Finance for non financial personnel - part 4

Finance For Non-Financial Personnel Part 4
Business Driven Finance Insights For Laymen
Financial
Reporting

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The Structure of Finance
For Non-Financial Personnel
educational: free distribution
Part 1
Part 2
Part 3
Part 4
Introduction and explain the importance of
learning business driven finance
Misconceptions - to describe the common misread of the
laymen about the accounting department and it practise.
Fundamentals of financial knowledge-set your perspective.
Records - understand the principles that used in
recording transactions & how your activities related to
them. Very important but have been ignore by many.
Reports- learn evaluate financial information, perform
critical ratios analysis, and read different reports. From
your perspective, how to use the reports in the best way.
8 presentations altogether, if you cannot find all the links, kindly email care@3cthinktank.com to request

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$
FINANCIAL
REPORTING

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$
Useful Report ARE
● Purposeful
● Design for Decision
● Good Information
● Well Presented
“Each report must come with a reason to meet a need.”
“Learn how to design and prepare the required content in
the report for correct decision to be made.”

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$
Useful Report ARE
● Purposeful
● Design for Decision
● Good Information
● Well Presented
“Each report must come with a reason to meet a need.”
“Learn how to design and prepare the required content in
the report for correct decision to be made.”
“timely; reliable; relevant; fit for purpose; cost; complete ”
“arrange the sequence of good information to display well ”
What if I
don’t have
perfect
reports?

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$
Complete Piece of Information
for Decision Making
Objectives
Strategies
Impacts
Financial & non-
financial numbers
Perceive
Solely rely on financial information
to make decision is dangerous
Good Information: “timely; reliable; relevant; fit for purpose; cost; complete ”

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Basic Report Structure
● Position
● Performance
● Ratio & Formula
● Comparison
“All these are time bounded to explain Past-Present-Future”
“Look at position, see balances. (B/S)”
“Look at performance, see cummulative numbers. (P/L)”
ROI
Cash
Conversion
Rate
ROE
N
P
V
EVA Acid
Test
Profit
Margin
Contribution
Margin
(Net Income/ Sales)
x (Sales/ Assets) x
(Assets/ Equity)

£ ¥ € ₳ ₨
$
Basic Report Structure
● Position
● Performance
● Ratio & Formula
● Comparison
“All these are time bounded to explain Past-Present-Future”
“Look at position, see balances. (B/S)”
“Look at performance, see cummulative numbers. (P/L)”
“Focus on the purpose before generate ratio & formula”
“Ratio & formula explain trends & relationships”
“Comparison against time, place, industry, & items”
ROI
Cash
Conversion
Rate
ROE
N
P
V
EVA Acid
Test
Profit
Margin
Contribution
Margin
(Net Income/ Sales)
x (Sales/ Assets) x
(Assets/ Equity)
How to read
all these?

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$
● Internal - Standard
● Internal - Specific
● External - Standard
● External - Specific
Types Of Reports
Payment status
Audited
W
eekly
Managem
ent
Investment
Evaluation
S
a
l
e
s
T
r
e
n
d
s
Income Tax
Payment
Status
Aging
report
Project P/L
Cost Analysis
reports
“Internal refers to management reports which include periodic
reports, MBE reports, and ad hoc specific reports”
“Needs from corporate, business, and operation”

£ ¥ € ₳ ₨
$
Types Of Reports
● Internal - Standard
● Internal - Specific
● External - Standard
● External - Specific
Types Of Reports
Payment status
Audited
W
eekly
Managem
ent
Investment
Evaluation
S
a
l
e
s
T
r
e
n
d
s
Income Tax
Payment
Status
Aging
report
Project P/L
Cost Analysis
reports
“External reports usually based on GAAP and to meet
government and regulatory requirements”
“Standard applied to all or a specific group of companies”
“Specific may due to any reason from bank, debtor, creditor”
“Internal refers to management reports which include periodic
reports, MBE reports, and ad hoc specific reports”
“Needs from corporate, business, and operation”
Why management
reports different
from GAAP?

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$
How To Report
● Electronic
● Printed
● Explain By Someone
● Environment
“The reports can be presented and documented by electronic
or/ and printed depend how you going to used it”
“Documented reports can be approved and unapproved”
One to Many
Data
modelling
Dashboard
Conference
room
P
o
w
e
r
p
o
i
n
t
PDF
Excel
Glossy
Paper
Drill Down
One to One

£ ¥ € ₳ ₨
$
How To Report
● Electronic
● Printed
● Explain By Someone
● Environment
“The reports can be presented and documented by electronic
or/ and printed depend how you going to used it”
“Documented reports can be approved and unapproved”
“Some reports are self explained, others need explanation”
“Example: in the management meeting the accountant
explains the results presented in the financial reports
One to Many
Data
modelling
Dashboard
Conference
room
P
o
w
e
r
p
o
i
n
t
PDF
Excel
Glossy
Paper
Drill Down
One to One
Why financial
results are
reported in
many forms?

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$
Use The Reports
● Diagnosis/ Review
● Estimate/ Modeling
● Control & Check
● Others
“With analytic skills to understand position, performance, &
future for different purposes, example reaction to an offer”
“Reports are future process for record or estimate”
Track Progress
Industry
Grading
Apply
Grants
Competition
A
p
p
l
y
L
o
a
n
s
Estimation Income
Tax
Appraisal
Planning
To Make A
Decision

£ ¥ € ₳ ₨
$
Use The Reports
● Diagnosis/ Review
● Estimate/ Modeling
● Control & Check
● Others
“With analytic skills to understand position, performance, &
future for different purposes, example reaction to an offer”
“Reports are further process for record/ estimate/ modeling”
“Like bankers, to use reports to evaluate credit standing”
“Track status, work in progress, cash flow management”
“For statutory reporting, performance appraisal, etc”
Track Progress
Industry
Grading
Apply
Grants
Competition
A
p
p
l
y
L
o
a
n
s
Estimation Income
Tax
Appraisal
Planning
To Make A
Decision
Why the same data
presented differently
in different reports?

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$
● Know How To Read Report
● See “Complete Piece of
Information”
● Can Read Not Equal To
Can Interpret (Techniques)
○ Top-down or other directions
○ Tools for Interpretation
○ Scenarios; Framing; Position
○ Formula versus objective
○ 3 Levels Framework
○ Many More ...
Reports Interpreting Skills
You
interpret
or guess?

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$
● You know whether the report is useful or not
● You understand the basic structure of the financial report
● You know different types of reports
● You know & why how the reports are presented
● Not just can read, you can interpret
Are You On Track?
Look For Next Presentation:
Finance For Non-Financial
Personnel - Part 5

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$
care@3cthinktank.com
3CTT is a management consultant who advise and run projects for holistic business solutions,
usually end-to-end, to improve business and make achievements. They cover all business
functions with unique IT enhancements to increase companies’ competitive advantages,
maximizing revenue, liquidity, & profit while designing highly effective organization.
We had been recognised by many as Trusted Advisor, Growth Driver, Turnaround Expert,
Exceptional Motivator, Strategist, Business Designer, and Dynamic Change Agent
For more information: www.3cthinktank.com
8 presentations altogether, if you cannot find all the links, kindly email care@3cthinktank.com to request
All the 8 presentations are the overview, PLEASE
email us if you like to get more benefits from them.

Finance for non financial personnel - part 4

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Finance for non financial personnel - part 4