credit in accounting. It explains that accounts are classified as assets, liabilities, income, and expenses. Assets are resources owned, while liabilities are obligations to provide resources in the future. Income represents revenue earned, and expenses are costs incurred to generate income. The document then outlines the rules of debit and credit for increases and decreases in each type of account. For example, increases to assets are debited and decreases are credited.
LIQUIDITY OF COMPANY WHAT ARE THE STEPS TO BE TAKENjayjani123
Business liquidity is your ability to cover any short-term liabilities such as loans, staff wages, bills and taxes. Strong liquidity means there’s enough cash to pay off any debts that may arise.
All businesses will have assets which are highly liquid and ones which are not. Cash is the most liquid of all but other assets with high liquidity include shares or inventory provided you can sell it quickly.
My Business is Growing, Now What? Financial Management Skills for the Entrepr...McKonly & Asbury, LLP
The document discusses building successful employee relationships as a cornerstone to fraud prevention and risk management. It covers introducing David Blain and Michael Hoffner, partners at McKonly & Asbury, who will discuss financial management skills for entrepreneurs. They will focus on balance sheet management, cash flow management, why ratios are important, and developing long term value. Questions are welcomed at the end.
Accounting Steps to get your startup on trackFaith Audi
Accounting is a systematic way of keeping financial records that is important for businesses for several reasons: to gauge financial health, ensure savings, secure funding, and achieve goals. Some key accounting terms and concepts include assets, liabilities, income statements, and balance sheets. To properly account for a new business, one should open a bank account, track expenses, develop a bookkeeping system, set up a payroll system, determine tax obligations, and reevaluate methods as the business grows. Maintaining accurate financial records is essential for effective decision making and long-term success.
Excellence in financial management evaluating financial performanceasalmi4
This document provides an overview and examples of how to calculate and analyze key financial ratios to evaluate financial performance, including:
- Return on Equity measures earnings generated for shareholders' investment and is calculated as Net Income divided by Average Shareholders' Equity.
- Return on Equity has three components: Profit Margin, Asset Turnover, and Financial Leverage.
- Other ratios discussed include Current Ratio, Acid Test Ratio, Defensive Interval, ratios of operating cash flows to debt obligations, and asset management ratios like Accounts Receivable Turnover.
2. How you handle money is a reflection of your soul. Money is the great magnifier. It
simply magnifies that which is within you. If you’re a broken person, money will make
you more broken. If you’re a selfish person, money will make you more selfish. But if
deep within you, you’re good and humble and kind and generous and selfless and
disciplined, money will magnify all that fantastic stuff in you.
If you’re already rich on the inside—God doesn’t mind you being rich on the outside.
Because the Bible says, Let the Lord be magnified, who has pleasure in the
prosperity of His servant (Psalms 35:27).
May this presentation enlighten us how to control our finances by learning some
basic terms in accounting..
3. Unlocking of Difficult Terms
Accounting Equation
Balance Sheet Accounts
What is Asset?
What is Liability?
What is Equity?
Capital
Quiz
4. • Balance Sheet Accounts - used to track the changes in value of
things you own or owe.
• Assets– group of things that you own.
• Tangible– clear enough or definite enough to be easily seen, felt, or
noticed
• Intangible – abstract or is hard to define or measure
• Patent – an official right to be the only person or company allowed
to make or sell a new product for a certain period of time
• Liquidity - speed at which something can be converted into cash.
• Appreciate – increase of value
5. • Depreciate – lose of original value
• Liability – debt
• Debenture – type of savings bond which offers a fixed rate of
interest over a long period.
• Overdraft – spending money more than you have in a bank
• Equity - what is left over after you subtract your liabilities from your
assets
• Income – something that is earned or received
• Dividend – part of a company’s profits shared by its shareholders
• Expenses – money that something costs you
6. Unlocking of
Difficult Terms
Accounting
Equation
Assets, Liabilities, Equity, Income and Expenses
Balance Sheet
Accounts
What is
Asset?
What is
Liability?
What is Equity?
Income and
Expenses
QUIZ
Accounting Equation
(Assets - Liabilities = Equity + (Income - Expenses)
7. Unlocking of
Difficult Terms
Accounting
Equation
Balance Sheet
Accounts
- are used to track the changes in value of things you
own or owe.
What is
Asset?
What is
Liability?
What is Equity?
Income and
Expenses
QUIZ
The
three
so-called
Balance
Sheet
Accounts are Assets, Liabilities, and Equity.
8. Unlocking of
Difficult Terms
Accounting
Equation
Balance Sheet
Accounts
• possession of something that will
bring benefits in the future.
What is
Asset?
• group of things that you own
What is
Liability?
• anything that will add
value to your business.
What is Equity?
Income and
Expenses
QUIZ
future
10. Unlocking of
Difficult Terms
Accounting
Equation
Balance Sheet
Accounts
What is
Asset?
What is
Liability?
What is Equity?
Income and
Expenses
QUIZ
What is the test of whether
something is considered an asset
for your business? Well, one asks,
―Is the _______ something I own will
bring me benefits in the future?‖
11. If you owned the land, would it
be an asset for your business?
Not sure? Well, do you expect
to receive
benefits for your business in
the future from the land?
Of course. So what are the
benefits it will bring? Well, you
can construct a building on it that
you can use for business. Even
selling it would bring benefits, in
the form of cash.
12. How about a computer that you
own – is this an asset? Will it
bring you benefits in the future?
Well, amongst other things, you
can store and retrieve large
amounts of information and use
it to communicate with suppliers
and customers.
So yes, a computer
is certainly an asset.
13. What about a motor vehicle –
is this an asset? Does it
have benefits for your
business, and if so, what are
they?
Yes, there are benefits for
your business... You can use
the motor vehicle to pick up
and deliver goods. So yes,
this is also an asset.
14. What about cash? Is cash
an asset?
Cash is certainly an
asset.
What are the benefits of
having cash? Simple: you
can pay for things! That
is certainly useful (and
indeed essential) for a
business.
15. Unlocking of
Difficult Terms
Accounting
Equation
Balance Sheet
Accounts
What is
Asset?
What is
Liability?
What is Equity?
Income and
Expenses
QUIZ
Assets can be tangible or intangible.
Tangible assets are physical entities such as land,
buildings, vehicles, equipment, and inventory.
Intangible assets include Accounts Receivables,
patents, and contracts.
16. Unlocking of
Difficult Terms
Accounting
Equation
Assets are also grouped according to their liquidity, or the speed
at which they can be converted into cash.
Balance Sheet
Accounts
Current assets can be converted into cash in 12 months or less.
What is
Asset?
What is
Liability?
What is Equity?
Income and
Expenses
QUIZ
Non-Current/Fixed assets are tangible assets with a life span of
at least one year and usually longer. High-cost fixed assets such
as machinery and computer systems are not expensed, but their
value is depreciated, or "written off," over a number of years
according to one of several depreciation schedules.
17. Asset
Type of Asset
Benefits
Machine
Non-current
Used for the production of goods for
sale to customer.
Office Building
Non-current
Provides space to employees for
administering company affairs.
Vehicle
Non-current
Used in the transportation of company
products and also for commuting.
Inventory
Current
Cash is generated from the sale of
inventory.
Cash
Current
Used to pay any expenses
Receivables
Current
Will eventually result in inflow of cash.
18. Unlocking of
Difficult Terms
Accounting
Equation
Balance Sheet
Accounts
What is
Asset?
What is
Liability?
What is Equity?
Income and
Expenses
QUIZ
• A present
from past
expected
enterprise
benefits.
obligation of the enterprise arising
events, the settlement of which is
to result in an outflow from the
of resources embodying economic
• A debt of the business.
21. Unlocking of
Difficult Terms
Accounting
Equation
Balance Sheet
Accounts
What is
Asset?
What is
Liability?
What is Equity?
Income and
Expenses
QUIZ
TYPES OF LIABILITIES
• Current liabilities are debts that are paid in 12 months or less,
and consist mainly of monthly operating debts. Current liabilities
are usually paid with current assets, i.e. Cash. A
company's working capital is the difference between its current
assets and current liabilities. Managing short-term debt and
having adequate working capital is vital to a company's long-term
success.
• Long-term liabilities are typically mortgages or loans used to
purchase fixed assets, and are paid off in years instead of
months.
22. Liability
Long Term Bank Loan
Bank Overdraft
Short Term Bank Loan
Debenture
Tax Payable
Classification
Non-current
Current
Current
Non-current
Current
23.
24. Unlocking of
Difficult Terms
Accounting
Equation
Balance Sheet
Accounts
What is
Asset?
What is
Liability?
What is Equity?
Income and
Expenses
QUIZ
• is the same as "net worth." It represents
what is left over after you subtract your
liabilities from your assets. It can be
thought of as the portion of your assets
that you own outright, without any debt.
25. Unlocking of
Difficult Terms
Accounting
Equation
Balance Sheet
Accounts
What is
Asset?
What is
Liability?
What is Equity?
Income and
Expenses
QUIZ
• is of utmost importance to the business owner
because it is the owner's financial share of the
company. Worded another way, Equity is that
portion of the total assets of the company
that the owner fully owns. Equity may be in
assets such as buildings and equipment, or
cash.
26. Unlocking of
Difficult Terms
Accounting
Equation
For example, if you purchase a $30,000 vehicle with a
$25,000 loan and $5,000 in cash, you have acquired an
asset of $30,000, but have only $5,000 of equity.
Balance Sheet
Accounts
What is
Asset?
What is
Liability?
What is Equity?
Income and
Expenses
QUIZ
• We can see how this equation works with our
example: $30,000 Asset = $25,000 Liability + $5,000
Owner Equity.
27. Unlocking of
Difficult Terms
Accounting
Equation
Balance Sheet
Accounts
What is
Asset?
What is
Liability?
What is Equity?
Income and
Expenses
QUIZ
A ―net worth‖ statement or ―balance sheet‖ is designed
to provide you with a picture of the financial soundness
of your business at a specific point in time. Net worth
statements are often prepared at the beginning and
ending of the accounting period (i.e. January 1), but can
be done at any time.
28. Unlocking of
Difficult Terms
Accounting
Equation
Balance Sheet
Accounts
What is
Asset?
What is
Liability?
What is Equity?
Income and
Expenses
QUIZ
• is the payment you receive for your time, services
you provide, or the use of your money.
• will always increase the value of your Assets and
thus your Equity.
Examples:
Commissions, tips, dividend income from stocks,
and interest income from bank accounts
29. Unlocking of
Difficult Terms
Accounting
Equation
Balance Sheet
Accounts
• The term Capital has several meanings and it is used in
many business contexts. In general, capital is accumulated
assets or ownership. More specifically,
What is
Asset?
• Capital is the amount of cash and other assets owned by a
business. These business assets include accounts
receivable, equipment, and land/buildings of the business.
What is
Liability?
• Capital can also represent the accumulated wealth of a
business, represented by its assets less liabilities.
What is Equity?
Income and
Expenses
QUIZ
• Capital can also mean stock or ownership in a company.
30.
31. Unlocking of
Difficult Terms
Accounting
Equation
It is a possession of something that will bring benefits
in the future.
Balance Sheet
Accounts
What is
Asset?
Assets
Liability
What is
Liability?
What is Equity?
Income and
Expenses
QUIZ
Equity
Income
32. Unlocking of
Difficult Terms
Accounting
Equation
Balance Sheet
Accounts
What is
Asset?
What do you call the present obligation of the enterprise
arising from past events, the settlement of which is
expected to result in an outflow from the enterprise of
resources embodying economic benefits?
Assets
Liabilities
What is
Liability?
What is Equity?
Income and
Expenses
QUIZ
Net worth
Expenses
33. Unlocking of
Difficult Terms
Accounting
Equation
Balance Sheet
Accounts
What is
Asset?
What is
Liability?
It is the same as "net worth." It represents what is left over
after you subtract your liabilities from your assets. It can be
thought of as the portion of your assets that you own
outright, without any debt.
Expenses
Equity
Income
What is Equity?
Liability
Income and
Expenses
QUIZ
34. Unlocking of
Difficult Terms
Accounting
Equation
Balance Sheet
Accounts
What is
Asset?
What is
Liability?
What is Equity?
Income and
Expenses
QUIZ
It is the payment you receive for your time,
services you provide, or the use of your
money.
Income
Expenses
Asset
Liability
40. Unlocking of
Difficult Terms
Accounting
Equation
Balance Sheet
Accounts
What is
Asset?
What is
Liability?
What is Equity?
Income and
Expenses
QUIZ
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Created by: Celinmar B. Montes
www. gnucash.org
www. accounting-simplified.com
www.keynotesupport.com
http://www.accounting-basics-for-students.com
http://accesstocapital.com/what-is-capital/
http://biztaxlaw.about.com/od/glossaryc/g/capital.htm
NGAS Manual for Local Government Units and National
Government Agencies www.coa.gov.ph
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