Download - ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Business Financial Records 15.1 15.1Types of Financial Records 15.2 15.2Budgets and

©2013 Cengage Learning. All Rights Reserved.

Business Management, 13e

Business Financial Records15.1 Types of Financial Records15.2 Budgets and Budgeting15.3 Financial Reports15.4 Analyzing Financial Data

CHAPTER

15



CHAPTER 15

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15.1 Types of Financial Records

DLTs● Describe why businesses need to maintain

financial records.● Identify and discuss the purpose of several

types of business financial records.



CHAPTER 15

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Financial Records

● Record-keeping systems● Accounting and data processing



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Types of Financial Records

● Cash records● Credit records● Depreciation records● Special asset records● Tax and payroll records● Protecting business records



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15.2 Budgets and Budgeting

DLTs● Describe the uses of several types of business

budgets.● Discuss the reasons managers prepare more

than one budget estimate.



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Business Budgets

● Importance of budgets● Types of budgets

● Start-up budget● Operating budget● Cash budget● Capital budget● Sales budget



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Administering the Budget

● Prepare three budget estimates● Use budget to monitor● Make adjustment● Compare budgets to actual results



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15.3 Financial Reports

DLTs● Describe the contents and explain the purpose

of a balance sheet.● Describe the contents and explain the purpose

of an income statement.



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Financial Performance and Financial Conditions

● Keep thorough and accurate records● Prepare important financial reports regularly● Interpret the financial information in the

reports● Make decisions that will have a positive

influence on future financial results



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The Balance Sheet

● Kinds of financial data● Value of balance sheet information

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The Income Statement

● Kinds of financial data● Value of income statement information

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Analysis of Budgeted Income Statement

Cost of Goods Sold; 34.7%

Salaries and Wages; 19.5%Advertising/Promo-

tion; 7.9%

Depreciation Expense; 6.6%

Utilities; 6.6%

Supplies and Ma-terials; 6.1%

Miscellaneous Expenses; 1.4%

Net Profit, 17.3%

Total Operating Expenses, 48.1%

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15.4 Analyzing Financial Data

DLTs● Describe several types of financial analysis

that help in the understanding of a business’s financial condition.

● Identify where business owners and managers can turn to get help with understanding and using financial information.



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Using Financial Information

● Cash flow● Working capital● Financial ratios




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Cash Flow




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Financial Ratios

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Sales

Net ProfitReturn on SalesShows how profitable a firm was for a specified period of time

Average Merchandise Inventory

Cost of Goods SoldInventory TurnoverShows whether the average monthly inventory might be too large or small

Current Liabilities

Current AssetsCurrent RatioShows whether a firm can meet its current debts comfortably

Owners’ Equity

Net ProfitReturn on Owners’ EquityShows whether the owners are making a fair return on their investment

Total Assets

Net ProfitReturn on InvestmentShows rate of return on the book value of everything owned in the business



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Sources of Financial Information

● Accountants● Bankers● Consultants● Government

Download - ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Business Financial Records 15.1 15.1Types of Financial Records 15.2 15.2Budgets and

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