Presentation for Module no 5.pptx - FINANCIAL FUNDAMENTS...

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FINANCIAL FUNDAMENTS FOR NON FINANCIAL MANAGERS MODULE FIVE
AGENDA Discussion about exercises and assignments. Objectives for Module Six Review Modules 1 through 5 Discuss Module 6 Assignment 12:00 – Self Study
OBJECTIVES FOR MODULE FIVE We’ve covered Step 1 – Bookkeeper – records transactions Step 2 – Accountant – prepares financial statements Step 3 – Cashflows – analyze cash flows by comparing two consecutive statements Step 4 – Financial Statement Analysis – Analyzing Financial Statements Step 5 – Break-Even Analysis Step 6 – Budgets, Planning and Controlling
BOOKKEEPING: TRANSACTIONS Entering transactions Daily receipts Invoicing Entering purchases Journalizing Produces account totals Create budgets KNOWLEDGE Know the different types of accounts Liabilities - Assets Equity Income Expenses
ACCOUNTANT STATEMENTS Takes the totals the Bookkeeper provides and creates statements These statements help a Business Owner make solid financial decisions for their business. KIND OF STATEMENTS Statement of Financial Position (balance sheet) Statement of Income (Income Statement, Profit and Loss Statement) Statement of Changes in Equity Statement of Cash Flow
THE STATEMENT OF FINANCIAL POSITION (BALANCE SHEET) Is a snapshot of a company’s financial condition at that moment in time. This statement is divided into five sections. Non-Current Assets and Current Asset on one side Equity, Non-Current Liabilities and Current Liabilities on the other side.
STATEMENT OF INCOME It shows the flow of revenue eared and costs incurred by a business during a given period. There are three levels of profitability: Gross Profit Profit before taxes Profit for the year
STATEMENT OF CHANGES IN EQUITY Click icon to add picture Represents the interest of the shareholders of a business. 1) The amount of profit that was not distributed to shareholders since the business was started. 2) The profit earned and dividends paid during the current operating period. 3) The amount of earing remaining at the end of the period. Statement of Comprehensive Income 2016 2017 2018 Profit for the year 309 440 500 Other comprehensive income (loss) Exchange differences on translating foreign operations 0 0 0 Cash flow hedges 0 0 0 Gains on property revaluation 0 0 0 Total other comprehensive income/ (loss) 0 0 0 Total comprehensive income for the year 309 440 500 Statement of Changes in Equity 2016 2017 2018 Common shares Balance at beginning of year 675 675 675 Common shares issued 0 0 0 Other changes 0 0 0 Balance at end of year 675 675 675 Retained earnings Balance at beginning of year 259 568 1,008 Profit applicable to common shareholders 309 440 500 Sub-total 568 1,008 1,508 Dividends paid to shareholders 0 0 0 Balance at end of year 568 1,008 1,508 Accumulated other comprehensive income/(loss) Balance at beginning of year 0 0 0 Other comprehensive income/(loss) 0 0 0 Balance at end of year 0 0 0 Total shareholders' equity 1,243 1,683 2,183
STATEMENT OF CASH FLOWS Shows where the cash came from(inflow) and where it went(outflow) between accounting periods. Divided into 4 sections: 1)

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