Professional Documents
Culture Documents
Management
MONEY IS THE
BLOOD OF
BUSINESS.
What is Financial
Management?
3 © Marc Lauder
HELLO!
I am Jayden Smith
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1.
Sources of Funds
Where do we get out money at first?
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“ Continuous
Funds are needed for expenditure, continues
flow of business activity, and expansion.
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“
Capital
The money that will be allocated by the entrepreneur to
establish a business
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“
Internal External
Family and Friends
From own pocket (personal Loans & Collateral
savings) Grants
Investors
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Factors affecting
Estimation of Revenue
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FINANCIAL
STATEMENTS
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1. Statement of Financial Position (B.Sheet)
2. Income Statement
P 1,540,000
Whoa! That’s a big number, aren’t you proud?
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We have a small office located on a
not so developed province.
P 800,000
P 10,000/month
We bought dozens of equipment for
P 500,000
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Tesla Selling Price
Sales/revenues
Gross profit
Net profit
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Net profit
Tesla
Kiddie Cars
Cost of Goods
Steel (P50/kg)
Plastic (P70/kg)
Aluminum
(P120/kg)
Rubber (P80/kg)
Glass
(P1,500/sheet)
Selling Price
Total
P 74,000
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Tesla
Kiddie Cars
Operating Exp
Payroll
4 Employees
H20,
Utilities Electricity,
Internet
Rent
Administrative and
General Expenses
Total
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We sold 3 units of Tesla Kiddie Car…
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COMPANY NAME
INCOME STATEMENT
FOR THE YEAR/MONTH ENDED ______
Sales/revenues
Gross profit
Net profit
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Net profit
TESLA KIDDIE
INCOME STATEMENT
FOR THE YEAR/MONTH ENDED DECEMBER 2018
Sales/revenues
Gross profit
Net profit
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Net profit
╺ It represents the sales amount – in either unit
(quantity) or sales terms – that is required to
cover total costs, consisting of both fixed and
variable costs to the company.
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Which among the expenses
are fixed and variable?
Cost of Goods
Steel
(P50/kg)
Plastic
(P70/kg)
Aluminum
(P120/kg)
Rubber
(P80/kg)
Glass
(P1,500/sheet)
Cost of Goods Sold
Total Are definitely VARIABLE
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Payroll
RENT 10,000
Utilities
ADMIN AND
8,000
Rent GENERAL
EXPENSE
Administrative and
General Expenses
TOTAL 122,500 9,500
Total
𝑭𝒊𝒙𝒆𝒅 𝑪𝒐𝒔𝒕
𝑩𝑬 =
𝑺𝒆𝒍𝒍𝒊𝒏𝒈 𝑷𝒓𝒊𝒄𝒆 − 𝑽𝒂𝒓𝒊𝒂𝒃𝒍𝒆 𝑪𝒐𝒔𝒕
B.E
Computation 𝟏𝟐𝟐, 𝟓𝟎𝟎𝒑𝒉𝒑
𝑩𝑬 =
𝟕𝟒, 𝟎𝟎𝟎 𝒑𝒉𝒑 − 𝟗, 𝟓𝟎𝟎𝒑𝒉𝒑
Sales/revenues
Gross profit
Net profit
Net profit
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In case you find the break-even units to be hard to achieve,
Then your price should adjust in order to still achieve breakeven.
Example, what if you can only sell 1 unit of kiddie car a month
How much should be its price?
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CASH FLOW STATEMENT
Outflows:
╶ Purchase of property or asset
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FINANCING ACTIVITIES
• Payment of dividends
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“
Cash Flow from Operations
Cash Flow from Investment
Cash Receipts P 222,000
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LIABILITIES? present obligations of
transactions or events
the firm from past
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EQUITY? the excess of firm’s assets over the firm’s
liabilities.
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TESLA KIDDIE
STATEMENT OF FINANCIAL POSITION
AS OF NOVEMBER 2018
ASSETS LIABILITIES
TOTAL TOTAL
OWNER’S EQUITY
TOTAL
THANKS!
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