finance basics - white room session

The Business of Being in Business

WORK BASED REVIEW

The aim of the module is to review and learn about

the key financial controls used in a creative

business and how they support management and

project decision making

MO

NE

Y

What's the definition of an accountant? 

Someone who solves a problem you didn't know you had in a way you don't understand.

The Business of Being in BusinessHow Businesses Work

VISION

MISSION

VALUES BEHAVIOURS

OBJECTIVES STRATEGIES

KNOWLEDGE SKILLS

THE BUSINESS MODEL

VISION

MISSION

VALUES BEHAVIOURS

OBJECTIVES STRATEGIES

KNOWLEDGE SKILLS

LINKING FINANCE TO BUSINESS

CORE AREAS IN WHICH ANNUIAL BUDGETS ARE

SET AND MONITORED

BUDGETS

FINANCIAL

How do we add value

to our customers

and shareholder

s while controlling

costs?

INTERNAL PROCESS

How do we satisfy customers while meeting budget constraints in how

we operate?

LEARNING AND GROWTH

How do we enable ourselves to grow and

change so as to prosper?

CUSTOMERS

Who are our

customers and how do we create value for

them?

BALANCED SCORECARD

THE BALANCED SCORECARD

FINANCIAL

Objectives

Measures

Targets

Initiatives INTERNAL PROCESS

Objectives

Measures

Targets

Initiatives

LEARNING AND GROWTH

Objectives

Measures

Targets

Initiatives

CUSTOMERS

Objectives

Measures

Targets

Initiatives

TO ACHIEVE VISION AND STRATEGY

THE BALANCED SCORECARD

The Business of Being in BusinessFinance in Business

Money does two things in business.

MONEY

It comes in…

…and it goes out

Balance Sheet

Profit and Loss

Cash Flow

THE KEY ACCOUNTS

A BUSINESS REALITY…

The Business of Being in BusinessThe Balance Sheet

The purpose of a balance sheet

The purpose of all balance sheets is to give a statement of net worth at any point in time

Contains assets and liabilities

THE BALANCE SHEET

BALANCE SHEET ACTIVITY

At 31 January 2009

2008 2007

The Business of Being in BusinessThe Profit and Loss

The purpose of a profit and loss

A profit and loss account shows just how profitable (or not) a business has been over a set period

Turnover less costs

THE PROFIT AND LOSS

PROFIT AND LOSS ACTIVITY

RDF MEDIA PROFIT AND LOSS

The Business of Being in BusinessCash Flow

The purpose of cash flow forecasting

It's a 'live' document and an essential planning tool from which you estimate future income and expenditure

All forecasted income less expenditure plus cash in the bank

CASH FLOW

Balance Sheet

Profit and Loss

Cash Flow

The Past

The Present

The Future

KEY ACCOUNTS IN FINANCE

Cash in, cash out Balance Sheet Profit and Loss Cash Flow Forecast You manage your finance

THIS MORNING

LUNCH

The Business of Being in BusinessBudgeting

A budget is a plan of what you

need to spend on a specific

project, activity or service.

A BUDGET

Involve people Be realistic Know your

facts Consider fixed

and variable costs

SETTING BUDGETS

VOLUME

CO

ST

FIXED COSTS

VARIABLE COSTS

FIXED AND VARIABLE COSTS

BUDGET ACTIVITY

Involve people

Be realistic

Know your facts

Fixed and

variable costs

Review, react

and revise

budgets

BUDGETING

The Business of Being in BusinessFinance in Action

The Business of Being in BusinessValue for Money

RETURN ON INVESTMENT

Return on Investment (ROI) is a

measure of the profit earned

from each investment made in

n activity or project

(Total Profit – Investment)Investment

RETURN ON INVESTMENT CALCULATION

The Business of Being in BusinessModule Review

Cash is King

Balance Sheet

Profit and Loss

Cash Flow Forecasting

Budget Management

Being able to use the information

TODAY

"When I asked my accountant if anything could get me out of this mess I am in now he thought for a long time and said, 'Yes, death would help'.“Robert Morley

The Business of Being in Businessinfo@skillschannel.tv