Session Number: TU312 Session Title: Business Acumen for Learning Professionals: An Innovative Approach Session Start Date: 5/24/2011 Session Time: 4:00 PM - 5:30 PM Room: W 311 AB

1. May 23-25, 2011 Orlando, Florida May 23-25, 2011 Orlando, Florida Business Acumen for Learning Professionals: An Innovative Approach Peter Frampton • 24 May 2011 4:00 PM - 5:30 PM ASTD 2011 International Conference & Exposition

2. Foundation of Business Acumen is… Understanding the Numbers. 2 p9

3. 3 Look beyond the stripes p11

4. Color Accounting Framework™- Definitions SOURCE OF FUNDS USE OF FUNDS Assets Liabilities Obligation/ Outsiders’ Claim Valuable Balance Sheet Equity Owners’ Contribution/ Claim Profit Story Expenses Income Income Statement Generation of Value Loss of Value © ACA

5. Accounting Layout & Logic SOURCE OF FUNDS USE OF FUNDS Assets Outsiders’ Claim Bank loan 30 000 Property 50 000 1 Borrow/Lenders = Cash  600 + Statement of Position Stakeholders’ Claim Cash  100 Endowment  20 000 Stakeholders 2  500 Surplus 500 Expenses Income Customers/Donors Consulting 600 3 Taxi used100 Statement of Activity © ACA NFP CAF

6. Organizing principles

7. Perspective 7 p46

8. To communicate effectively you must stay cognizant of the duality of accounting.

9. Balancing the books Sources of funds Uses of funds $99 $99

10. Balancing the books Sources of funds Uses of funds $99 $99

11. Balancing the books Sources of funds Uses of funds $99 $99

12. Balancing the books Sources of funds Uses of funds $99 $99

13. The ONLY 4 transactions that exist 13 p24

14. Debit accounts Credit accounts Crediting Debiting Crediting Debiting Same =  Opposite = 

15. Dec Dec Dec Mar Mar Mar Jan Jan Jan Feb Feb Feb Business receives payment at the same time as the income was earned Earning income  Liabilities Assets 1 Equity  Money received Profit Expenses Income Work performed  X   2  Business receives payment before the income was earned (a) (b) Liabilities Assets Equity Profit  X   Expenses Income 3 Money received Work performed A/R Cash  (a) (b) Business does the work first and then receives payment later Liabilities Assets Equity Profit Expenses Income Money received Work performed

16. Dec Dec Dec Mar Mar Mar Jan Jan Jan Feb Feb Feb Business pays at the same time as incurring the expense Incurring an expense Liabilities Assets  1 Equity Cash paid  Profit Expenses Income Expense incurred X    2 PrepaidExpense Cash Business pays before incurring the expense  (a) Liabilities Assets (b) Equity Profit X   Expenses Income Money paid Expense incurred  3  (a) (b) Business incurs the expense first and then pays for it later Liabilities Assets Equity Profit Expenses Income Money paid Expense incurred

17. Gross Profit Margin USE OF FUNDS SOURCE OF FUNDS Liabilities Assets Equity Gross Profit % Income Expenses Indirect Expenses Direct Expenses Sales © CAI 2008

18. Color Accounting Framework™ Labor Consulting, Inc. SOURCE OF FUNDS USE OF FUNDS Assets Liabilities Bank loan+300 000 Property+400 000 1 Borrow/Lenders = Cash +100 000 + Balance Sheet Equity Cash +6 000 Share capital+200 000 Investment/Owners 2 Cash -100 Profit 5 900 Profit Story Expenses Income Net Income/Customers Fees earned+6 000 3 Taxi used+100 Income Statement © ACA

19. EBITDA& EBIT 19 p53

20. 20 Cash Flow Statement Operating activities Investing activities Financing activities p54

21. 21 Global Retail – headline reviewtable p38

22. 22 Global Retail – headline reviewtable p38

23. 23 Global Retail – headline reviewtable p38

24. 24 Global Retail – headline reviewtable p38

25. Liabilities Assets Income Expenses A value story… The value cycle! USE OF FUNDS SOURCE OF FUNDS Equity

26. A whimsical farming analogy 26 p49