Session 1-1 Managing Your Year-End Financial Lab Activity - 1

Session 1-1

Thursday, October 12 8:30am – 10:00am Room 614

Session 1-1

Sage 300 CRE: Managing Your Year-End Financials – Lab Activity

Presented By: Kathy Lewis KLC Vision

Credits/Revision History

• Original Author(s): • Revised Date: • Major Revisions Include:

o

Session 1-1 Managing Your Year-End Financial Lab Activity - 2

Lab Activity – Creating a Working Capital Calculation and Ratio

Setting up an Accumulator

Accumulators allow for addition and subtraction of listed account ranges and field types. Most often used to setup columns for % of sales or % change. To accomplish a % of sales you need to use both accumulators and expressions.

Session 1-1 Managing Your Year-End Financial Lab Activity - 3

Setting up Expression

Expressions allow for addition of formulas as a column. These formulas can then include fields and accumulators.

Combining Expressions & Accumulators

Session 1-1 Managing Your Year-End Financial Lab Activity - 4

Note: Must complete due diligence to check all formulas to be sure they are calculating correctly on financial statement!!!

Ratio Financial Statement Creating ratios on a financial statements requires the use of cell overrides in combination with accumulators and expressions. Create a working capital calculation: First create accumulators to group Current Assets and Current Liabilities account ranges. For Current Assets use account ranges 1001-1601 and select the current balance field For Current Liabilities use account ranges 2001-2305 and select the current balance field

Session 1-1 Managing Your Year-End Financial Lab Activity - 5

Open the balance sheet design – File – Open – BalAccr.fsd. What is the very next thing you should do? Save as a new design name!!! Then go to the end of the document and insert a page break. Design – Insert – Page Break. Next, go to Design – Insert – Amount. On the account range use 1001-3010. Change the itemize/summarize to Summarize on one line and give it a description putting in the best practices amount or your company goal as well. You will likely need to abbreviate some of the letters to make it all fit.

Session 1-1 Managing Your Year-End Financial Lab Activity - 6

Choose Cell overrides

Select the column (#3 current balance) you want to place the working capital calculation in and check the override column field and then choose the expression button.

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Name the expression Working Capital and then change the field type to Accumulators, pick the “Current Assets” accumulator you created earlier and subtract then pick the “Current Liabilities”. Select ok when complete.

Cell overrides appear on the financial statement as a cell with a dotted box around it.

Think you got the steps down, now try creating the working capital ratio. Create a debt to equity ratio: Start by creating two accumulators one for Total Liabilities and one for Total Equity For Total Liabilities use account ranges 2001-2403 and current balance For Total Equity use account ranges 3001-3010 and current balance

Session 1-1 Managing Your Year-End Financial Lab Activity - 8

Then on the financial statement go to Design – Insert –Amount and hit cell override. Choose the column you wish to override and check the cell override box and hit the expression button.

Now feel free to go and try to create some of the other ratios we learned about in the session today.

Session 1-1 Managing Your Year-End Financial Lab Activity - 9

Other Helpful Tips

FS – Design – Design Options allows you to set page orientation, shrink to fit, and give the design a new Description which is helpful when running the design from GL. You can also set the rounding properties in the rounding tab.

Preparing for Year End Financials Worksheet

The May Construction Managed Rite Construction

Working Capital

Current Assets

Less Current Liabilities

= Working Capital

Bonding Capacity (factor 10)

Current Ratio

Current Assets

/Current Liabilities

= Current Ratio

Debt to Equity

Total Liabilities

/Total Equity

= Debt to Equity

Revenue to Working Capital

Annual Revenue 4,000,000 3,700,000

/Working Capital

= Revenue to Working Capital

Days in Accounts Receivable

Accounts Receivable

/(Annual Revenue/365)

=Days in Accounts Receivable

AR to AP

Accounts Receivable

/Accounts Payable

=AR to AP

The May ConstructionBalance SheetMay 31, 2011

Assets

Current Assets1001 Cash $ 1,047,3451005 Petty Cash 3001201 Accounts Receivable 1,052,0861203 Draws Receivable 48,0251204 Retainage Receivable 139,6321205 Due From Other Timberline 1,104,3611400 WIP - Parts 1,3571410 WIP - Labor 1,3271420 WIP - Miscellaneous 871501 Cost in Excess of Billings 15,3231601 Parts Inventory (567,392)Total Current Assets $ 2,842,451

Long Term Assets1701 Investments $ 872,5121802 Buildings 82,8581803 Furniture & Fixtures 100,5281804 Motor Vehicles 226,4881805 Construction Equipment 126,0751902 Accum Depreciation - Build (56,558)1903 Accum Depreciation - Furni (80,309)1904 Accum Depreciation - Vehic (108,383)1905 Accum Depreciation - Equip (107,431)Total Long Term Assets $ 1,055,780

Total Assets $ 3,898,231

Confidential: For Internal Use Only

The May ConstructionBalance SheetMay 31, 2011

Liabilities and Equity

Current Liabilities2001 Accounts Payable $ 39,3672002 Notes Payable 25,0002003 Subcontracts Payable 360,5092004 Retainage Payable 9,7542005 Tax Payable 3,6552007 Due To Other Timberline Co 1,104,3602008 Credit Card Payable 7,1652050 PO Accrual 882101 Union Payable 88,4522102 Federal Income Tax Withhel 4,3652103 State Income Tax Withheld 1,0272104 FICA - Employee 2,2682105 FICA - Employer 2,2692106 Health Insurance 9,8202107 Workers' Comp Insurance 30,0002108 Unemployment Insurance 5082109 Other Withholdings 129,3622301 Accrued Salaries/Wages 5,7232302 Accrued Vacation/Sick 3,1502304 Accrued Disability Insuran 5672305 Accrued 401K 14,421Total Current Liabilities $ 1,841,830

Long Term LiabilitiesLong Term Liabilities

Total Liabilities $ 1,841,830

Equity3001 Owners' Equity $ 1,647,9803010 Retained Earnings 466,532

Net Income (65,170)Total Equity $ 2,049,342

Total Liabilities & Equity $ 3,891,172

Confidential: For Internal Use Only

The May ConstructionIncome Statement

For the Period Ended May 31, 2011

Current CurrentAccount Title Activity Balance

Income4001 Income $ 295,395 $ 1,640,1704002 Discount Income 89 1244003 Other Income 1,950 1,950

Total Income $ 297,434 $ 1,642,244

Cost of Sales5001 Cost of Sales - Labor $ 89,957 $ 354,3845002 Cost of Sales - Subcontract 49,805 97,9305003 Cost of Sales - Materials 91,076 344,4965004 Cost of Sales - Equipment 56,709 735,7645005 Cost of Sales - Other 832 38,338

Total Cost of Sales $ 288,379 $ 1,570,912Gross Margin $ 9,055 $ 71,332

Expenses6001 Executive Compensation $ 6,658 $ 69,2986002 Admin Compensation 2,528 33,0326003 Field Wages 74 1,0166005 Other Compensation 1,115 12,4406006 Employee Benefits 783 8,2896102 Auto/Truck Expense (547) 1,0456111 Misc Expenses 766112 Office Supplies 96 4526113 Postage 29 4406114 Other Expenses 85 856115 Rent 7,0006117 Supplies/Tools 500 5006118 Taxes 46119 Telephone 334 1,697

Total Expenses $ 11,655 $ 135,374

Other IncomeTotal Other Income

Net Income (Loss) $ (2,600) $ (64,042)

Confidential: For Internal Use Only

Bonding Report M

anaged Rite C

onstruction

Period = 6

6-1-8-21

10/08/12

12:14 PM

Supervisor 1 of 1

Page

Bonding R

eport

10/08/2012 R

eport

Job#Current

CurrentEstim

ateCost

%Profit

EarnedBilled

UnderCost to

Remain

ContractBudget

Profitto Date

Budgetto Date

to Dateto Date

BillingCom

pleteContract

1 - Historical Job C

osts *293.19

-293.19293.19

100.00-293.19

186 - William

s Post Office

553,499.00468,432.00

85,067.00372,263.17

79.4767,602.74

439,865.66540,551.80

-100,686.1496,168.83

12,947.20201 - Trappen M

otel1,970,916.00

1,944,227.8026,688.20

535,645.1327.55

7,352.60542,987.36

755,639.12-212,651.76

1,408,582.671,215,276.88

207 - Wood Elem

entary School2,796,181.38

2,381,012.00415,169.38

550,693.7923.13

96,028.68646,756.75

750,030.57-103,273.82

1,830,318.212,046,150.81

215 - Jimenez Burrito #8

380.00379,535.62

-379,155.62144,553.50

38.09-144,420.38

144.74144.74

234,982.12380.00

216 - Jimenez Burrito #10

220 - Lamb Shoes

42,455.84-42,455.84

6,770.7815.95

-6,771.714,306.89

-4,306.8935,685.06

-4,306.89221 - Bike Path for R

te 66209,774.00

158,478.2551,295.75

4,550.002.87

1,472.196,020.51

6,020.51153,928.25

209,774.00222 - Big R

edwood Tree H

otel2,005,000.00

1,739,800.46265,199.54

192,339.8811.06

29,331.07221,753.00

221,753.001,547,460.58

2,005,000.00223 - M

ain Street Post Office

553,737.74472,409.21

81,328.53472,409.21

553,737.74224 - W

alking Shoes Shop55,300.00

44,068.7911,231.21

-5,000.005,000.00

44,068.7960,300.00

8,144,788.127,630,713.16

514,074.961,807,109.44

50,302.001,857,528.02

2,045,528.38-188,000.36

5,823,603.726,099,259.74

* Total Costs exceed budget. C

osts are used for report.

Balance Sheet

Period = 6, At June 2011

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10/08/12

1 Page 12:24 PM Report 10/08/12 Supervisor

Balance Sheet

Managed Rite Construction

AssetsCurrent Assets

General Checking $78,520.35Payroll Checking 940.81Field Checking 302.86Check Clearing 0.00Visa/MC Clearing Acct 0.00Voucher Clearing 0.00Petty Cash 300.00Savings 2,113.18Bank Transfer Clearing 0.00Contract Receivables 394,248.82AR - Startup 0.00(Service) 1,862.50Bad Debt Allowance (15,000.00)Underbillings 0.00(Inventory) 9,475.40Inventory Startup 0.00Payroll Advances 0.00Prepaid Health Ins 4,655.15Plan Deposits 450.00Refundable Deposits 1,900.00

Total Current Assets: $479,769.07

WIP Assets

(Spec-Payroll) 0.00

Total WIP Assets: 0.00

Long Term Assets

(Heavy Equipment) 74,081.00Vehicles 109,571.76Shop Equipment & Tools 42,845.64Office Equipment 45,523.30Software 15,786.75Furniture & Fixtures 19,960.21

Balance Sheet

2

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10/08/12

Page 12:24 PM Supervisor Report 2-2-0-21 10/08/12

307,768.66Total Long Term Assets:

Accumulated Depreciation

(Accum Dep'n Heavy Equipment) (48,458.59)Accum Dep'n Vehicles (70,606.54)Accum Dep'n Shop Eq/Tools (24,960.50)Accum Dep'n Office Equipment (30,324.50)Accum Dep'n Furniture & Fxt (14,054.50)

(188,404.63)Total Accumulated Depreciation:

Net Long Term Assets: 119,364.03

Other Assets

Prepaid Taxes 0.00PPD Liability Insurance (1,359.47)Work Comp Deposit 5,725.00Note Receivable - Shareholder 10,000.00

Total Other Assets: 14,365.53

Total Assets: $613,498.63

LiabilitiesCurrent Liabilities

Trade Accounts Payable 424,898.07AP - Startup 0.00Vendor Workers Comp Payable 0.00Overbillings 188,000.36Sales Tax Payable 112.50Fica/FIT Payable 0.00State Payroll Taxes Payable 4,298.61Workers' Compensation Payable 5,543.05Futa Payable 815.41Child Support Payable 420.00401K Payable 3,051.71Union 20 Benefits Payable 0.00Union 20-Union Dues 0.00Accrued Payroll 0.00Line of Credit Payable 40,000.00Corporate Federal Tax Payable 0.00Corp State Income Tax Payable 0.00Current Portion Of L/T Debt 0.00

Balance Sheet

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10/08/12

Page 12:24 PM Supervisor Report 2-2-0-21 10/08/12

Total Current Liabilities: 667,139.71

Long Term Liabilities

(Heavy Equipment Loan) 18,356.73Vehicle Loans 44,489.95Shareholder Payable 0.00L/T Debt Less Current Portion 0.00

Total Long Term Liabilities: 62,846.68

Total Liabilities: 729,986.39

EquityEquity/Capital

Capital Stock 25,000.00Additional Paid In Capital 0.00Other Paid In Capital 0.00Retained Earnings 49,245.16Startup Clearing 0.00

74,245.16Subtotal Equity/Capital:

Current Profit (Loss): (190,732.92)

Total Equity/Capital: (116,487.76)

Total Liabilities + Equity: $613,498.63

Income Statement

Period 1 to 6, For 6 Months Ending June 2011

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1 Page 12:31 PM Report 10/08/12 Supervisor

Income Statement

Managed Rite Construction

Operating Income

Contract Income $2,050,528.38Service Income 1,500.00Resale 250.00Discounts Given (212.02)Finance Charge Income 0.00Interest Income 1,145.22Over/underbillings (203,795.57)Discounts Earned 39.74

Total Operating Income: $1,849,455.75

Direct Expense

Material 726,305.01Equipment Expense 7,860.00Subcontracted 821,245.79Other Job Expense 2,053.18Direct Labor 151,022.16D/L Payroll Taxes 22,079.58D/L Workers' Compensation 20,796.47D/L Benefits 42,552.67D/L Liability Insurance 10,181.60D/L Small Tool Exp 3,012.88Non-tax Per Diem 0.00

1,807,109.34Total Direct Expense:

Equip/Shop Expense

Equipment Labor 0.00Shop Payroll Taxes 0.00Shop Workers' Comp 0.00Shop Benefits 0.00Shop Liability Ins 194.00Shop Small Tool Expense 0.00Equipment Interest Expense 982.97Equipment Depreciation Expense 2,956.24(Equipment Repair) 2,667.69Equipment Fuel 181.75(Equipment Use Contra) (4,730.00)

Income Statement

2

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10/08/12

Page 12:31 PM Supervisor Report 2-3-0-21 10/08/12

2,252.65Total Equip/Shop Expense:

Total Direct & Equip/Shop Expense: 1,809,361.99

40,093.76Gross Profit:

Overhead Expense

Rent 11,400.00Office Supplies 8,533.11Utilities 663.45Telephone 1,912.79Cell Phone / Paging 3,125.66Bank Charges 210.00Postage & Freight 1,121.75Janitorial 1,227.23Advertising & Promotion 2,099.85Accounting Fees 7,030.00Legal Fees 550.00Consulting Fees 1,680.00Travel, Meals 6,728.13Entertainment 3,762.25Dues & Subscriptions 2,334.90Continuing Education 3,015.00Charity Donations 1,200.00Maintenance & Repair 1,636.41General Insurance 750.00Taxes & Licenses 1,037.87Interest Expense 2,529.43Bad Debt Expense 0.00Inventory Offset Account 0.00Plan Fees 0.00Bonding Fees 0.00Warranty Work 1,015.00Estimating Labor 22,000.02Overhead Labor 56,115.43O/H Payroll Taxes 5,926.62O/H Workers' Compensation 2,587.36O/H Benefits 7,442.00O/H Liability Insurance 1,513.06O/H Small Tool Exp 0.00O/H Per Diem 0.00Vehicle Expenses 3,630.35Vehicle Fuel 6,725.36Small Tools/Shop Supplies 64.11Other Shop Expense 0.00Depreciation Expense 14,511.70Suspense/clearing 1.84

Income Statement

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Page 12:31 PM Supervisor Report 2-3-0-21 10/08/12

184,080.68Total Overhead Expense:

Administrative Expense

Admin Salaries 38,461.50Admin Payroll Taxes 4,050.00Admin Workers' Compensation 0.00Admin Benefits 4,234.50Admin Liability Insurance 0.00Admin Small Tool Exp 0.00Admin Per Diem 0.00

46,746.00Total Administrative Expense:

Total Indirect Expense: 230,826.68

(190,732.92)Income from Operations:

Other Income

Gain On Sale Of Assets 0.00Investment Income 0.00Other Income 0.00

Total Other Income: 0.00

(190,732.92)Net Income Before Tax:

After Tax Expense

Federal Income Tax Expense 0.00State Income Tax Expense 0.00Tax Penalties 0.00

Total After Tax Expense: 0.00

$(190,732.92)Net Income: