This document discusses a new technique for nonprofit organizations to separately report capital and operating revenue in their financial statements in order to provide more transparency. Under the current reporting standards, capital is often mixed in with operating revenue, obscuring the true financial performance and health of the organization. The proposed technique separates capital from revenue to show how capital is being used to fund planned deficits as an organization undergoes changes. It also allows organizations and funders to track progress toward the goal of achieving net operating revenue. The document provides examples of how the capital and operating revenue would be reported separately using this new technique.
The document provides an overview of finance for non-financial managers. It discusses why understanding finance is important for career advancement and insight into business. The document outlines key financial statements including the income statement, balance sheet, and cash flow statement and how to analyze them. It also covers financial health checks, reading annual reports, key financial management decisions, and cost accounting tools for decision making such as break even analysis.
Overview of working capital management ppt @ bec doms bagalkot mba finaceBabasab Patil
This document provides an overview of key concepts in working capital management. It discusses how working capital is defined, the fundamental decisions around managing current assets, and the tradeoffs between liquidity, profitability and risk at different levels of current assets. It also covers classifying working capital components as permanent or temporary, and approaches to financing current assets, including hedging short-term needs with short-term financing and long-term assets with long-term financing. The optimal level of current assets balances these factors and varies inversely with profitability but directly with liquidity and risk.
Strategic Financial Management (SFM) examines how strategic and financial analysis can be integrated to create practical value. SFM looks at links between corporate strategy and financial management, managing for value, strategic management accounting, strategic and financial planning, and key applications like strategic investment decisions and acquisitions. Implementing SFM requires analyzing the links between strategy and finance, examining strategic options through both strategic choice and financial evaluation, and aligning organizational structure, resource allocation, and change management with strategic goals and financial performance.
Financial management concerns decisions about acquiring, financing, and managing assets to achieve goals. It involves investment decisions about what assets to hold, financing decisions about how to pay for assets, and asset management decisions about efficient use of assets. The primary objectives are maximizing profits, returns, and shareholder wealth through decisions that consider factors like the firm's size, risk level, and the economic environment.
This document discusses ratio analysis and its uses. Ratio analysis involves calculating and interpreting various financial ratios to evaluate aspects of a company's performance like profitability, liquidity, efficiency, and financial stability. The document outlines different types of ratios including profitability ratios like gross profit margin, net profit margin and return on assets. It also discusses liquidity ratios like current ratio and quick ratio. Finally, it covers finance structure ratios such as debt-equity ratio and debt ratio that measure a company's use of leverage. Specific examples and interpretations of these ratios are provided for a sample company over several years.
The document discusses concepts related to the time value of money, including:
1) Compounding and discounting cash flows to adjust for differences in timing using interest rates. Compounding calculates future values while discounting calculates present values.
2) Key time value of money calculations like future value, present value, net present value, and internal rate of return which are important financial metrics.
3) Examples are provided to demonstrate calculating future values, present values, and internal rates of return using formulas and Excel functions.
This chapter discusses techniques for forecasting a company's financial requirements, including funds flow analysis and financial forecasting. Funds flow analysis examines changes in working capital and cash flows over time using balance sheets and income statements. There are long-term and short-term funds cycles. Financial forecasting predicts future performance using techniques like trend analysis, relationships between variables, and tying individual forecasts into comprehensive financial statements like income statements, balance sheets, and cash flow forecasts. Forecasts are based on both objective data analysis and subjective judgment in assumptions.
1. Councils face severe long-term financial challenges due to reduced income from central government and increased demand for services.
2. Good financial management is essential for councils to deliver services and steward taxpayer money effectively during this difficult time. It involves taking a long-term approach to planning rather than just focusing on the short-term.
3. By managing for the long-term instead of just predicting the future, councils can plan for unavoidable changes, prevent undesirable outcomes, and control what they can to position themselves as well as possible for reduced funding.
The document provides an overview of finance for non-financial managers. It discusses why understanding finance is important for career advancement and insight into business. The document outlines key financial statements including the income statement, balance sheet, and cash flow statement and how to analyze them. It also covers financial health checks, reading annual reports, key financial management decisions, and cost accounting tools for decision making such as break even analysis.
Overview of working capital management ppt @ bec doms bagalkot mba finaceBabasab Patil
This document provides an overview of key concepts in working capital management. It discusses how working capital is defined, the fundamental decisions around managing current assets, and the tradeoffs between liquidity, profitability and risk at different levels of current assets. It also covers classifying working capital components as permanent or temporary, and approaches to financing current assets, including hedging short-term needs with short-term financing and long-term assets with long-term financing. The optimal level of current assets balances these factors and varies inversely with profitability but directly with liquidity and risk.
Strategic Financial Management (SFM) examines how strategic and financial analysis can be integrated to create practical value. SFM looks at links between corporate strategy and financial management, managing for value, strategic management accounting, strategic and financial planning, and key applications like strategic investment decisions and acquisitions. Implementing SFM requires analyzing the links between strategy and finance, examining strategic options through both strategic choice and financial evaluation, and aligning organizational structure, resource allocation, and change management with strategic goals and financial performance.
Financial management concerns decisions about acquiring, financing, and managing assets to achieve goals. It involves investment decisions about what assets to hold, financing decisions about how to pay for assets, and asset management decisions about efficient use of assets. The primary objectives are maximizing profits, returns, and shareholder wealth through decisions that consider factors like the firm's size, risk level, and the economic environment.
This document discusses ratio analysis and its uses. Ratio analysis involves calculating and interpreting various financial ratios to evaluate aspects of a company's performance like profitability, liquidity, efficiency, and financial stability. The document outlines different types of ratios including profitability ratios like gross profit margin, net profit margin and return on assets. It also discusses liquidity ratios like current ratio and quick ratio. Finally, it covers finance structure ratios such as debt-equity ratio and debt ratio that measure a company's use of leverage. Specific examples and interpretations of these ratios are provided for a sample company over several years.
The document discusses concepts related to the time value of money, including:
1) Compounding and discounting cash flows to adjust for differences in timing using interest rates. Compounding calculates future values while discounting calculates present values.
2) Key time value of money calculations like future value, present value, net present value, and internal rate of return which are important financial metrics.
3) Examples are provided to demonstrate calculating future values, present values, and internal rates of return using formulas and Excel functions.
This chapter discusses techniques for forecasting a company's financial requirements, including funds flow analysis and financial forecasting. Funds flow analysis examines changes in working capital and cash flows over time using balance sheets and income statements. There are long-term and short-term funds cycles. Financial forecasting predicts future performance using techniques like trend analysis, relationships between variables, and tying individual forecasts into comprehensive financial statements like income statements, balance sheets, and cash flow forecasts. Forecasts are based on both objective data analysis and subjective judgment in assumptions.
1. Councils face severe long-term financial challenges due to reduced income from central government and increased demand for services.
2. Good financial management is essential for councils to deliver services and steward taxpayer money effectively during this difficult time. It involves taking a long-term approach to planning rather than just focusing on the short-term.
3. By managing for the long-term instead of just predicting the future, councils can plan for unavoidable changes, prevent undesirable outcomes, and control what they can to position themselves as well as possible for reduced funding.
A beginners’ Guide for Financial Statements.
What are the financial statements?
Why financial statements are important?
Types of financial statements? And what is the basic purpose of each financial statement?
Financial Statements are the financial documents providing significant information about the financial activities of the business entity.
This document outlines what constitutes Financial Analysis to study a company's Balance Sheet, Profit and Loss accounts, Cash Flow Statements. It also provides guidance to do Ratio Analysis.
The document discusses financial evaluation methods for analyzing decision alternatives. It defines key terms like investment costs, cost of capital, discounted cash flow analysis, and presents examples. The objectives of financial evaluation are to array and quantify expected results by comparing investment costs to financial benefits. Common metrics used are net present value, benefit-cost ratio, payback period, and internal rate of return.
The document discusses various aspects of financial management including scope, objectives, sources of funds, investment decisions, dividend decisions, liquidity management, and capital budgeting. The key objectives of financial management are to maximize shareholder value and profit through efficient planning, financing, investing, monitoring, and control. A finance manager is responsible for raising capital through equity, debt, and bank loans; making prudent investment decisions using methods like net present value; and ensuring adequate liquidity and working capital. Capital budgeting involves generating, analyzing, selecting, executing, and reviewing investment projects using both non-discounting and discounted cash flow methods.
This document presents a fund flow statement example for ABC Ltd. between 2006 and 2007.
Key points:
- A fund flow statement shows changes in funds between two balance sheet dates by listing sources and applications of funds.
- For ABC Ltd., sources of funds included taking a mortgage, redeeming bonds, and funds from operations. Applications included purchasing fixed assets and increasing working capital.
- A statement of changes in working capital and adjusted profit and loss account were also prepared to determine the increase in working capital and funds from operations.
- The completed fund flow statement for ABC Ltd. balanced sources of funds totalling Rs. 75,000 with applications of funds.
The document discusses working capital management. It defines key concepts like working capital, current assets, and liquidity. It analyzes different policies for managing current asset levels and their impact on liquidity, profitability, and risk. Specifically, it finds that greater current asset levels increase liquidity but decrease profitability while lower levels have the reverse impact and increase risk. The document also covers classifying working capital components and financing current assets using either a short-term or long-term approach.
Here are the journal entries for the events:
a. Buildings +212.0
Equipment +30.4
Cash - 43.2
Notes payable (long-term) +199.2
b. Cash +186.6
Contributed capital +186.6
c. Retained earnings -121.4
Dividends payable +121.4
d. Cash +45.2
Accounts receivable +45.2
e. Accounts payable -37.8
Cash -37.8
Req. 2
The accounting equation remains in balance after each transaction.
Assets = Liabilities + Stockholders' Equity
Buildings +212.
The document discusses the role of finance in strategic planning and implementation. It states that the success of a strategy depends on three factors: alignment with the external environment, an accurate view of internal competencies, and careful implementation. It outlines the strategic planning process and notes that finance establishes financial goals and metrics based on benchmarks. Finance ensures the availability of capital, provides analysis for decisions, and monitors performance. Finance functions should be aligned with strategy through tools like balanced scorecards and budgets that reflect strategic initiatives.
Financial statement analysis by BIJAY KUMAR SHAWbijaykumarshaw
This document discusses financial statement analysis. It defines financial statements as presenting a periodic view of a company's financial progress and status. Financial statements are used by shareholders, creditors, stock exchanges, bankers, management, investors, and governments. Financial statement analysis studies the relationships between financial factors disclosed in statements and trends over time. It can be done externally by outsiders without company access or internally by management. The objectives are to understand the company, identify strengths and weaknesses, check fund movements, measure efficiency, and assess growth potential for comparison. Limitations include relying on user intentions, ignoring qualitative factors, and only using historical data. Common techniques discussed are comparative statements, common size statements, and trend analysis.
This document discusses liquidity and working capital analysis. It defines key terms like liquidity, current assets, current liabilities, and working capital. It then discusses various liquidity ratios used to analyze companies, including the current ratio, quick ratio, and cash ratio. It also discusses analyzing operating activities through accounts receivable and inventory turnover ratios. Additional liquidity measures like financial flexibility and cash flow analysis are covered. The document concludes by discussing analyzing a company's capital structure, earnings coverage, and overall solvency.
The document discusses key aspects of financial management for entrepreneurs and businesses. It outlines the objectives of financial management as providing needed funds for business operations under favorable terms and ensuring effective utilization of funds. It also describes various functions of financial management including finance services, control, and financial analysis. Financial analysis involves calculating ratios to evaluate working capital, profitability, capital structure, short-term and long-term creditors. The knowledgeable entrepreneur recognizes that financial accounting is based on past transactions while much of their work involves planning for the future.
This document provides an overview of financial statement analysis. It defines key terms and outlines the major components of analyzing a company's financial statements, including:
- Understanding basic financial statements (balance sheet, income statement) and key ratios
- Analyzing liquidity, leverage, coverage, activity, and profitability ratios
- Comparing ratios internally over time and externally to industry benchmarks
- Evaluating trends to identify potential issues, like high inventory levels reducing Basket Wonders' acid-test ratio
The document uses Basket Wonders as an example, presenting sample financial statements and calculating ratios to demonstrate the analysis process. The goal of analysis is to evaluate a company's financial health and make recommendations to improve performance.
1. Accounting is defined as recording, classifying and summarizing transactions and events in terms of money. It conveys a company's financial performance and position to stakeholders through financial statements.
2. The prudence principle, also called conservatism, means anticipating no profits but providing for all possible losses to avoid inflating profits. Secret reserves are not permitted.
3. Grouping means putting similar balance sheet items under common headings, while marshaling refers to the order assets and liabilities are shown, either by liquidity or permanence.
Financial management concerns decision-making regarding asset size, composition, financing levels, and structure. Objectives provide a framework for right financial decisions and guide investment, financing, and dividend decisions. Common objectives are profit maximization and wealth maximization.
Profit maximization aims to increase profits and avoid decreasing profits. However, it is an ambiguous criterion that ignores risk, timing of benefits, and quality of profits.
Wealth maximization, also called value or net present value maximization, addresses the limitations of profit maximization. It uses precise cash flows rather than accounting profits, and incorporates risk, timing of benefits, and the time value of money to determine the worth of financial decisions. We
1. The funds flow statement shows the sources and applications of funds during a specific period of time. It indicates where funds came from and where they were used.
2. Sources of funds include internal sources like profits and external sources like issuance of shares or debentures. Applications of funds include losses, repayment of loans, purchase of assets, and payment of dividends.
3. The cash flow statement differs from the funds flow statement in that it only deals with cash and cash equivalents, showing the inflows and outflows of cash from operating, investing and financing activities.
This document provides an introduction to analyzing financial statements. It defines financial statement analysis and outlines the key types of financial statements - the income statement and balance sheet. It describes the purpose and main components of each statement. The document also discusses the need for financial statement analysis, including to evaluate operational and financial performance, forecast future prospects, and support decision making. The scope of financial statement analysis is outlined as being limited to recorded financial data and subject to accounting conventions, judgments, and postulates.
This document discusses capital budgeting. It begins by defining capital expenditure and explaining that firms carefully analyze potential investment projects through a process called capital budgeting. Capital budgeting involves employing capital to maximize long-term profitability. The document then outlines the key features and steps involved in capital budgeting. It explains the importance of capital budgeting decisions for firms and some limitations to the capital budgeting process. Finally, it discusses different types of investment decisions that fall under capital budgeting.
This document provides an overview and review of key concepts from Chapter 5 of Kieso's Intermediate Accounting textbook, which discusses the balance sheet and statement of cash flows. The chapter presents the mechanics of preparing the balance sheet and cash flow statement, including classifying assets, liabilities, equity, and disclosing relevant information. It also explains the usefulness and limitations of the balance sheet and cash flow statement for assessing a company's liquidity, solvency, and financial flexibility. The document concludes with a discussion of supplemental disclosures, techniques for disclosure, and terminology used in financial statements.
1) The document discusses working capital management strategies and how they can impact return on capital employed (ROCE). It analyzes data from annual working capital surveys.
2) While a shorter cash conversion cycle should theoretically increase ROCE by reducing capital tied up, the survey data does not show a clear relationship between changes in the cash conversion cycle and changes in ROCE.
3) The document then examines a company that has seasonal demand and discusses strategies for maintaining flexible working capital levels to maximize equity value across seasons while balancing cash availability and opportunity costs.
The document discusses free cash flow (FCF) estimation and valuation techniques. It provides equations and considerations for calculating key line items in the FCF statement, including EBITDA, taxes, capital expenditures, and changes in net working capital. The document also discusses estimating the final value and terminal growth rate, and analyzing key performance indicators to inform projections. An example FCF statement is provided for a European industrial company from 2011-2016 and the final valuation year to demonstrate the calculations.
This document provides a primer on financial statements and how accountants measure key elements like assets, earnings, and liabilities. It explains that financial statements provide some but not all of the information needed for analysis and fall short in timeliness and measurement. Key accounting principles are outlined, such as accrual accounting and categorizing expenses. Issues with accounting measurements, such as treatment of R&D costs, are also discussed.
A beginners’ Guide for Financial Statements.
What are the financial statements?
Why financial statements are important?
Types of financial statements? And what is the basic purpose of each financial statement?
Financial Statements are the financial documents providing significant information about the financial activities of the business entity.
This document outlines what constitutes Financial Analysis to study a company's Balance Sheet, Profit and Loss accounts, Cash Flow Statements. It also provides guidance to do Ratio Analysis.
The document discusses financial evaluation methods for analyzing decision alternatives. It defines key terms like investment costs, cost of capital, discounted cash flow analysis, and presents examples. The objectives of financial evaluation are to array and quantify expected results by comparing investment costs to financial benefits. Common metrics used are net present value, benefit-cost ratio, payback period, and internal rate of return.
The document discusses various aspects of financial management including scope, objectives, sources of funds, investment decisions, dividend decisions, liquidity management, and capital budgeting. The key objectives of financial management are to maximize shareholder value and profit through efficient planning, financing, investing, monitoring, and control. A finance manager is responsible for raising capital through equity, debt, and bank loans; making prudent investment decisions using methods like net present value; and ensuring adequate liquidity and working capital. Capital budgeting involves generating, analyzing, selecting, executing, and reviewing investment projects using both non-discounting and discounted cash flow methods.
This document presents a fund flow statement example for ABC Ltd. between 2006 and 2007.
Key points:
- A fund flow statement shows changes in funds between two balance sheet dates by listing sources and applications of funds.
- For ABC Ltd., sources of funds included taking a mortgage, redeeming bonds, and funds from operations. Applications included purchasing fixed assets and increasing working capital.
- A statement of changes in working capital and adjusted profit and loss account were also prepared to determine the increase in working capital and funds from operations.
- The completed fund flow statement for ABC Ltd. balanced sources of funds totalling Rs. 75,000 with applications of funds.
The document discusses working capital management. It defines key concepts like working capital, current assets, and liquidity. It analyzes different policies for managing current asset levels and their impact on liquidity, profitability, and risk. Specifically, it finds that greater current asset levels increase liquidity but decrease profitability while lower levels have the reverse impact and increase risk. The document also covers classifying working capital components and financing current assets using either a short-term or long-term approach.
Here are the journal entries for the events:
a. Buildings +212.0
Equipment +30.4
Cash - 43.2
Notes payable (long-term) +199.2
b. Cash +186.6
Contributed capital +186.6
c. Retained earnings -121.4
Dividends payable +121.4
d. Cash +45.2
Accounts receivable +45.2
e. Accounts payable -37.8
Cash -37.8
Req. 2
The accounting equation remains in balance after each transaction.
Assets = Liabilities + Stockholders' Equity
Buildings +212.
The document discusses the role of finance in strategic planning and implementation. It states that the success of a strategy depends on three factors: alignment with the external environment, an accurate view of internal competencies, and careful implementation. It outlines the strategic planning process and notes that finance establishes financial goals and metrics based on benchmarks. Finance ensures the availability of capital, provides analysis for decisions, and monitors performance. Finance functions should be aligned with strategy through tools like balanced scorecards and budgets that reflect strategic initiatives.
Financial statement analysis by BIJAY KUMAR SHAWbijaykumarshaw
This document discusses financial statement analysis. It defines financial statements as presenting a periodic view of a company's financial progress and status. Financial statements are used by shareholders, creditors, stock exchanges, bankers, management, investors, and governments. Financial statement analysis studies the relationships between financial factors disclosed in statements and trends over time. It can be done externally by outsiders without company access or internally by management. The objectives are to understand the company, identify strengths and weaknesses, check fund movements, measure efficiency, and assess growth potential for comparison. Limitations include relying on user intentions, ignoring qualitative factors, and only using historical data. Common techniques discussed are comparative statements, common size statements, and trend analysis.
This document discusses liquidity and working capital analysis. It defines key terms like liquidity, current assets, current liabilities, and working capital. It then discusses various liquidity ratios used to analyze companies, including the current ratio, quick ratio, and cash ratio. It also discusses analyzing operating activities through accounts receivable and inventory turnover ratios. Additional liquidity measures like financial flexibility and cash flow analysis are covered. The document concludes by discussing analyzing a company's capital structure, earnings coverage, and overall solvency.
The document discusses key aspects of financial management for entrepreneurs and businesses. It outlines the objectives of financial management as providing needed funds for business operations under favorable terms and ensuring effective utilization of funds. It also describes various functions of financial management including finance services, control, and financial analysis. Financial analysis involves calculating ratios to evaluate working capital, profitability, capital structure, short-term and long-term creditors. The knowledgeable entrepreneur recognizes that financial accounting is based on past transactions while much of their work involves planning for the future.
This document provides an overview of financial statement analysis. It defines key terms and outlines the major components of analyzing a company's financial statements, including:
- Understanding basic financial statements (balance sheet, income statement) and key ratios
- Analyzing liquidity, leverage, coverage, activity, and profitability ratios
- Comparing ratios internally over time and externally to industry benchmarks
- Evaluating trends to identify potential issues, like high inventory levels reducing Basket Wonders' acid-test ratio
The document uses Basket Wonders as an example, presenting sample financial statements and calculating ratios to demonstrate the analysis process. The goal of analysis is to evaluate a company's financial health and make recommendations to improve performance.
1. Accounting is defined as recording, classifying and summarizing transactions and events in terms of money. It conveys a company's financial performance and position to stakeholders through financial statements.
2. The prudence principle, also called conservatism, means anticipating no profits but providing for all possible losses to avoid inflating profits. Secret reserves are not permitted.
3. Grouping means putting similar balance sheet items under common headings, while marshaling refers to the order assets and liabilities are shown, either by liquidity or permanence.
Financial management concerns decision-making regarding asset size, composition, financing levels, and structure. Objectives provide a framework for right financial decisions and guide investment, financing, and dividend decisions. Common objectives are profit maximization and wealth maximization.
Profit maximization aims to increase profits and avoid decreasing profits. However, it is an ambiguous criterion that ignores risk, timing of benefits, and quality of profits.
Wealth maximization, also called value or net present value maximization, addresses the limitations of profit maximization. It uses precise cash flows rather than accounting profits, and incorporates risk, timing of benefits, and the time value of money to determine the worth of financial decisions. We
1. The funds flow statement shows the sources and applications of funds during a specific period of time. It indicates where funds came from and where they were used.
2. Sources of funds include internal sources like profits and external sources like issuance of shares or debentures. Applications of funds include losses, repayment of loans, purchase of assets, and payment of dividends.
3. The cash flow statement differs from the funds flow statement in that it only deals with cash and cash equivalents, showing the inflows and outflows of cash from operating, investing and financing activities.
This document provides an introduction to analyzing financial statements. It defines financial statement analysis and outlines the key types of financial statements - the income statement and balance sheet. It describes the purpose and main components of each statement. The document also discusses the need for financial statement analysis, including to evaluate operational and financial performance, forecast future prospects, and support decision making. The scope of financial statement analysis is outlined as being limited to recorded financial data and subject to accounting conventions, judgments, and postulates.
This document discusses capital budgeting. It begins by defining capital expenditure and explaining that firms carefully analyze potential investment projects through a process called capital budgeting. Capital budgeting involves employing capital to maximize long-term profitability. The document then outlines the key features and steps involved in capital budgeting. It explains the importance of capital budgeting decisions for firms and some limitations to the capital budgeting process. Finally, it discusses different types of investment decisions that fall under capital budgeting.
This document provides an overview and review of key concepts from Chapter 5 of Kieso's Intermediate Accounting textbook, which discusses the balance sheet and statement of cash flows. The chapter presents the mechanics of preparing the balance sheet and cash flow statement, including classifying assets, liabilities, equity, and disclosing relevant information. It also explains the usefulness and limitations of the balance sheet and cash flow statement for assessing a company's liquidity, solvency, and financial flexibility. The document concludes with a discussion of supplemental disclosures, techniques for disclosure, and terminology used in financial statements.
1) The document discusses working capital management strategies and how they can impact return on capital employed (ROCE). It analyzes data from annual working capital surveys.
2) While a shorter cash conversion cycle should theoretically increase ROCE by reducing capital tied up, the survey data does not show a clear relationship between changes in the cash conversion cycle and changes in ROCE.
3) The document then examines a company that has seasonal demand and discusses strategies for maintaining flexible working capital levels to maximize equity value across seasons while balancing cash availability and opportunity costs.
The document discusses free cash flow (FCF) estimation and valuation techniques. It provides equations and considerations for calculating key line items in the FCF statement, including EBITDA, taxes, capital expenditures, and changes in net working capital. The document also discusses estimating the final value and terminal growth rate, and analyzing key performance indicators to inform projections. An example FCF statement is provided for a European industrial company from 2011-2016 and the final valuation year to demonstrate the calculations.
This document provides a primer on financial statements and how accountants measure key elements like assets, earnings, and liabilities. It explains that financial statements provide some but not all of the information needed for analysis and fall short in timeliness and measurement. Key accounting principles are outlined, such as accrual accounting and categorizing expenses. Issues with accounting measurements, such as treatment of R&D costs, are also discussed.
Third Quarter 2012 Investor PresentationCNOServices
3Q12 results reflect management's successful recapitalization which lowered CNO's cost of capital while maintaining strong capital ratios. Significant progress was also made on resolving the OCB litigation.
CNO's businesses continued to perform well with core earnings building. Investments were made to strengthen distribution and product offerings.
Capital and liquidity remained strong after deploying $455 million to reduce diluted shares by 15% YTD. Metrics like RBC ratio and debt to capital excluding AOCI remained high.
This document provides information about cash flow statements, including how they are prepared and their importance. It discusses:
- Cash flow statements show cash receipts, payments, and changes in cash balance over a period of time, usually quarterly or annually. They show how a company generates and uses cash.
- The key difference between a cash flow statement and funds flow statement is that cash flow statements only consider cash, while funds flow statements use a broader definition of funds that includes current assets and liabilities.
- Cash flow statements are important for short-term financial planning as they show if a company will have enough cash to pay debts, dividends, and maintain operations. They also allow comparison of a company's
Running head: Finance 1
Finance 2
Finance 5
Finance
Capital structure refers to how a company finances its general operations and expansion projection by utilizing various sources of funding. A company could normally have debt capital or equity as a composition of its capital structure (Bierman, H. 2003). Debt capital is usually composed of bonds issued or either, long term notes that are payable by the company whereas equity capital consists of shares (common stock) or retained earnings by the company. Furthermore, equity capital consists of common stock, preference stock and the retained earnings and these make up the total owners equity as recorded in the balance sheet. However, most analysts define the debt part in the capital structure as the long-term liability of the firm (Riahi-Belkaoui, A. 1999). The basic aim of optimizing capital structure is to select that proportion of various forms of debts and equities that maximizes the firm’s value while minimizing the average cost of capital. A firm should always yearn to optimize its capital structure because this will boost its effectiveness in the various operations in the market.
The balance sheet of a company is very key to any investor wishing to put an investment in a particular company and too to the managers in attempting to enhance shareholders wealth. In making this consideration, the health of the balance sheet is the front key to making this decision (Bierman, H. 2003). For instance, in making this evaluation, investors study keenly the working capital adequacy, the asset performance and lastly the capital structure. The fittest capital structure of a company is that which contains more of equity than the debt capital. A company having more of its capital derived from debts is not at all healthy in light of most investor’s analysis. This however is not consistent with the optimal view on capital structure. Ideally there is usually an optimum capital structure that is desirable for all companies. This optimal capital structure is that one that consists of a reasonable optimum amount of debt and also an optimum amount of equity. In practice though, there do not exist a magic ratio of particular leverage that the company can be able to have in its composition (Riahi-Belkaoui, A. 1999). This is also supported by the fact that the debt to equity ratio is different based on the type of industry in which a company is operating, its business type and also importantly the stage in the company’s life cycle.
The table below shows the capital structure of KONE’s business with a comparative analysis of ...
1. Cash Flow statement
2. Permanent & Temporary Working Capital
3. Cash Flow and Common Size Statement
4. EOQ & Safety Stock
5. Return on Equity & Return on Capital Employed
Management of Working Capital- Britannia Industries Ltd.Nikita Jangid
The document discusses working capital and its management. It defines working capital as the capital required for financing day-to-day business operations. Shortage of working capital can cause business failures while sufficient working capital is important for business success and liquidity. The document also discusses different types of working capital like permanent working capital and temporary working capital. It outlines the goals of working capital management as ensuring sufficient cash flow and balancing current assets and liabilities. Key factors that determine working capital requirements include the nature of industry, sales volume, inventory and receivables turnover, and the production cycle.
The document discusses accounting standards issued by the Institute of Chartered Accountants of India (ICAI). It provides information on the Accounting Standards Board established by ICAI and its role in preparing accounting standards for proper recognition, measurement, treatment, presentation and disclosure of accounting transactions in financial statements of organizations. The document also covers the scope and objectives of various individual accounting standards.
ACC 371 Lecture 7Statement of Cash FlowsIntroductionGenerall.docxaryan532920
ACC 371 Lecture 7
Statement of Cash Flows
Introduction
Generally Accepted Accounting Principles (GAAP) typically evolves in practice, rather than being written and then followed. An example of this evolution is the financial statement called, the statement of cash flows. Managers and business owners often asked why their companies were profitable but did not have available cash, or had plenty of cash but were operating at a loss. In response to this need, accountants developed the statement of cash flows to explain how cash was provided to the company or used by the company. The statement of cash flows is now a required financial statement according to GAAP. Since the statement of cash flows was developed long after the other three statements—the balance sheet, income statement, and statement of stockholders' equity—it does not follow the same flow as the other statements and requires information from all of the other statements, as well as additional information, in order to be compiled. Today, the statement of cash flows is one of the most significant financial statements for the potential investor or creditor.
Usefulness of the Statement of Cash Flows
The statement of cash flows is useful because it shows an organization's ability to produce future cash flows, provides an indication that the organization can meet its obligations, reports the differences between net income and net cash flows, and identifies the cash and noncash investing and financing activities during the period.
Profitable operations do not always ensure positive cash flow. While net income is important, cash flow is also critical to a company's success. Cash flow permits a company to expand operations, replace worn assets, take advantage of new investment opportunities, and pay dividends to its owners. Both managers and analysts need to understand the various sources and uses of cash that are associated with business activities.
The cash flow statement focuses attention on a firm's ability to generate cash internally, its management of current assets and current liabilities, and the details of its investments and its external financing (Libby, Libby, & Short, 2004). It is designed to help both managers and analysts answer important cash-related questions such as these:
Will the company have enough cash to pay its short-term debts to suppliers and other creditors without additional borrowing?
Is the company adequately managing its accounts receivable and inventory?
Has the company made necessary investments in new productive capacity?
Did the company generate enough cash flow internally to finance necessary investment or did it rely on external financing?
Is the company changing the makeup of its external financing?
These questions and others can be answered through the preparation and examination of the statement of cash flows.
Operating, Investing, and Financing Activities
The statement has three main sections: (a) cash flows from operating activities, which are relate.
This document defines accounting and financial reporting. It discusses the aims of accounting to manage and evaluate businesses. Financial accounting provides external information regulated by standards, while management accounting provides internal information. The key financial statements are the balance sheet, income statement, statement of cash flows and notes. Various formats are used to analyze trends, common sizes, liquidity, operations vs. finance, and classify expenses by nature vs function. Ratio analysis assesses performance through growth, solvency, liquidity and profitability ratios. Accounting rules and principles guide financial statement preparation and valuation.
This document defines accounting and financial reporting. It discusses:
1) Accounting measures and reports on business activities to provide useful information for managing and evaluating businesses. Financial accounting provides regulated external reporting, while management accounting provides internal reporting.
2) Financial statements like the balance sheet, income statement, and statement of cash flows are the key products of financial accounting. They show a business's financial performance and position.
3) Financial statement analysis examines these statements through methods like common size analysis, trend analysis, and reclassifying statement line items to calculate key metrics and ratios. This provides insights into a company's profitability, liquidity, and financial health.
The document provides an introduction to analyzing basic financial statements, including the cash flow statement, income statement, and balance sheet. It outlines the key components and metrics of each statement and discusses how to interpret various elements to analyze a company's profitability, liquidity, debt obligations, and overall financial health. The document is meant to serve as an overview for understanding and using financial statements to evaluate a business.
CNO Financial Group reported solid financial and operating results for the fourth quarter of 2011. Their businesses continued to perform well with earnings growth throughout 2011. Sales in the quarter grew 6% over the same period in 2010. The company's financial strength and credit profile also continued to improve, with statutory capital and risk-based capital increasing over 2011. CNO Financial will continue focusing on profitable organic growth by investing in agent recruiting, footprint expansion, and field management development.
Working capital represents a company's short-term operating liquidity and is calculated as current assets minus current liabilities. It indicates whether a company has sufficient short-term resources to meet upcoming operational expenses and debt obligations. Positive working capital is important to ensure companies can continue operating and meet near-term financial obligations. Managing working capital involves optimizing components like inventory, accounts receivable, payables, and cash to efficiently fund daily operations.
2012 Skills Based Summit - 3M, Understanding Cash Flow & Long Term Financial ...HOTC19
This document discusses cash flow and long term financial metrics. It begins by explaining why cash flow is important for ensuring a company's long-term viability and ability to make strategic investments. It then covers the statement of cash flows and its three sections - operating, investing, and financing activities. Finally, it discusses free cash flow and how companies can use it, as well as examples of long term financial metrics that can help companies assess whether they are achieving their strategic goals.
Ashford 5: - Week 4 - Instructor Guidance
"The statement of activities is the not-for-profit Organization’s version of an income statement. This statement shows revenues, expenses and realized and unrealized gains and losses for the not-for-profit organization. A not-for-profit Organization is different and unique from private for-profit entities in that is lacks the ‘Ownership’ attribute, which means they do not issue stock that can be bought, sold or traded (Marsh & Fischer, 2011). Because of the nature of revenue from donations, which have strings attached sometimes, it is required that changes in net assets be reported by class. The different classes are, Temporarily Restricted, Permanently Restricted and Unrestricted (Williams, 1996). This requirement is a part of the Financial Accounting Standards Board (FASB) Pronouncement 117 (FAS-117) which was passed in 1993. The financials of NFP organizations have to report in compliance with FAS-117 in order to adhere to Generally Accepted Accounting Principles, or GAAP.
The Statement of Activities is one of three required financial statements that must be prepared by not-for-profit organizations. The other two statements are the Statement of Financial Position and the Statement of Cash Flows. The statement of activities also ties to the statement of financial position. The change in net assets shown on the statement of activities can be added to the balance of assets at the beginning of the year, and should match the total net assets figure at the end of the year shown in the statement of financial position.
A statement of activities is supposed to clearly show changes in net assets by category. The Permanently Restricted category is for endowments that are required to be held in perpetuity. Income from restricted assets can usually be used for general operations and is classified as additions to unrestricted assets. Temporarily restricted funds can be conditionally restricted or time restricted. This means if someone donates to a NFP organization with the provision that the money be used for a specific purpose, such as capital expenditures, these funds are restricted until the condition has been met. Some donations are restricted by time, for example, money donated to be used for operations in 2016 would be temporarily restricted and cannot be used until that time. At the time the condition, or restriction has been satisfied, the assets are then re-classified, increasing unrestricted assets and decreasing temporarily restricted assets. The statement of activities shows movement of funds from class to class over a period of time (Finkler, Purtell, Calabrese, & Smith, 2013).
The statement of activities was introduced as a requirement for NFP organizations to make their reporting uniform in a way that outside users can understand financials of different NFPs and to make them comparable. This statement is also useful for internal budgeting purposes so that entities know what mon ...
This document discusses the overreliance on EBITDA as a measure of firm profitability and valuation. It explores how EBITDA fails to accurately reflect real operating costs like recurring working capital needs and capital expenditures. While EBITDA was rarely used before the 1980s leveraged buyout boom, its use expanded as it inflated valuations and debt capacity. However, EBITDA does not correlate with cash flow for most firms as it does not account for important expenses. The document concludes that more thorough analysis is needed beyond EBITDA to determine a firm's fair valuation.
The survey found that nonprofit organizations continue to struggle with increased demand for services due to the lingering effects of the recession and ongoing funding cuts. While some organizations have recovered from the worst impacts, over 85% reported higher demand for services since 2008. Many organizations are unable to meet this growing need as funding has not kept pace. The sector remains stretched thin and feels disconnected from funders and boards. Government funding, which nearly half of respondents rely on, has been unreliable with frequent payment delays, exacerbating financial challenges for nonprofits.
Organizations that can clearly and accurately articulate their financial story and resource needs are better positioned to make a strong case for support. In both good times and bad, your stakeholders will be more engaged if you can provide a data-driven assessment that links your nonprofit’s financial health to its impact and accomplishments. This can inform strategic planning and guide leadership in making mission driven, financially sound decisions.
We've created a worksheet divided into six core areas of nonprofit finance, described in detail in the document:
Revenue
Expenses
Probability and Savings
Health of the Balance Sheet
Liquidity
Financial Planning
Use the worksheet to capture a snapshot of your nonprofit’s strengths and weaknesses. Together, these areas help you balance the three critical components essential to your organization’s long-term viability: Mission, Capacity, and Capital.
This document discusses Pay for Success bonds as a new approach to social program funding. It begins by describing traditional government funding which allocates money to different agencies for various programs without knowing which are truly effective. Pay for Success bonds allow private investors to fund social service providers upfront, and the government only pays if the programs achieve pre-agreed outcomes. This addresses issues of scaling effective approaches and shifting funds based on results. However, there are also challenges around complexity, measurability, and political will. Overall, Pay for Success bonds aim to leverage private capital to expand programs that work, while only spending public money when objectives are met.
The document discusses a new technique for nonprofit financial reporting that separates capital funding from operating revenue. Under the conventional reporting method, capital is treated as regular revenue, obscuring the organization's true operating picture. The proposed method reports capital separately from revenue to show whether capital investments are resulting in increased revenue to cover ongoing costs. It recommends presenting capital releases separately below the change in net assets line for improved transparency. This allows leaders and funders to assess progress toward financial sustainability goals.
This document discusses the need for improved capitalization practices in arts organizations to help them thrive financially and artistically. Most arts nonprofits are "mis-capitalized," meaning they lack the right types and amounts of capital at the right times to support innovation, growth, and artistic excellence. The Leading for the Future initiative aims to address this issue by providing "change capital" grants to 10 arts organizations to help them adapt their programming, operations, and finances in sustainable ways. Principles of improved capitalization could strengthen the field if adopted more broadly by nonprofits and funders.
Pay for Success Projects and Social Impact Bonds: Structuring Considerations ...Nonprofit Finance Fund
In NFF's first SIB e-vent, we held a live web chat exploring the challenges and opportunities of SIB and their potential to develop in the US marketplace. In this second e-vent, experts from The Young Foundation (UK), the Centre for Social Impact (New South Wales), and NFF discussed:
1. What SIB models exist for risk sharing and rewards incentives
2. How other countries have come to determine the right SIB structures for their transactions
3. Initial implications for structuring SIBs/Pay for Success projects in the United States
See this and other resources, including the recording of the live webinar at our Social Impact Bond discussion group, which is free for anyone to join here: http://nonprofitfinancefund.org/sib
This document discusses how grantmakers can use balance sheets to assess the financial risk faced by arts organizations. It explains that balance sheets reveal an organization's liquidity, adaptability, and durability. The author analyzes the sample balance sheet of a theater company to demonstrate how to evaluate these factors. Key points include cash availability, reserves, debt obligations, and calculating financial ratios like months of liquid net assets. Analyzing balance sheets along with income statements over time can provide useful insights into an organization's financial stability and needs.
The document provides a methodology statement for the Nonprofit Finance Fund's 2011 survey of nonprofit professionals. The survey asked about financial experiences in 2010 and expectations for 2011. It was conducted online between January and February 2011, receiving 1,935 responses. The survey targeted nonprofit managers nationwide through email lists, social media, and regional networks. It contained 32 questions on demographics, finances, revenue sources, and financial/programmatic actions. Results are available aggregated and by sector, geography or other characteristics, but are not statistically weighted.
On the Boards (OtB), a contemporary performance arts organization in Seattle, faced financial struggles after purchasing and renovating a new performance space. Through the Mid-sized Presenting Organizations Initiative funded by the Doris Duke Charitable Foundation, OtB received guidance from the Nonprofit Finance Fund (NFF) over four years. With NFF's help, OtB established operating and building reserve funds, retired all long-term debt, and received a grant to establish an endowment. As a result, OtB strengthened its financial position and long-term sustainability.
This document provides tips for making nonprofit facilities more energy efficient and environmentally sustainable. Some key recommendations include sealing cracks and leaks around windows, doors, and other areas to reduce energy loss, installing programmable thermostats and HVAC filters, replacing old windows with more efficient double-pane windows, installing outdoor shading and planting deciduous trees for shade, and changing lighting to more efficient bulbs and utilizing light-colored paint to reflect existing light. Implementing these low-cost changes can help nonprofits reduce utility bills and maintenance costs while creating a healthier environment.
Telling Your School’s Story through Your Financial Statements: A Lender’s Poi...Nonprofit Finance Fund
This document discusses how charter school financial statements help tell potential lenders the story of a school's past, present, and future financial situation when applying for loans. It outlines the key factors lenders evaluate, including the school's financial systems, historical financial statements like income statements and balance sheets, and forward-looking statements like budgets, cash flow projections, and income statement projections. Being able to clearly articulate the school's financial story through these documents is important for obtaining a loan.
hopeFound: Finding the Way Through Data, Discipline & Dialogue (case study)Nonprofit Finance Fund
hopeFound: Finding the Way Through Data, Discipline & Dialogue
Measuring impact is an ongoing challenge that all nonprofits-- including NFF--are always thinking about. With the multitude of factors that tangle the trajectory from service delivery to long-term outcomes, impact is often a complex picture that doesn't immediately unfold in hard numbers.
Recently, however, we had the chance follow up on an amazing story of long-term impact with hopeFound, a nonprofit dedicated to preventing and ending homelessness in the greater Boston area. hopeFound came to NFF in 2005, in the midst of some serious financial challenges that were posing a threat to the critical services they offer to the community.
Using five years of hopeFound's financial data, we performed a complete business analysis to shed light on their financial situation and provide a road map towards improved organizational health. hopeFound used NFF's findings to transform into a sustainable nonprofit achieving more impact than ever before. Now, a little over 5 years later, hopeFound engaged NFF to perform a second business analysis to clarify their 10-year trajectory of success and help shape a plan for the future.
So how did hopeFound achieve this transformation, and what can all nonprofits learn from this story? Check out the case study below to see how hopeFound combined effective data collection, disciplined planning and decision-making, and transparent communication to take control of their organization's future.
Anjali Deshmukh, Marketing and Communications Manager
The nonprofit organization anticipated a negative economic impact but was able to improve its financial situation through careful cost cutting and program restructuring rather than reducing services. It implemented new expenditure tracking and made afterschool programs more affordable. Increased fundraising, improved operations, and new procurement policies allowed them to add to reserves. Provided these approaches continue, programming should be more sustainable in the future.
Top mailing list providers in the USA.pptxJeremyPeirce1
Discover the top mailing list providers in the USA, offering targeted lists, segmentation, and analytics to optimize your marketing campaigns and drive engagement.
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To implement a CRM for real estate, set clear goals, choose a CRM with key real estate features, and customize it to your needs. Migrate your data, train your team, and use automation to save time. Monitor performance, ensure data security, and use the CRM to enhance marketing. Regularly check its effectiveness to improve your business.
Zodiac Signs and Food Preferences_ What Your Sign Says About Your Tastemy Pandit
Know what your zodiac sign says about your taste in food! Explore how the 12 zodiac signs influence your culinary preferences with insights from MyPandit. Dive into astrology and flavors!
[To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
This PowerPoint compilation offers a comprehensive overview of 20 leading innovation management frameworks and methodologies, selected for their broad applicability across various industries and organizational contexts. These frameworks are valuable resources for a wide range of users, including business professionals, educators, and consultants.
Each framework is presented with visually engaging diagrams and templates, ensuring the content is both informative and appealing. While this compilation is thorough, please note that the slides are intended as supplementary resources and may not be sufficient for standalone instructional purposes.
This compilation is ideal for anyone looking to enhance their understanding of innovation management and drive meaningful change within their organization. Whether you aim to improve product development processes, enhance customer experiences, or drive digital transformation, these frameworks offer valuable insights and tools to help you achieve your goals.
INCLUDED FRAMEWORKS/MODELS:
1. Stanford’s Design Thinking
2. IDEO’s Human-Centered Design
3. Strategyzer’s Business Model Innovation
4. Lean Startup Methodology
5. Agile Innovation Framework
6. Doblin’s Ten Types of Innovation
7. McKinsey’s Three Horizons of Growth
8. Customer Journey Map
9. Christensen’s Disruptive Innovation Theory
10. Blue Ocean Strategy
11. Strategyn’s Jobs-To-Be-Done (JTBD) Framework with Job Map
12. Design Sprint Framework
13. The Double Diamond
14. Lean Six Sigma DMAIC
15. TRIZ Problem-Solving Framework
16. Edward de Bono’s Six Thinking Hats
17. Stage-Gate Model
18. Toyota’s Six Steps of Kaizen
19. Microsoft’s Digital Transformation Framework
20. Design for Six Sigma (DFSS)
To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations
Anny Serafina Love - Letter of Recommendation by Kellen Harkins, MS.AnnySerafinaLove
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In this keynote, Luan Wise will provide invaluable insights to elevate your employer brand on social media platforms including LinkedIn, Facebook, Instagram, X (formerly Twitter) and TikTok. You'll learn how compelling content can authentically showcase your company culture, values, and employee experiences to support your talent acquisition and retention objectives. Additionally, you'll understand the power of employee advocacy to amplify reach and engagement – helping to position your organization as an employer of choice in today's competitive talent landscape.
B2B payments are rapidly changing. Find out the 5 key questions you need to be asking yourself to be sure you are mastering B2B payments today. Learn more at www.BlueSnap.com.
Brian Fitzsimmons on the Business Strategy and Content Flywheel of Barstool S...Neil Horowitz
On episode 272 of the Digital and Social Media Sports Podcast, Neil chatted with Brian Fitzsimmons, Director of Licensing and Business Development for Barstool Sports.
What follows is a collection of snippets from the podcast. To hear the full interview and more, check out the podcast on all podcast platforms and at www.dsmsports.net
Taurus Zodiac Sign: Unveiling the Traits, Dates, and Horoscope Insights of th...my Pandit
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Every industrial revolution has created a new set of categories and a new set of players.
Multiple new technologies have emerged, but Samsara and C3.ai are only two companies which have gone public so far.
Manufacturing startups constitute the largest pipeline share of unicorns and IPO candidates in the SF Bay Area, and software startups dominate in Germany.
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Case for Capital Accounting
1. Case for Capital
Financial Reporting Done Right
®
By Rebecca Thomas and Rodney Christopher
In The Case for Change Capital in the Arts, Nonprofit Finance that true revenue cannot cover. Separating capital flows tells
Fund discusses the broad needs for and uses of capital in a more accurate story of core operations by pulling away the
the arts. We share how ten performing arts organizations obscuring effects of capital.
are applying one form of capital — change capital — to
realize their artistic and organizational ambitions. We outline The good news is that nonprofit managers can address
core principles and practices that can improve all types of this commingling and conflation by making straightforward
capitalization in the sector but that will require changes in adjustments for capital in financial reports. When properly
behavior by both nonprofits and funders alike. discussed with an auditor, this presentation is compliant
with Generally Accepted Accounting Principles; management
One necessary change is to improve the transparency can adopt this treatment for internal reporting regardless of
around how organizations manage their capital resources whether it makes the adjustment to audited financials.
by segregating capital from revenue in financial statements.
Conventional nonprofit accounting and reporting allow for the When reporting on the raising and expenditure of change
treatment of revenue and capital as the same. The problem is capital specifically, this technique provides critical clarity
that when capital and revenue are conflated, an organization’s about how an organization is progressing against its plan
reports show an overly optimistic picture of operating health. to adapt in ways that are viable over the long term. The
Organizations that have had capital campaigns for facility technique allows an organization’s leadership and funders to
projects are familiar with this situation: the capital is often answer the questions:
treated as regular revenue, while the expenditures on fixed
assets show up on the balance sheet (they are not operating Are the capital investments we are making resulting in
expenses), leading to the communication of an inflated revenue that progressively covers ongoing costs?
financial performance. Do we have enough capital to realize the desired
change?
As periodic and extraordinary infusions, capital of all kinds If not, how much more do we need to raise?
should be managed and accounted for separately.
While NFF is increasingly seeing audits and internal Among the central characteristics of change capital is that
documents that separate capital from revenue, they remain its deployment should improve an organization’s net revenue
the exception. As a result, users of financial information (i.e., revenue minus expenses). Therefore, it is important
(whether nonprofit leaders, boards or funders) may be making that organizations and investors have access to financial
important decisions based on unintentionally misleading projections and reports that show clearly the proposed and
data. In too many cases, organizations are using their actual progress toward the achievement of net revenue.
incomplete financial reports to justify increased expenses