This document provides an overview of key concepts in finance and financial management. It discusses the basics of financial management, understanding financial statements including the balance sheet, income statement, and cash flow statement. It also covers financial analysis and decision making, explaining various liquidity, profitability, and solvency ratios that can be used to analyze a company's financial health and make informed business decisions. The document emphasizes that financial analysis allows managers to make more accurate, precise decisions by reasonably understanding and analyzing financial statements.
This document provides an overview of cashflow, trade working capital, debt, and risk management for short, medium, and long-term forecasts. It discusses the methodology for short-term cashflow forecasts updated weekly, medium-term forecasts covering 12-24 months, and long-term strategic forecasts covering 3-5 years. The document also covers improving cashflow and trade working capital through metrics, activities, and systems. It discusses active balance sheet management including debt ratios, interest rates, and maturities as well as risk management.
The document provides an overview of finance basics for managers. It covers key topics like the basics of financial management, understanding financial statements, financial analysis and decision making, and projecting financial scenarios for project management. Some key points include defining accounting and bookkeeping, explaining the purpose and limitations of financial statements like the balance sheet, income statement, and cash flow statement, discussing various financial ratios for analyzing liquidity, profitability, solvency, financial stability, and management efficiency, and introducing techniques for projecting costs and revenues of potential projects through cost benefit analysis, net present value, and return on investment.
Welcome to Module 2 of One day intensive course on Finance for Non finance Managers/Professionals
This course consists of five modules, each dealing with different aspects of financial management.
One of the core elements of financial management is the three financial statements
Module 2 relates to discussion of the Blance Sheet-what is a Balance Sheet and how to read, interpret and use it
The document provides an overview of financial intelligence and the importance of understanding financial numbers and information. It discusses how smart managers can make bad financial decisions due to emotional biases and an inability to make sense of numbers. The document emphasizes that financial numbers are estimates based on accounting judgments and that different accounting methods can produce different financial results. It also notes the importance of asking questions about the numbers to ensure they accurately reflect the company's performance and financial health. Overall, the document stresses the need to turn financial information into true financial knowledge and understanding in order to make strategic financial decisions.
The document provides an overview of financial intelligence and literacy, including understanding financial statements and analysis, as well as tools for evaluating a company's performance, financial position, and cash flows. It also outlines the roadmap for conducting financial analysis of a company, including examining the business, profit and loss account, balance sheet, cash flows, and key financial ratios. The goal is to help readers develop skills in critically evaluating companies and making better investment and business decisions.
Finance is the language of business. To make effective business decisions, you have to understand and speak the terms in which business is measured. Top management decides on the basis of numbers. So, do you have a choice but to make the effort to start talking numbers confidently. This FREE eguide helps you take the first steps to financial intelligence.
The document provides 9 practical finance tips for entrepreneurs to confidently discuss finances with their CFO, including understanding key financial statements like the income statement, balance sheet, and cash flow statement; the differences between accounting and finance, revenues and expenses; as well as budgets, depreciation, and the differences between profits and cash. It aims to demystify financial concepts in a straightforward way for business owners.
Finance for non finance managers module 1 financial accounting basicsShahid Hussain Raja
Welcome to this one day intensive course on finance for non finance managers/professionals
Besides learning essential concepts, we will discuss the difference among financial accounting, management accounting and financial management
In Module 1, we will discuss the basics of financial accouning such as financial transactions, jargon used, conventions etc
Also the various ways of presenting these accounts-basic information about the three financial statements
This document provides an overview of cashflow, trade working capital, debt, and risk management for short, medium, and long-term forecasts. It discusses the methodology for short-term cashflow forecasts updated weekly, medium-term forecasts covering 12-24 months, and long-term strategic forecasts covering 3-5 years. The document also covers improving cashflow and trade working capital through metrics, activities, and systems. It discusses active balance sheet management including debt ratios, interest rates, and maturities as well as risk management.
The document provides an overview of finance basics for managers. It covers key topics like the basics of financial management, understanding financial statements, financial analysis and decision making, and projecting financial scenarios for project management. Some key points include defining accounting and bookkeeping, explaining the purpose and limitations of financial statements like the balance sheet, income statement, and cash flow statement, discussing various financial ratios for analyzing liquidity, profitability, solvency, financial stability, and management efficiency, and introducing techniques for projecting costs and revenues of potential projects through cost benefit analysis, net present value, and return on investment.
Welcome to Module 2 of One day intensive course on Finance for Non finance Managers/Professionals
This course consists of five modules, each dealing with different aspects of financial management.
One of the core elements of financial management is the three financial statements
Module 2 relates to discussion of the Blance Sheet-what is a Balance Sheet and how to read, interpret and use it
The document provides an overview of financial intelligence and the importance of understanding financial numbers and information. It discusses how smart managers can make bad financial decisions due to emotional biases and an inability to make sense of numbers. The document emphasizes that financial numbers are estimates based on accounting judgments and that different accounting methods can produce different financial results. It also notes the importance of asking questions about the numbers to ensure they accurately reflect the company's performance and financial health. Overall, the document stresses the need to turn financial information into true financial knowledge and understanding in order to make strategic financial decisions.
The document provides an overview of financial intelligence and literacy, including understanding financial statements and analysis, as well as tools for evaluating a company's performance, financial position, and cash flows. It also outlines the roadmap for conducting financial analysis of a company, including examining the business, profit and loss account, balance sheet, cash flows, and key financial ratios. The goal is to help readers develop skills in critically evaluating companies and making better investment and business decisions.
Finance is the language of business. To make effective business decisions, you have to understand and speak the terms in which business is measured. Top management decides on the basis of numbers. So, do you have a choice but to make the effort to start talking numbers confidently. This FREE eguide helps you take the first steps to financial intelligence.
The document provides 9 practical finance tips for entrepreneurs to confidently discuss finances with their CFO, including understanding key financial statements like the income statement, balance sheet, and cash flow statement; the differences between accounting and finance, revenues and expenses; as well as budgets, depreciation, and the differences between profits and cash. It aims to demystify financial concepts in a straightforward way for business owners.
Finance for non finance managers module 1 financial accounting basicsShahid Hussain Raja
Welcome to this one day intensive course on finance for non finance managers/professionals
Besides learning essential concepts, we will discuss the difference among financial accounting, management accounting and financial management
In Module 1, we will discuss the basics of financial accouning such as financial transactions, jargon used, conventions etc
Also the various ways of presenting these accounts-basic information about the three financial statements
Here are the solutions to the selected problems from Chapter 17:
P17-7A:
Accounts receivable, December 31, 2009 $90,000
Estimated uncollectible accounts (3% of receivables) 2,700
Net accounts receivable $87,300
Accounts receivable, December 31, 2010 $110,000
Estimated uncollectible accounts (5% of receivables) 5,500
Net accounts receivable $104,500
Increase in net accounts receivable $17,200
P17-9A:
Accounts receivable, January 1 $80,000
Credit sales for January 150,000
Collections for January (120,000)
Earning management refers to using accounting techniques to manipulate financial statements. Some common techniques include overestimating expenses to build a "cookie jar" reserve for future use, taking large one-time write-downs or restructuring charges to remove future expenses ("big bath"), and acquiring companies solely to boost current earnings ("big bet on the future"). Motives for earnings management include influencing stock prices, meeting analyst expectations, and managing compensation contracts or regulatory requirements. While some techniques are legal, fraudulent reporting that intentionally misleads investors can have severe consequences, as seen in the 2008 collapse of Lehman Brothers resulting from hidden debt.
The document discusses key financial statements and concepts:
1. It defines financial statements, balance sheets, income statements, cash flow statements, and statements of owner's equity. These statements are important for internal and external reporting and analysis of a company's financial performance and position.
2. The balance sheet provides a snapshot of a company's assets, liabilities, and equity. The income statement measures profitability. The cash flow statement shows cash inflows and outflows. Together these statements allow analysis of a company's leverage, liquidity, profitability, and cash generation.
3. Accurate financial reporting is critical for management to understand the business and make informed decisions. It also allows for external control and
The document provides information about finance director services for entrepreneurial companies. It discusses understanding a company's current financial position, key business drivers, cash flow needs, and how to prepare basic financial statements like the balance sheet, profit and loss statement, and cash flow statement. It also covers topics like break even analysis, financial reporting, taxation, and financial modeling and forecasting. The document aims to help entrepreneurs and business owners better understand their company's financials.
This document discusses the key differences between retirement accumulation and distribution strategies and the adjustments clients and advisors need to make when transitioning from accumulation to distribution. Some of the main points made include:
- Fundamental concepts like dollar cost averaging and compounding work differently in a distribution strategy compared to an accumulation strategy.
- The sequence of investment returns and volatility become more important in distribution since clients rely on steady withdrawals.
- Careful planning is needed to determine the best strategies for generating retirement income from a portfolio and transitioning assets over time in a tax-efficient manner.
- Close monitoring of withdrawal rates and account values is necessary to ensure the nest egg lasts throughout retirement.
This document discusses financial statement analysis for credit decisions. It describes the three main financial statements - the balance sheet, income statement, and cash flow statement. It then discusses different types of financial statement analysis including vertical analysis, horizontal analysis, and ratio analysis. Finally, it discusses analyzing a company's ongoing business concern by examining factors like working capital, cash flow, receivables, inventory, and management skills. The overall goal of financial statement analysis is to assess a company's financial health, performance, and ability to repay debts.
The document discusses the importance of cash flow forecasting for businesses. It explains that a cash flow forecast allows a company to plan for paying obligations, achieving goals, and funding growth. The document outlines various methods for forecasting cash flow, both direct and indirect. It also discusses the importance of accuracy in projections, monitoring key metrics, and updating forecasts regularly given changing business conditions. Cash flow forecasting is presented as a key financial planning tool that allows businesses to invest confidently and address potential cash flow issues proactively.
Bba 2204 fin mgt week 4 cashflow & financial planningStephen Ong
This document provides an overview of cash flow and financial planning. It discusses key concepts like depreciation, statements of cash flows, operating cash flow, free cash flow, and financial planning processes. The learning goals are to understand tax depreciation, statements of cash flows, and financial planning, including long-term strategic plans and short-term operating plans like cash budgets and pro forma financial statements. Examples are provided to illustrate concepts like depreciation calculations and developing statements of cash flows. Ethics examples consider appropriate CEO compensation and ways accountants could portray favorable earnings.
Working Capital Management And Cash Flow Analysis 06.07Ketoki
Working capital management and cash flow analysis are important for business success. Working capital is the time between investing in business assets and receiving payment, and measures current assets versus current liabilities. Managing working capital efficiently balances inflows and outflows to maximize liquidity. Cash flow looks at the timing of money in and out of the business from operations, investing and financing activities. Monitoring cash flows helps ensure solvency and adequate cash levels through analyzing components like receivables, payables and inventory levels.
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.
Finance for non financial personnel - part 8Quek Joo Chay
Many non-financial personnel find finance is mystical and somehow cannot comprehend financial information.
The 8 parts of the presentation are designed to help the non-financial personnel to look at finance from their own view point. Instead of learn finance from finance perspective, we learn our own perspective.
This is because your goal is to improve your current work not to become a qualified accountant. Crash courses usually can’t provide sufficient knowledge for you to understand finance.
Designed from business’s viewpoint, different from other approaches found in the market. Hopefully, we can equip non-financial personnel with business driven financial knowledge.
By end of the 8 presentation:
1. You can create your value to increase financial value
2. You can interpret financial reports to make decisions
3. You know how to work on budget
4.You can propose your ideas in terms of dollars & cents
5. You produce the financial numbers that your boss likes
6. You can communicate well with finance department
7. You make collaboration with accountant possible instead of just for the sake of formality
The cash flow statement provides information about cash inflows and outflows during an accounting period. It is developed from balance sheet and income statement data and is an important analytical tool. The cash flow statement focuses on operating, investing, and financing activities. Operating activities relate to core business operations like sales and expenses. Investing activities involve the purchase and sale of long-term assets. Financing activities include borrowing, repaying debt, and providing returns to owners. Cash flow analysis is used both internally and externally to evaluate a firm's liquidity, investment decisions, ability to meet obligations, and future financing needs.
This document discusses various ways that businesses can improve their cash flow to avoid or address cash flow problems. It identifies key causes of cash flow issues such as low profits, too much inventory, allowing too much customer credit, and overtrading. It then provides recommendations for improving cash flow through better cash flow forecasting, managing accounts receivable and payable more effectively, using different sources of financing, and reducing inventory levels.
This document provides a summary of the key financial considerations for a company's expansion project requiring Rs. 100 crore of funding. It recommends short-term financing over long-term options due to lower costs, flexibility, and less interference in management decision-making. Short-term sources could potentially provide long-term funding through renewals. While interest is fixed and assets may be tied up as security, the proposal addresses these shortcomings through negotiation, alternative securities like shares, and preparing legal teams. Overall, short-term financing is presented as the most suitable option given the company's strategic goals and the dynamic home appliances market in India.
Earnings management refers to reasonable accounting practices used to achieve stable financial results, as opposed to illegal manipulation. It can involve choosing accounting methods, estimates, transactions timing, or disclosures to manage earnings. Reasons include income smoothing, meeting forecasts, or maintaining share prices. Earnings management is detected by analyzing revenue recognition policies, accounts receivable, asset capacity, and comparing income to cash flows. While it can conceal information, some argue it provides a "smooth ride" for shareholders. Surveys found tolerance for creative accounting varies internationally. Accountants must be aware of potential abuse or manipulation.
No time has been better to extend Treasury\'s reach within an organization to effect permanent changes in the financial supply chain. Extending Treasury\'s Reach discusses ways to improve liquidity for survival today as well as to fuel growth in the future.
This document discusses the key differences between retirement accumulation and distribution strategies and the adjustments clients and advisors need to make when transitioning from accumulation to distribution. Some of the main shifts discussed include dollar cost averaging working in reverse under distribution, compounding also working in reverse, the sequence of returns mattering more, time becoming the enemy rather than an ally, and mistakes being more consequential. The document also covers strategies for generating retirement income, factors to consider when transitioning portfolios, and the need for closer ongoing management of distributed assets.
EBITDA and Other Scary Words (Series: MBA Boot Camp)Financial Poise
This webinar explores the ins and outs of financial language and how you can navigate the seeming labyrinth of a language that can sound foreign and in some ways counterintuitive. This webinar teaches the correct use of EBIT, EBITDA and EBITDAR while also dealing with concepts like Cap Rate vs. Capital Cost. This webinar also sheds light on issues with ROI and Payback among other valuation tools and explains what a Cash Conversion Cycle looks like for your business.
To view the accompanying webinar, go to:https://www.financialpoise.com/financial-poise-webinars/ebitda-and-other-scary-words-2021/
EBITDA and Other Scary Words (Series: MBA Boot Camp 2020) Financial Poise
This webinar explores the ins and outs of financial language and how you can navigate the seeming labyrinth of a language that can sound foreign and in some ways counterintuitive. This webinar teaches the correct use of EBIT, EBITDA and EBITDAR while also dealing with concepts like Cap Rate vs. Capital Cost. This webinar also sheds light on issues with ROI and Payback among other valuation tools and explains what a Cash Conversion Cycle looks like for your business.
To listen to this webinar on demand, go to: https://www.financialpoise.com/financial-poise-webinars/ebitda-and-other-scary-words-2020/
Here are the solutions to the selected problems from Chapter 17:
P17-7A:
Accounts receivable, December 31, 2009 $90,000
Estimated uncollectible accounts (3% of receivables) 2,700
Net accounts receivable $87,300
Accounts receivable, December 31, 2010 $110,000
Estimated uncollectible accounts (5% of receivables) 5,500
Net accounts receivable $104,500
Increase in net accounts receivable $17,200
P17-9A:
Accounts receivable, January 1 $80,000
Credit sales for January 150,000
Collections for January (120,000)
Earning management refers to using accounting techniques to manipulate financial statements. Some common techniques include overestimating expenses to build a "cookie jar" reserve for future use, taking large one-time write-downs or restructuring charges to remove future expenses ("big bath"), and acquiring companies solely to boost current earnings ("big bet on the future"). Motives for earnings management include influencing stock prices, meeting analyst expectations, and managing compensation contracts or regulatory requirements. While some techniques are legal, fraudulent reporting that intentionally misleads investors can have severe consequences, as seen in the 2008 collapse of Lehman Brothers resulting from hidden debt.
The document discusses key financial statements and concepts:
1. It defines financial statements, balance sheets, income statements, cash flow statements, and statements of owner's equity. These statements are important for internal and external reporting and analysis of a company's financial performance and position.
2. The balance sheet provides a snapshot of a company's assets, liabilities, and equity. The income statement measures profitability. The cash flow statement shows cash inflows and outflows. Together these statements allow analysis of a company's leverage, liquidity, profitability, and cash generation.
3. Accurate financial reporting is critical for management to understand the business and make informed decisions. It also allows for external control and
The document provides information about finance director services for entrepreneurial companies. It discusses understanding a company's current financial position, key business drivers, cash flow needs, and how to prepare basic financial statements like the balance sheet, profit and loss statement, and cash flow statement. It also covers topics like break even analysis, financial reporting, taxation, and financial modeling and forecasting. The document aims to help entrepreneurs and business owners better understand their company's financials.
This document discusses the key differences between retirement accumulation and distribution strategies and the adjustments clients and advisors need to make when transitioning from accumulation to distribution. Some of the main points made include:
- Fundamental concepts like dollar cost averaging and compounding work differently in a distribution strategy compared to an accumulation strategy.
- The sequence of investment returns and volatility become more important in distribution since clients rely on steady withdrawals.
- Careful planning is needed to determine the best strategies for generating retirement income from a portfolio and transitioning assets over time in a tax-efficient manner.
- Close monitoring of withdrawal rates and account values is necessary to ensure the nest egg lasts throughout retirement.
This document discusses financial statement analysis for credit decisions. It describes the three main financial statements - the balance sheet, income statement, and cash flow statement. It then discusses different types of financial statement analysis including vertical analysis, horizontal analysis, and ratio analysis. Finally, it discusses analyzing a company's ongoing business concern by examining factors like working capital, cash flow, receivables, inventory, and management skills. The overall goal of financial statement analysis is to assess a company's financial health, performance, and ability to repay debts.
The document discusses the importance of cash flow forecasting for businesses. It explains that a cash flow forecast allows a company to plan for paying obligations, achieving goals, and funding growth. The document outlines various methods for forecasting cash flow, both direct and indirect. It also discusses the importance of accuracy in projections, monitoring key metrics, and updating forecasts regularly given changing business conditions. Cash flow forecasting is presented as a key financial planning tool that allows businesses to invest confidently and address potential cash flow issues proactively.
Bba 2204 fin mgt week 4 cashflow & financial planningStephen Ong
This document provides an overview of cash flow and financial planning. It discusses key concepts like depreciation, statements of cash flows, operating cash flow, free cash flow, and financial planning processes. The learning goals are to understand tax depreciation, statements of cash flows, and financial planning, including long-term strategic plans and short-term operating plans like cash budgets and pro forma financial statements. Examples are provided to illustrate concepts like depreciation calculations and developing statements of cash flows. Ethics examples consider appropriate CEO compensation and ways accountants could portray favorable earnings.
Working Capital Management And Cash Flow Analysis 06.07Ketoki
Working capital management and cash flow analysis are important for business success. Working capital is the time between investing in business assets and receiving payment, and measures current assets versus current liabilities. Managing working capital efficiently balances inflows and outflows to maximize liquidity. Cash flow looks at the timing of money in and out of the business from operations, investing and financing activities. Monitoring cash flows helps ensure solvency and adequate cash levels through analyzing components like receivables, payables and inventory levels.
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.
Finance for non financial personnel - part 8Quek Joo Chay
Many non-financial personnel find finance is mystical and somehow cannot comprehend financial information.
The 8 parts of the presentation are designed to help the non-financial personnel to look at finance from their own view point. Instead of learn finance from finance perspective, we learn our own perspective.
This is because your goal is to improve your current work not to become a qualified accountant. Crash courses usually can’t provide sufficient knowledge for you to understand finance.
Designed from business’s viewpoint, different from other approaches found in the market. Hopefully, we can equip non-financial personnel with business driven financial knowledge.
By end of the 8 presentation:
1. You can create your value to increase financial value
2. You can interpret financial reports to make decisions
3. You know how to work on budget
4.You can propose your ideas in terms of dollars & cents
5. You produce the financial numbers that your boss likes
6. You can communicate well with finance department
7. You make collaboration with accountant possible instead of just for the sake of formality
The cash flow statement provides information about cash inflows and outflows during an accounting period. It is developed from balance sheet and income statement data and is an important analytical tool. The cash flow statement focuses on operating, investing, and financing activities. Operating activities relate to core business operations like sales and expenses. Investing activities involve the purchase and sale of long-term assets. Financing activities include borrowing, repaying debt, and providing returns to owners. Cash flow analysis is used both internally and externally to evaluate a firm's liquidity, investment decisions, ability to meet obligations, and future financing needs.
This document discusses various ways that businesses can improve their cash flow to avoid or address cash flow problems. It identifies key causes of cash flow issues such as low profits, too much inventory, allowing too much customer credit, and overtrading. It then provides recommendations for improving cash flow through better cash flow forecasting, managing accounts receivable and payable more effectively, using different sources of financing, and reducing inventory levels.
This document provides a summary of the key financial considerations for a company's expansion project requiring Rs. 100 crore of funding. It recommends short-term financing over long-term options due to lower costs, flexibility, and less interference in management decision-making. Short-term sources could potentially provide long-term funding through renewals. While interest is fixed and assets may be tied up as security, the proposal addresses these shortcomings through negotiation, alternative securities like shares, and preparing legal teams. Overall, short-term financing is presented as the most suitable option given the company's strategic goals and the dynamic home appliances market in India.
Earnings management refers to reasonable accounting practices used to achieve stable financial results, as opposed to illegal manipulation. It can involve choosing accounting methods, estimates, transactions timing, or disclosures to manage earnings. Reasons include income smoothing, meeting forecasts, or maintaining share prices. Earnings management is detected by analyzing revenue recognition policies, accounts receivable, asset capacity, and comparing income to cash flows. While it can conceal information, some argue it provides a "smooth ride" for shareholders. Surveys found tolerance for creative accounting varies internationally. Accountants must be aware of potential abuse or manipulation.
No time has been better to extend Treasury\'s reach within an organization to effect permanent changes in the financial supply chain. Extending Treasury\'s Reach discusses ways to improve liquidity for survival today as well as to fuel growth in the future.
This document discusses the key differences between retirement accumulation and distribution strategies and the adjustments clients and advisors need to make when transitioning from accumulation to distribution. Some of the main shifts discussed include dollar cost averaging working in reverse under distribution, compounding also working in reverse, the sequence of returns mattering more, time becoming the enemy rather than an ally, and mistakes being more consequential. The document also covers strategies for generating retirement income, factors to consider when transitioning portfolios, and the need for closer ongoing management of distributed assets.
EBITDA and Other Scary Words (Series: MBA Boot Camp)Financial Poise
This webinar explores the ins and outs of financial language and how you can navigate the seeming labyrinth of a language that can sound foreign and in some ways counterintuitive. This webinar teaches the correct use of EBIT, EBITDA and EBITDAR while also dealing with concepts like Cap Rate vs. Capital Cost. This webinar also sheds light on issues with ROI and Payback among other valuation tools and explains what a Cash Conversion Cycle looks like for your business.
To view the accompanying webinar, go to:https://www.financialpoise.com/financial-poise-webinars/ebitda-and-other-scary-words-2021/
EBITDA and Other Scary Words (Series: MBA Boot Camp 2020) Financial Poise
This webinar explores the ins and outs of financial language and how you can navigate the seeming labyrinth of a language that can sound foreign and in some ways counterintuitive. This webinar teaches the correct use of EBIT, EBITDA and EBITDAR while also dealing with concepts like Cap Rate vs. Capital Cost. This webinar also sheds light on issues with ROI and Payback among other valuation tools and explains what a Cash Conversion Cycle looks like for your business.
To listen to this webinar on demand, go to: https://www.financialpoise.com/financial-poise-webinars/ebitda-and-other-scary-words-2020/
small business & epreneurship development U4.pdfkittustudy7
Financial management is vital for small businesses. It involves planning, organizing, and controlling financial activities like cash flow, budgets, and financial reporting to achieve business goals. Effective financial management requires skills in bookkeeping, forecasting, risk assessment, and capital structure optimization. Key aspects of financial management for small businesses include cash flow management, budgeting, and analyzing financial performance metrics like profit margins and return on investment. Common challenges include managing budgets, making payroll, paying bills on time, controlling debt, securing financing, and understanding different financing products.
Financial figures in absolute amounts do not provide the complete picture. Financial statements give a detailed understanding of the various financial entries and overall profits and expenses. This presentation explains the various methods to understand Financial Statements.
For more such innovative content on management studies, join WeSchool PGDM-DLP Program: http://bit.ly/SlideshareFaccounting
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The preparation of financial statements is a key aspect of an organisation's financial management as it relates to the recording and reporting of financial transactions and activities.
Financial statements support decision-making and financial analysis by providing a comprehensive overview of a company's financial performance, position and cash flow.
This document discusses financial statements and how they relate to entrepreneurial businesses. It provides definitions for key financial terms like assets, liabilities, equity, income statement, balance sheet, and cash flow statement. It explains the purpose and components of various financial statements. The document also discusses financial analysis metrics for evaluating a company's profitability, solvency, and efficiency.
Cash flows and financial anayisis ppt @ bec domsBabasab Patil
The document discusses cash flows and financial analysis for businesses. It provides information on three key sources of cash flows for businesses: operating activities, investing activities, and financing activities. It also discusses various types of financial ratios that are used to analyze businesses, including liquidity ratios, asset management ratios, debt management ratios, profitability ratios, and market value ratios. These ratios are used to evaluate different aspects of a business's performance and financial health.
Cash flows and financial anayisis ppt @ bec domsBabasab Patil
The document discusses cash flows and financial analysis for businesses. It provides information on three key sources of cash flows for businesses: operating activities, investing activities, and financing activities. It also discusses various types of financial ratios that are used to analyze businesses, including liquidity ratios, asset management ratios, debt management ratios, profitability ratios, and market value ratios. These ratios are used to evaluate different aspects of a business's performance and financial health.
Financial Account group assignment on Financial statement of Golden Agricultureamykua
This document provides an overview and examples of key financial statements including:
1) The balance sheet reports a company's assets, liabilities, and owner's equity at a point in time. It divides assets into current and long-term categories.
2) The income statement reports a company's revenues, expenses, and profits over a period of time. It follows revenue recognition and expense matching principles.
3) An example income statement from Golden Agri is presented showing revenues, expenses, and net income.
4) Financial statements provide important information to both internal and external users about a company's financial performance and health.
Financial statement analysis is the process of reviewing and evaluating a company's financial statements (such as the balance sheet or profit and loss statement), thereby gaining an understanding of the financial health of the company and enabling more effective decision making. Financial statements record financial data; however, this information must be evaluated through financial statement analysis to become more useful to investors, shareholders, managers and other interested parties.
This document provides an overview of topics covered in Accounting Day 2, including:
1. A review of debit and credit concepts through quizzes.
2. An introduction to key financial statements - the income statement reflects profitability, the balance sheet reflects financial position, and the cash flow statement shows cash inflows and outflows.
3. How transactions affect the income statement and balance sheet through accrual-based accounting adjustments.
The document then explores each financial statement in more detail, defining their purpose and key components like assets, liabilities, and equity for the balance sheet, and revenues and expenses for the income statement. Sample statements are provided for illustration.
This document outlines the syllabus for a course on financial accounting. It is divided into 5 units that cover topics such as the introduction and importance of financial accounting, accounting standards, the accounting process, preparing financial statements for sole proprietorships and joint stock companies, analyzing financial statements using techniques like ratio analysis, and interpreting the results. The units also discuss accounting concepts like the accounting equation, books of accounts, trial balance, depreciation methods, and the components of financial statements.
CriteriaNo Submission0 pointsEmerging (Fthrough D RaCruzIbarra161
Criteria
No Submission
0 points
Emerging (F
through D Range)
(12-14)
14 points
Satisfactory (C
Range) (14-16)
16 points
Proficient (B Range)
(16-18)
18 points
Exemplary (A
Range) (18-20)
20 points
Criteri
Score
Analyzed
your
company’s
operations
and the
market in
which it
operates.
/ 20Did not identify
your company’s
operations and the
market in which it
operates.
Unsupported with
research.
Identified your
company’s
operations and the
market in which it
operates.
Lacked credible
research support.
Described your
company’s
operations and the
market in which it
operates.
Weakly supported
with research.
Analyzed your
company’s
operations and the
market in which it
operates.
Sufficiently
supported with
research.
Analysis of your
company’s
operations and the
market in which it
operates was
compelling and
showed well-
developed logical
progression.
Well supported by
research.
Criteria
No Submission
0 points
Emerging (F
through D Range)
(6-7)
7 points
Satisfactory (C
Range) (7-8)
8 points
Proficient (B Range)
(8-9)
9 points
Exemplary (A
Range) (9-10)
10 points
Criterio
Score
Evaluated
the EVA,
and free
cash flow
using the
firm’s
annual
report.
/ 10Did not identify the
EVA, and free cash
flow using the firm’s
annual report.
Unsupported with
research.
Identified the EVA,
and free cash flow
using the firm’s
annual report.
Lacked credible
research support.
Described the EVA,
and free cash flow
using the firm’s
annual report.
Weakly supported
with research.
Evaluated the EVA,
and free cash flow
using the firm’s
annual report.
Sufficiently
supported with
research.
Evaluation of the
EVA, and free cash
flow using the firm’s
annual report was
compelling and
showed well-
developed logical
progression.
Well supported by
research.
Criteria
No Submission
0 points
Emerging (F
through D Range)
(6-7)
7 points
Satisfactory (C
Range) (7-8)
8 points
Proficient (B Range)
(8-9)
9 points
Exemplary (A
Range) (9-10)
10 points
Criterion
Score
Analyzed
the
firm’s
ROA and
ROE.
/ 10Did not identify the
firm’s ROA and
ROE.
Unsupported with
research.
Identified the firm’s
ROA and ROE.
Lacked credible
research support.
Described the firm’s
ROA and ROE.
Weakly supported
with research.
Analyzed the firm’s
ROA and ROE.
Sufficiently
supported with
research.
Analysis of the
firm’s ROA and ROE
was compelling and
actionable.
Well supported by
research.
Criteria
No Submission
0 points
Emerging (F
through D Range)
(6-7)
7 points
Satisfactory (C
Range) (7-8)
8 points
Proficient (B Range)
(8-9)
9 points
Exemplary (A
Range) (9-10)
10 points
Cr
Sc
Wrote in a
clear, concise,
and organized
manner;
demonstrated
ethical
scholarship in
Submission contains
no discernible
overall intent in
author’s selection of
ideas.
Errors in basic
writing conventions
are sufficiently
Submission contains
random
presentation of
ideas, which
preve ...
Fin Ratio Analysis of accounts for great efficiency.pptADNANSHEIKH87
This document discusses various types of financial ratios that can be used to analyze a company's financial statements. It covers liquidity ratios, leverage ratios, asset activity ratios, profitability ratios, and market value ratios. For each type of ratio, it provides the calculation and explains how to interpret the ratio results. The document also discusses using common-size and common-base-year financial statements as well as the DuPont analysis method for examining return on equity.
The document discusses the importance of financial planning and management for businesses. It outlines key financial documents like balance sheets, profit and loss statements, and cash flow statements that are used for financial planning and decision making. The objectives of financial management are to maximize profitability, liquidity, efficiency, return on capital, and growth for businesses. Financial planning is crucial for businesses to effectively manage costs, inventory, cash flow, debt, and financial resources to achieve their goals and objectives.
Financial analysis for juhayna & domty co . graduation project zagzig uni...Eslam Fathi
Financial Analysis is the process of selecting, evaluating, and identifying the financial
strength and weaknesses of the firm by properly establishing relationship between
items of financial statements. Firms, bank, loan officers and business owners all use
Financial analysis to learn more about a company’s current financial health as well as its
potential.
The document provides an overview of accounting concepts and financial reports for SPO LTD, an agricultural company in Kenya. It summarizes key financial statements including the balance sheet, income statement, and statement of cash flows. It explains accounting ratios like return on assets, current ratio, and profit margin ratio calculated from SPO LTD's reports. The document also describes accounting software features, charts of accounts, and users of accounting information like management, employees, owners, investors, and creditors.
The document discusses key financial statements and Generally Accepted Accounting Principles (GAAP). It describes the four main financial statements - balance sheet, income statement, statement of owner's equity, and statement of cash flows - and what each reports. It also explains several important GAAP principles, including the business entity principle, objectivity principle, cost principle, going concern principle, monetary unit principle, and revenue recognition principle. These principles are designed to make financial statement information relevant, reliable, consistent and comparable.
Financial statement analysis involves analyzing financial documents like income statements, balance sheets, and cash flow statements to evaluate a business's performance and financial position over time and in comparison to industry averages. It provides information on profitability, liquidity, asset management, financial structure, and market value. For Walker Ltd, an investor is considering shares, so the summary evaluates the company's performance, position, and recommends purchasing shares based on acceptable ratios, strong industry prospects, sales growth, cash flows, and favorable return on equity compared to industry averages.
This document provides an overview of a seminar on formulating strategies and action plans for financial stability during slow economic periods. The seminar agenda covers available government assistance programs, managing late payments, tax computation, and a question and answer session. The presentation discusses analyzing financial statements, developing a target financial situation and steps to close the gap between the current and target situations. It also outlines government grant programs for small businesses, including the Innovation and Capability Voucher and Capability Development Grant. The presentation provides examples of how these grants can be used to improve financial management and support business growth.
Similar to Financefornonfinance 130116104722-phpapp01 (1) (20)
5. P 5
Book keeping Vs Accounting
Accounting is the systematic recording, reporting, and
analysis of financial transactions of a business.
Bookkeeping is the recording of financial transactions.
Transactions include sales, purchases, income, receipts
and payments by an individual or organization.
6. P 6
Book keeping Process (Recording)
Vouchers
Primary Books (Day Book, Cash Book, Journal)
Secondary Book (Ledgers)
Trial Balance (Ledger Summary)
7. P 7
Financial Statements (Reporting)
State of Affairs (popularly known as Balance Sheet)
Income Statement (popularly known as Profit & Loss
Account)
Cash Flow Statement
Allied Information, Notes & Statements
8. P 8
Who uses these financial statements
Managers
Shareholders
Prospective Investors
Financial Institutions
Suppliers
Customers
Employees
Competitors
General Public
Governments
9. P 9
Decision making (Analysing)
Why there are no excess funds available?
Is the entity financially sound?
Would it be possible to make further loans?
Is the entity having positive growth trends?
How efficiently the management is working?
Will available cash generating be sufficient to provide in
the anticipated demand?
Whether company is in a sound position to take up new
project
10. P 10
Financial Management
Planning
Organizing
directing and controlling
Such as procurement and utilization of funds of the
enterprise. It means applying general management
principles to financial resources of the enterprise.
Business
Transactions
11. P 11
Key Learning - Basics of Financial management
“Managerial Decisions
can be more
Accurate, Precise & informed
With reasonable
Understanding & Analysis of
Financial Statements”
12. P 12
Action Plan
Facilitating Accounts Department in collecting them full
& correct information about business transactions.
Provide full documents for each business transaction
Being Careful while signing on any Accounting voucher
Asking for appropriate Report while taking any business/
project decision
15. P 15
What a Balance Sheet says
Detailed summary of the assets and claims against those
assets, as at a particular date.
Financial position of the company with regard to its ability to
pay current debts. By comparing the current assets to the
current liabilities,
Company’s financial position to carry on its business
operations. The fixed-asset section indicates how many
resources the company has working for it to assist in
revenue generation.
Strength of the owner's claim against the assets. however,
this claim is residual, or remaining claim after the creditors'.
16. P 16
What a Balance Sheet does not say
Details of how the profits were made. That information
comes from the Income Statement.
Claims of the creditors and the owner(s) against a specific
asset. The claims are against the assets in general.
The word 'Capital' under owner's equity must not be
interpreted as cash. Capital means investment not cash.
Market value, current value, or worth of a business. Many
readers believe the total assets represent a bundle of
future cash reserves. Assets are reported at historical
cost, and their purpose is to assist revenue generation.
17. P 17
Profit & Loss Account
Gross Receipts/ Revenues
Less: Manufacturing & operating Expenses
Operating Profit
Less: Depreciation
Profit before Interest & Tax
Less: Interest
Profit before Tax
Less: Tax
Profit after Tax
18. P 18
Profit & Loss Account
Profit after Tax
Add/ Less: Prior period adjustments
Add/ Less: Extra Ordinary Items
Profit available for appropriations
Add/ Less: Appropriations
Add/ Less: Dividend
Add/ Less: Dividend Distribution Tax
Add/ Less: General Reserve
Surplus carried to Balance Sheet
19. P 19
What an Income Statement says
Main and any secondary sources of income.
The terms used to describe the revenue will provide a
clue about the nature of the organization.
The items listed as expenses are expired, meaning they
have no useful value left.
The result of matching the revenues and expenses
yields the Net Income or Net Earnings.
20. P 20
What an Income Statement does not say
Does not predict the future income or Expenses; Since
the future is full of uncertainty, historical Income
Statement can't be relied on the reported results of any
single period for an indication of future results.
Does not provide an exact measurement of net income
for the accounting period.
An Income Statement does not report True Profit, which
is the difference between total funds invested over the
life of the company and funds realized from the sale of
the company.
Net Income does not mean cash! Always keep in mind
that net income is the excess revenue over related
expenses. (Accrual)
21. P 21
Cash Flow Statement
Opening Cash & Cash
Equivalents
Closing Cash & Cash
Equivalents
Changes Due to
Operating Activity
Financing Activity
Investing Activity
22. P 22
What a Cash Flow says
Cash flow is the movement of money
A positive cash flow is the ideal outcome; this means
positive cash flow is king; but not always.
Cash flow is unlike Profit & Loss Statement; it records
transactions only when it happens actually.
23. P 23
What a Cash Flow does not say
cash flow statement does not reveal a profit or a loss
Just because your business has a positive cash flow, it
didn't necessarily generate more income from operating
activities
Without digging into the reasons straight forward
decision making is not worthy.
24. P 24
Key Learning - Understanding Financial Statements
“Financial statements allow you to assess
a company’s current financial strength, &
determine its profitability and creditworthiness,
along with a background to make
smart decisions for Future Plans”
25. P 25
Action Plan
Observe, Read & Assess different Financial Statements
and discuss your observation with your Accountant
Think of your every decision that where in financial
statement it would affect.
Try to reduce costs and thereby help your company in
improving its bottom line.
28. P 28
Interpreting the Numbers
Liquidity position
Profitability
Solvency & Security of the loans
Financial Stability
Management Efficiency
29. P 29
Ratio Analysis
Ratios recognise the symbiotic relationships of various
items of the Financial Statements.
Ratios also allow for better comparison through time or
between companies
Ratios analysis is just a suggestive factor and not a
conclusive evidence
Effective financial analysis begins with analyzing the
industries to which the firm belongs and the firm’s
strategies to create a sustainable advantage
30. P 30
Liquidity position
Current Ratio = CA / CL
company's ability to pay back its short-term liabilities
Standard = 2
Less than 1 is alarming
Higher current ratio is not necessarily mean better liquidity
‡Quick Ratio = (CA – Inventory) / CL
The higher the current or quick ratios are, the more
comfortable a company should be taking on new debt to
finance expansion or new development efforts. Decide
whether to proceed with debt-based financing of a new
project, or to work harder to create more revenue first.
Increase revenue by either repositioning your products,
increasing their exposure or adding features.
•
31. P 31
Liquidity position
Cash Ratio = Cash / CL
Most stringent and conservative
Often seen as poor asset utilization for a company to hold
large amounts of cash
NWC to Total Assets = NWC / TA
Cash management and the management of operating
liquidity is important for the survival of the business firm. A
firm can make a profit, but if they have a problem with their
cash position, they won't survive.
32. P 32
Liquidity position
‡Defensive Interval = CA / Average daily operating costs
It is not a replacement to the other ratios, but a complement
The defensive interval, determines how long a company
would be able draw on quick assets to meet its day to day
expenses
Ideally should be between 30 and 90 days
33. P 33
Profitability
Operating Profit Margin = Operating Income / Sales
Return achieved from standard operations and does not
include unique or one time transactions
Also called return on sales margin
Shows the efficiency of a company in controlling the costs
and expenses associated with business operations
Profit Margin = Net Income / Sales
Indicator of how efficient a company is and how well it
controls its costs. The higher the margin is, the more
effective the company is in converting revenue into actual
profit.
34. P 34
Profitability
Return on Assets (ROA) = Net Income / Total Assets
Create a plan to increase overall income if these ratios are
too low, as this shows that you are not achieving enough
return on your assets or your investors' money.
Incentivize your team to increase sales by increasing
commission percentages or adding other rewards.
‡Return on Equity (ROE) = Net Income / Avg. Equity
The return on equity figure takes into account the retained
earnings from previous years, and tells investors how
effectively their capital is being reinvested. Thus, it serves as
a far better gauge of management's fiscal adeptness than
the annual earnings per share.
35. P 35
Solvency & Security of the loans
Total Debt Ratio = (TA – TE) / TA
indicates what proportion of debt a company has relative to
its assets. The measure gives an idea to the leverage of the
company along with the potential risks the company faces in
terms of its debt-load.
Long-term debt ratio = LTD / (LTD + TE)
The greater a company's leverage, the higher the ratio.
Generally, companies with higher ratios are thought to be
more risky because they have more liabilities and
less equity.
Times Interest Earned = EBIT/ Net Interest Expense
also known as interest coverage ratio, indicates how well a
company can cover its interest payments on a pre-tax basis
36. P 36
Solvency & Security of the loans
Debt Service Coverage Ratio = NOP/ Total Debt Service
Measures the company's ability to pay their debts
Increase or decrease of the DSCR over time a company can
determine if they are building liquidity or losing
Debt/Equity = TD / TE
Indication of the gearing level of a company; A high ratio
means that a company may be over-leveraged with debt
Equity Multiplier = Avg. TA/ Avg. Stockholders' Equity
If the equity multiplier ratio contains a high amount of debt or
leverage then this means the firm may be reaching distress
costs. High levels might also mean that the company has an
inability to gain further financing to push into new markets.
37. P 37
Financial Stability
Free Cash Flow = CF(Op) – Cap Exp.
It measures a company’s ability to generate internal
growth and to return profits to shareholders.
Working Capital to Total Assets = NWC/ TA
An increasing Working Capital to Total Assets ratio is
usually a positive sign, showing the company's liquidity
is improving over time.
Book Value per share of common stock = TNW-PC/No. of
Shares
How much shares are worth on the books after all
debt is paid off.
38. P 38
Management Efficiency
Debtors Turnover = Average Debtors/ Turnover
Efficient business operation or tight credit policies
Creditors Turnover = Average Creditors/ Credit Purchase
How a company manages paying its own bills. A
higher ratio is generally more favourable as payables
are being paid more easily
Stock Turnover = Average Stock/ Turnover
how many times the entire inventory of a company
has been sold during an accounting period
39. P 39
Management Efficiency
Fixed Asset Turnover Ratio = Turnover/ Avg. FA
Measures how well a company is using its fixed assets to
generate revenues. The higher the fixed asset turnover ratio,
the more effective the company's investments in fixed assets
Working Capital Turnover Ratio = Turnover/ Avg. WC
how effectively a company is using its working capital to
generate sales.
Total Assets Turnover Ratio = Turnover/ Avg. Total Asset
The lower the total asset turnover ratio as compared to
historical data for the firm and industry data, the more sluggish
the firm's sales. This may indicate a problem with one or more
of the asset categories
40. P 40
Key Learning - Financial Analysis &
Decision Making
“Study of relationships among and between
various figures of financial statement explains
important facts that help us in Financial Planning
& Decision Making”
41. P 41
Action Plan
Taking decisions for the purpose of project management
& Financial Planning.
Managing Projects more vigilantly as far as financial
aspects are concerned
Taking part in management meetings more actively and
coming out with innovative comments
43. P 43
Go Beyond the Income Statement
Financial forecasting is as much art as it is science
Assumptions & Projections goes side by side
It’s best to be realistic in your projections
Keep in mind the difference between fixed and variable
costs; differentiate where appropriate.
44. P 44
Cost Benefit Analysis
A cost benefit analysis finds, quantifies, and adds all the
positive factors. These are the benefits. Then it
identifies, quantifies, and subtracts all the negatives, the
costs. The difference between the two indicates whether
the planned action is advisable.
45. P 45
Project Analysis
Net Present Value
NPV can be described as the “Difference Amount” between the
sums of discounted; cash inflows and cash outflows. It compares
the present value of money today to the present value of money
in future, taking inflation and returns into account
Return on Investment
A performance measure used to evaluate the efficiency of
an investment or to compare the efficiency of a number of
different investments
46. P 46
Project Analysis
Payback Analysis
Refers to the period of time required for the return on an
investment to "repay" the sum of the original investment.
Payback period is usually expressed in years.
It does not account for the time value of money, risk, financing or
other important considerations, such as the opportunity cost
Total Cost Outlay
Any concrete costs that can be identified in the past, present or
future. Also referred to as "explicit costs".
47. P 47
Project Analysis
Cash Flow Analysis
study of the cycle of your business' cash inflows and
outflows, with the purpose of maintaining an adequate cash
flow for your business, and to provide the basis for cash flow
management.
Break Even Point
the point at which cost or expenses and revenue are equal:
there is no net loss or gain, and one has "broken even".
48. P 48
Project Analysis
Profitability Life Cycle
To achieve maximum profit for an investment in the long run
The LCP analysis is often executed as a comparison
between investment A and alternative B. The alternative with
the highest LCP will be chosen.
Sunk Cost
These are the costs (in time, money, mental and emotional
energy spent, etc.) incurred in the past as a result of a
decision made long ago. It's now impossible to recover these
retrospective costs.
49. P 49
Project Analysis
Opportunity Cost
These are the immediate costs of not taking the next best
alternative or, in economics speak, of not putting a resource
to its best use.
Marginal Cost
Derivative of total production costs with respect to the level
of output.
50. P 50
Key Learning – Project Management
“Role of Financial Analysis in
Project Management and its importance in
Project appraisal, Planning and Feasibility Analysis
of the project prior to implementation”
51. P 51
Action Plan
Taking decisions with regard to project initiation.
Asking for Cost benefit Analysis before starting any new
project.
Appraising Managerial Decisions in sync with corporate
targets
Icebreaker
Introduce yourself, your father and village’s name in your mother tongue – no translations needed
Take them through the marooned debate and drive home the point that our stands in this debate our based on our individual values, and that these values are different for each individual