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TRANSCRIPT
Finance For Non-Financial Personnel Part 4Business Driven Finance Insights For Laymen
Financial Reporting
£ ¥ € ₳ ₨$The Structure of Finance For Non-Financial Personnel
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Part 1
Part 2
Part 3
Part 4
Introduction and explain the importance of learning business driven finance
Misconceptions - to describe the common misread of the laymen about the accounting department and it practise. Fundamentals of financial knowledge-set your perspective.
Records - understand the principles that used in recording transactions & how your activities related to them. Very important but have been ignore by many.
Reports- learn evaluate financial information, perform critical ratios analysis, and read different reports. From your perspective, how to use the reports in the best way.
8 presentations altogether, if you cannot find all the links, kindly email [email protected] to request
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FINANCIAL REPORTING
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Useful Report ARE
● Purposeful● Design for Decision● Good Information● Well Presented
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“Each report must come with a reason to meet a need.”“Learn how to design and prepare the required content in the report for correct decision to be made.”
£ ¥ € ₳ ₨$
Useful Report ARE
● Purposeful● Design for Decision● Good Information● Well Presented
educational: free distribution
“Each report must come with a reason to meet a need.”“Learn how to design and prepare the required content in the report for correct decision to be made.”
“timely; reliable; relevant; fit for purpose; cost; complete ”“arrange the sequence of good information to display well ”
What if I don’t have
perfect reports?
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Complete Piece of Information for Decision Making
Objectives
StrategiesImpacts
Financial & non-financial numbers
Perceive
Solely rely on financial information to make decision is dangerous
Good Information: “timely; reliable; relevant; fit for purpose; cost; complete ”
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Basic Report Structure
● Position● Performance● Ratio & Formula● Comparison
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“All these are time bounded to explain Past-Present-Future”“Look at position, see balances. (B/S)”“Look at performance, see cummulative numbers. (P/L)”
ROI
Cash
Conversion
Rate
ROE
NPV
EVA Acid Test
Profit
Margin
Contribution
Margin
(Net Income/ Sales)x (Sales/ Assets) x
(Assets/ Equity)
£ ¥ € ₳ ₨$
Basic Report Structure
● Position● Performance● Ratio & Formula● Comparison
educational: free distribution
“All these are time bounded to explain Past-Present-Future”“Look at position, see balances. (B/S)”“Look at performance, see cummulative numbers. (P/L)”
“Focus on the purpose before generate ratio & formula”“Ratio & formula explain trends & relationships”“Comparison against time, place, industry, & items”
ROI
Cash
Conversion
Rate
ROE
NPV
EVA Acid Test
Profit
Margin
Contribution
Margin
(Net Income/ Sales)x (Sales/ Assets) x
(Assets/ Equity)
How to read all these?
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● Internal - Standard● Internal - Specific● External - Standard● External - Specific
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Types Of Reports
Payment status
Audited
Weekly
Management
Investment Evaluation
Sales
Tr
ends
Income TaxPayment Status
Aging
report
Project P/L
Cost Analysis reports
“Internal refers to management reports which include periodic reports, MBE reports, and ad hoc specific reports”“Needs from corporate, business, and operation”
£ ¥ € ₳ ₨$
Types Of Reports
● Internal - Standard● Internal - Specific● External - Standard● External - Specific
educational: free distribution
Types Of Reports
Payment status
Audited
Weekly
Management
Investment Evaluation
Sales
Tr
ends
Income TaxPayment Status
Aging
report
Project P/L
Cost Analysis reports
“External reports usually based on GAAP and to meet government and regulatory requirements”“Standard applied to all or a specific group of companies”“Specific may due to any reason from bank, debtor, creditor”
“Internal refers to management reports which include periodic reports, MBE reports, and ad hoc specific reports”“Needs from corporate, business, and operation”
Why management reports different
from GAAP?
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How To Report
● Electronic● Printed● Explain By Someone● Environment
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“The reports can be presented and documented by electronic or/ and printed depend how you going to used it”“Documented reports can be approved and unapproved”
One to Many
Data modelling
Dashboard
Conference room
Power
poin
t
PDFExcel
Glossy
Paper
Drill Down
One to One
£ ¥ € ₳ ₨$
How To Report
● Electronic● Printed● Explain By Someone● Environment
educational: free distribution
“The reports can be presented and documented by electronic or/ and printed depend how you going to used it”“Documented reports can be approved and unapproved”
“Some reports are self explained, others need explanation”“Example: in the management meeting the accountant explains the results presented in the financial reportsOne to Many
Data modelling
Dashboard
Conference room
Power
poin
t
PDFExcel
Glossy
Paper
Drill Down
One to One
Why financial results are reported in
many forms?
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Use The Reports
● Diagnosis/ Review● Estimate/ Modeling ● Control & Check● Others
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“With analytic skills to understand position, performance, & future for different purposes, example reaction to an offer”“Reports are future process for record or estimate”
Track Progress
Industry Grading
Apply
Grants
Competition
Appl
y Lo
ans
Estimation Income Tax
Appraisal
Planning
To Make A Decision
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Use The Reports
● Diagnosis/ Review● Estimate/ Modeling● Control & Check● Others
educational: free distribution
“With analytic skills to understand position, performance, & future for different purposes, example reaction to an offer”“Reports are further process for record/ estimate/ modeling”
“Like bankers, to use reports to evaluate credit standing”“Track status, work in progress, cash flow management”“For statutory reporting, performance appraisal, etc”
Track Progress
Industry Grading
Apply
Grants
Competition
Appl
y Lo
ans
Estimation Income Tax
Appraisal
Planning
To Make A Decision
Why the same data presented differently in different reports?
£ ¥ € ₳ ₨$
● Know How To Read Report● See “Complete Piece of
Information”● Can Read Not Equal To
Can Interpret (Techniques)○ Top-down or other directions○ Tools for Interpretation○ Scenarios; Framing; Position ○ Formula versus objective○ 3 Levels Framework○ Many More ...
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Reports Interpreting Skills
You interpret
or guess?
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● You know whether the report is useful or not
● You understand the basic structure of the financial report
● You know different types of reports
● You know & why how the reports are presented
● Not just can read, you can interpret
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Are You On Track?
Look For Next Presentation: Finance For Non-Financial
Personnel - Part 5
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For more information: www.3cthinktank.com
8 presentations altogether, if you cannot find all the links, kindly email [email protected] to request
All the 8 presentations are the overview, PLEASE email us if you like to get more benefits from them.