Uploaded byrossymathur2
PPTX, PDF212 views

Finance for Non Finance Professionals.pptx

The workshop by Prof. Rossy Mathur aims to educate non-finance professionals on key financial and accounting concepts, emphasizing the importance of financial management for entrepreneurs and professionals seeking career advancement. Participants will learn to understand financial statements, budgeting, working capital management, and the implications of financial data on business decisions. The training will enhance employable skills relevant to various sectors, including banking, finance, teaching, and business process outsourcing.

Download to read offline
Finance for Non Finance Professionals PROF ROSSY MATHUR M.PHIL, MBA, DOUBLE M.COM, PGDMM, PGDIBO, PGDHE, PGDHRM, B.COM FINANCE & MARKETING, MBA @ IICMR, PUNE
Objectives of the Workshop 1. To get the participants acquainted with various accounting and financial terms. 2. To assist existing and potential entrepreneurs to appreciate the usefulness of MONEY in business 3. To provide a clear insight into the fundamentals of finance and explain procedures. 4. To provide an understanding of financial reports such as Profit and Loss and Balance Sheets, Cash Flow Statement & Budgeting. 5. To show how to read into key financial reports defining the issues and areas that matter.
What Participants will learn Understand Key Financial Terms  Understand why accounts are prepared?  Understand what is Financial Management and how it is different from Accounting?  Understand What are Financial Statements and how it is useful for Decision Making?  Understand why knowledge Financial Management is essential to grow up in the Organisational Chart?  Understand Budgeting  Understand what is Working Capital Management
Career opportunities in IT + Knowledge in finance Participants can acquire employable skills for life and virtually there is no retirement. They can be employed in Banks, Mutual Funds, Stock Market, Currency Market, Commodity Market, Teaching, KPOs, and BPOs etc. in BFSI (Banking Financial Services & Insurance) sector. Why you should we train in finance ? • Every decision in an organization revolves around Finance. • If you are an entrepreneur, its crucial that you have knowledge of Financial Matters to manage your business effectively. • If you are head of IT department like Production / Purchases / Sales, etc and if you aspire to grow in your hierarchy, financial knowledge is must.
Agenda day 1 Explaining Various Terms & Concepts Explaining Various Formats of Financial Statements Financial Quiz Assignment Agenda day 2 Discussing Financial Statements Explaining Budgets Activity Financial Quiz
Agenda day 3 Activity  Case Study – Financial SWOT analysis of a company Discussing Financial Statements Explaining Budgets  Group Discussion  Presentation
• All major decisions are Driven by Financial information • Market , Products & Services • Projects have many financial implications based on the decision and actions taken by various departments • Marketing Dept, IT Dept, HR dept etc • Finance can be intimediating & confusing for those not financially trained • My objective is to reduce your financial confusion & improve decision making & Confidence
Basic Accounting & Financial Terms
Journalization Book Keeping & Accountancy Original source documents Stage 1 – recording in the Books of original entry
Stage 2 Ledgers & Trial Balance Personal a/c Debit (Dr)the receiver of benefit Credit (Cr)giver of benefit Real a/c Debit (Dr)what comes in Cerdit (Cr) what goes out Nominal a/c Debit all expenses, Losses Credit all income & gains
Trial balance Debit Balance Amt. ` Credit Balance Amt. ` Stock (1/4/2018) 65,000 General Reserve Capital: Daya Kshama Creditors R.D.D. Sales Outstanding Wages Purchases 14,500 Bills Receivable 28,000 Wages and salaries 9,000 1,60,000 Sundry Debtors 1,32,500 1,20,000 Bad debts 1,000 98,000 Purchases 1,48,000 1,800 Motor car 68,000 2,85,500 Machinery 1,14,800 Audit Fees 1,200 Sales Return 2,000 Discount 2,300 Building 75,000 Cash at Bank 12,000 10% Investment 20,000 Advertisement(Paid for 9 months) 4,500 Royalties 3,000 6,86.300 6,86.300
Trading a/c Particulars Amt. (`) Amt. (`) Particulars Amt. (`) Amt. (`) To Opening Stock xxx By Sales xxx To Purchases xxx Less : Return Inward xxx xxx Less : Return Outward xxx xxx To Carriage Inward xxx By Goods lost by fire xxx To Freight xxx By Goods lost by theft xxx To Dock Charges xxx By Goods distributed To Custom Duty xxx as free samples xxx To Wages Productive xxx By Goods lost in Accident xxx Manufacturing Wages xxx By Goods withdrawn by To Wages & Salaries xxx Partners xxx To Import Duty xxx By Closing Stock xxx To Coal/Coke/Gas/ By Gross Loss c/d xxx Motive Power/Oil/ Water /Grease xxx To Royalty on Purchase/Production xxx To Primary Packing Charges xxx To Factory Lighting & Heating xxx To Factory Rent & Rates xxx To Factory Insurance xxx To Works Manager's Salary xxx To Gross Profit c/d xxx xxx xxx
Balance sheet Liabilities Amt. ` Amt. ` Assets Amt. ` Amt. ` Capital Accounts : A B C Partners Current A/c (Credit Balance) General Reserve Profit & Loss A/c Loan on Mortgage Bank Loan Loan from Partners Bills Payable Bank Overdraft Sundry Creditors Add/Less : Any other adjustment Less : Provision for Discount on Creditors Outstanding Expenses Income received in Advance Provision for Taxes Goodwill Land and Building Less : Depreciation Plant & Machinery Less : Depreciation Furniture & Fixtures Less : Depreciation Equipment Less : Depreciation Delivery/Motor Van Less : Depreciation Leasehold / Freehold Premises Less : Depreciation Patents Less : Depreciation Loose Tools Less : Depreciation Investments Stores & Spare Parts Less : Depreciation Prepaid Expenses Outstanding Incomes Loans and Advances Closing Stock Sundry Debtors + Any adjustments Less : Bad Debts(New) Less : Provision for Discount on Debtors Insurance Claim Receivable Bills Receivable Cash in Hand Cash at Bank Partners Current A/c (Credit Balance)
Basic Accounting & Financial Terms Assets and liabilities are accounting terms that help businesses identify income-producing items as well as things that can take away from company profits. Businesses also refer to assets and liabilities as "profits" and "losses." Assets represent a company's resources while liabilities represent a company's obligations.
Capital and Drawings: a) Capital : The total amount invested into the business by the owner is called capital. Excess of assets over the liabilities is also called as capital. The equation for this is : Capital = Assets – Liabilities Capital is a liability of the business as this amount is payable by the business enterprise to the owner at the time of closure of the business. b) Drawings : The amount of cash or value of goods, assets, etc., withdrawn from the business by the owner for personal use called as drawings. E.g. : A proprietor pays colleges fees of his son, or pays for his medical expenses, mobile bills etc, from the business.
Debtors and Creditors: a) Debtor : A person who has to pay to the business for getting goods and services on credit is known as debtor. A debtor is a person who owes money to the business. b) Creditor: A person to whom business has to pay for getting goods or services on credit is known as creditor. A creditor is a person to whom business owes money. c) Bad Debts : An irrecoverable amount from a debtor is known as "Bad Debts". It is a revenue loss to the business.
Accounting Year: It is the period of 12 months for which accounts are maintained and closed by the proprietor. Earlier the proprietors were following any accounting year i.e. calendar year , or financial year or any other year as per tradition. But now for income tax purpose an accounting year starts on 1st April and end on 31st March. At the end of accounting year a proprietor has to prepare Trading account, Profit and Loss account and Balance Sheet to find out the financial position of the business.
Profit or Loss a) Profit : When the selling price of goods is more than the cost price it is a profit. Profit increases the capital of the business. e.g.If goods are sold for Rs50,000/- and all expenses during the period amounted to ` 30,000/- then the profit is `Rs20,000/- b) Loss : When cost price of goods is more than its selling price it is a loss. Loss decreases the capital of business e.g If goods are sold for `Rs50,000/- and all expenses during the period amounted to ` 60,000/, then the loss will be Rs10,000/- c) Income: It is revenue arising as a result of business transactions. It is the amount receivable or realised from services provided and earnings from interest, dividend, commission, etc. d) Revenue: It is income that a business has from its normal business activities usually from the sale of goods and services to customer.
1Assets, Liabilities, Net Worth: i) Assets : Any physical thing or right owned that has a monetary value is called as an asset. The ownership of the Asset must be with business unit. E.g Land, Goodwill, Patents, Computers etc. ii)Types of Assets: a) Fixed Assets/Non current Assets : The assets which give long term benefit to the business are known as fixed assets e.g Land and Building, Plant & Machinery, Goodwill etc. These assets may be tangible or intangible. b) Current Assets : Assets which are held in the business for the operating year and can be converted into cash very easily are called as current assets. e.g Debtors, Bills Receivable Cash in Hand, Cash at Bank, Stock etc. c) Fictitious Assets : These assets are not represented by tangible possession or property. They are imaginary assets but do not have any realisable value. e.g Deferred revenue expense like advertisement paid for 4 years. iii)Liabilities: Amount payable by the business to others is known as liability. It is a debt or amount due from the business to others for the benefit received by the business unit. e.g Loan taken, Creditors, Bank Overdraft, Outstanding Expenses etc. .
iv)Types of Liabilities: a) Fixed Liabilities : One of the major source of funds in the business is fixed liabilities. It may be in the form of capital, secured loans, long term loans from banks and from financial institutions etc. b) Current Liabilities: Short term liabilities payable within a year are called current liabilities. Current liabilities arise in the regular current operations of the business. These liabilities are not normally secured. E.g. Creditors, Bills Payable etc. v) Net worth or Owners Equity or Capital: The amount or funds provided by the proprietor in the business is called as “Capital” as well as the excess of assets over liabilities of the business is also known as “Capital” or “Net Worth”. Net worth includes Capital and Reserves. Capital can be in the form of cash or in kind
There are two important Financial Statements. (1) Balance Sheet / A Position Statement (2) Profit and Loss A/c / An Income Statement Financial Statement analysis includes two aspects (a) Analysis of Data : It provides methodical classification of financial statement (b) Interpretation of Data : It means explanation of meaning and significance of data. Thus the objectives of Financial Statement is to provide information about the financial posi- tion, performance and changes in financial position of an enterprises that is useful to wide range of users in making economic decisions.
Analysis of Financial Statements. Methods for comparisons of Financial Statement : (1) Comparative Balance Sheet Comparative Balance Sheet is the study of the trend of the same items and compared items in two or more Balance Sheet of same business enterprise of different dates.” Such comparison throws light on changes and progress made in respect of each item of Assets and Liabilities. The main purpose of Comparative Balance Sheet is to measure the short term and long term solvency position of business. Formula used to find % Increase or Decrease = 𝐀𝐦𝐨𝐮𝐧𝐭 𝐨𝐟 𝐀𝐛𝐬𝐨𝐥𝐮𝐭𝐞 𝐂𝐡𝐚𝐧𝐠𝐞 𝐀𝐦𝐨𝐮𝐧𝐭 𝐨𝐟 𝐏𝐫𝐞𝐯𝐢𝐨𝐮𝐬 𝐘𝐞𝐚𝐫 x 100
Comparative Balance sheet of Noha Textiles Ltd. as on 31.3.2018 & 31.3.2019. Particular 31.3.2018 (Rs) 31.3.2019 (Rs) Absolute increase or decrease (Rs) Percent increase and decrease Fixed Assets 12,00,000 18,00,000 6,00,000 50% Less : Accumulated depreciation 2,00,000 3,00,000 1,00,000 50% (A) Net Fixed Assets 10,00,000 15,00,000 5,00,000 50% Current Assets 5,00,000 9,00,000 4,00,000 80% Less : Current Liabilities 2,00,000 4,00,000 2,00,000 100% (B) Working Capital 3,00,000 5,00,000 2,00,000 66.67% (C) Capital Employed 13,00,000 2,00,000 7,00,000 53.55% (D) Less : 12% Bank Loan -5,00,000 -8,00,000 3,00,000 60% (E) Share holders Fund ( C-D) 8,00,000 12,00,000 4,00,000 50% Share Capital 5,00,000 10,00,000 5,00,000 100% Reserves 3,00,000 2,00,000 (1,00,000) 33.33% Share holders fund 8,00,000 12,00,000 4,00,000 50%
Comments : The analysis of above comparative Balance Sheet gives the following conclusions.  Total fixed assets have increased by Rs.6,00,000, 50% increase.  Purchased of fixed assets was financed partly by issue of shares for Rs.5,00,000 and partly by increase in loan.  Share Capital has increased by Rs.5,00,000 i.e. 100% increase it has strengthned in financial position of the company.  Reserve have decreased by Rs.1,00,000 i.e. 33.33% decrease, which reflect loss in the business during the current year.  Current Liabilities have increased by Rs.2,00,000 i.e. 100% increase but current Assets have also increased by Rs. 4,00,000 i.e. 80% increase. It has resulted in the increase of working capital of the firm by Rs. 2,00,000 which has been financed by increase in loan.
Comparative Balance Sheet of Varun Company Ltd. as on 31.3.2019 and 31.3.2020 Particulars 31.3.19 (Rs) 2 31.3.20 (Rs) 3 Absolute Change (Rs) 4 Percentage Change I. Sources of Funds a. Share capital 2,50,000 3,70,000 1,20,000 48% Increase b. Reserves & Surplus 60,000 1,00,000 40,000 66.67% Increase (A) Net Worth 3,10,000 4,70,000 1,60,000 51.61% Increase B. Borrowed Funds a. Secured Loan 1,00,000 1,60,000 60,000 60% Increase b. Unsecured Loan 90,000 1,40,000 50,000 55.55% Increase Total Borrowed Fund 1,90,000 3,00,000 1,10,000 57.89% Increase Total Fund Available (A + B) 5,00,000 7,70,000 2,70,000 54% Increase II. Application of Funds A. Fixed Assets 3,50,000 5,70,000 2,20,000 62.86% Increase B. Investment 1,20,000 1,70,000 50,000 41.67% Increase C. Working Capital 1. Current Assets 1,30,000 1,20,000 (10,000) (7.69%) decrease Less : 2 Current Liabilities 1,00,000 90,000 (10,000) (10%) decrease Working Capital (Current Asset Less Current Liabilities) 30,000 30,000 Nil Nil Total Fund Applied (A + B + C) 5,00,000 7,70,000 2,70,000 54% Increase
Budget  A budget is a formal statement of estimated income and expenses based on future plans and objectives. In other words, a budget is a document that management makes to estimate the revenues and expenses for an upcoming period based on their goals for the business.  What does it mean to create a budget?  Budgeting is the process of creating a plan to spend your money. This spending plan is called a budget. Creating this spending plan allows you to determine in advance whether you will have enough money to do the things you need to do or would like to do. Budgeting is simply balancing your expenses with your income.  A budget is used to forecast the financial results and financial position of an entity for a future period. It is used for planning and performance measurement purposes, which can involve spending for fixed assets, rolling out new products, training employees, setting up bonus plans, controlling operations, and so forth.
Personal budget  A personal budget or home budget is a finance plan that allocates future personal income towards expenses, savings and debt repayment. Past spending and personal debt are considered when creating a personal budget. There are several methods and tools available for creating, using and adjusting a personal budget. For example, jobs are an income source, while bills and rent payments are expenses.  A personal budget or home budget is a finance plan that allocates future personal income towards expenses, savings and debt repayment. Past spending and personal debt are considered when creating a personal budget. There are several methods and tools available for creating, using and adjusting a personal budget. For example, jobs are an income source, while bills and rent payments are expenses.
Let’s get started on creating your perfect Personal budget. Follow the following steps for creating a personalized budget that could save you several bucks at the end of each month: Know Your Living Expenditures By living expenditures, I mean the house rent, maintenance bills, utility bills, bills, and mortgage. So, do not add extra expenses, such as your monthly expenses that you cannot do without. Calculate Your Leisure Expenses  Examples of such expenses are fine dining, fitness classes, gym, library fees, subscriptions, etc Keep Your Financial Goals Firm One important aspect of creating a personal budget is prioritizing your left with after excluding taxes, discretionary expenditures, and living expenses execute your financial goal
Repaying Debt The worst thing about debt is that the more you delay it, the more interest will debts, such as student loans, home loans, or high credit card loans, have a your debt should be the top priority by default. Building Up an Emergency Fund saving a percentage of your income, such as 5 or 10 percent. It may take you You must save enough to have 6-month living expenses in your bank account. Contribute to Retirement Account Start thinking about retirement plans early. The best retirement plan offers a (typically 3% to 5%) and huge tax benefits. Try to contribute to your retirement Invest for Future Financial Stability
Consider The 50/30/20 Budget Trick Here’s how it works: •50% of your take-home salary should be spent entirely on your needs or daily living expenses. •30% to wants that includes fun or entertainment, such as Netflix membership, gym fee, dinner and •20% for your savings, which includes repaying debts, setting up an emergency fund, or investing.
Template of Household Budget

More Related Content

PDF
GM 5 EU 5 Working With Finance. Management
byMaxwellChuma2
 
PPTX
Book Keeping and Accounting (Basic Level)
byYogesh Mangalekar
 
PPT
ACCOUNTING PPT BHUPENDER PARTAP contains class 11 accounts
bykaloma2
 
PPT
Basicsofaccounting 120223232525-phpapp01
bygogulraj25
 
PPT
Basicsofaccounting 120223232525-phpapp01
bySandipShahi
 
PPT
Introducing To Financial Accounting 2
bySandipShahi
 
PPT
Basicsofaccounting 120223232525-phpapp01
byBeinghumanSandipThakuri
 
PDF
Must Know Basic Accounting Terms in 2023 | Academy Tax4wealth
byAcademy Tax4wealth
 
GM 5 EU 5 Working With Finance. Management
byMaxwellChuma2
 
Book Keeping and Accounting (Basic Level)
byYogesh Mangalekar
 
ACCOUNTING PPT BHUPENDER PARTAP contains class 11 accounts
bykaloma2
 
Basicsofaccounting 120223232525-phpapp01
bygogulraj25
 
Basicsofaccounting 120223232525-phpapp01
bySandipShahi
 
Introducing To Financial Accounting 2
bySandipShahi
 
Basicsofaccounting 120223232525-phpapp01
byBeinghumanSandipThakuri
 
Must Know Basic Accounting Terms in 2023 | Academy Tax4wealth
byAcademy Tax4wealth
 

Similar to Finance for Non Finance Professionals.pptx

PDF
ACCOUNTING AND FINANCE. MODULE 1.pdf
byRuthPhiri17
 
PPT
basicsofaccounting-120223232525-phpapp01.ppt
byManjulagupta15
 
PPTX
Basic accounting terms
bySHIVANI CHANDEL
 
PPTX
Basic accounting terminology
byRajat Baranwal
 
PPT
Basic Accounting Terms
byDr. Bhavik Shah
 
PPTX
5 MAJOR ACCOUNTS WEEK 5.pptx
byJennifer911572
 
PPTX
5 MAJOR ACCOUNTS WEEK 5.pptx
byJenniferDeLeon51
 
PDF
Chapter 2 basic accounting terms (1).pdf
byfasni2
 
PDF
Accounting And Financial Management 1 Part I Financial Accounting
byLisa Graves
 
PPTX
Introduction to accounting
byGc university faisalabad
 
PPT
Sankar.presentation1.accountancy
byRohitbhakta
 
PDF
PDF document.pdf
byKrupalGajera1
 
PPTX
Accounting and book keeping
byVorzen Studios
 
PPT
Topic 2 financial_20statement_1_
byIdzni Zalika
 
PPT
Topic 2 financial_20statement_1_
byIdzni Zalika
 
PPTX
Must Know Basic Accounting Terms in 2023 | Academy Tax4wealth
byAcademy Tax4wealth
 
PPT
Online Accounting Software Uk
bytanuj khandelwal
 
PPT
Basic concepts of accounting
byNkanyiso Mbuli
 
PPT
basic of accounts
byGurpreetkaur838
 
PPTX
Basic Accounting Terminology.pptx
byVikash Barnwal
 
ACCOUNTING AND FINANCE. MODULE 1.pdf
byRuthPhiri17
 
basicsofaccounting-120223232525-phpapp01.ppt
byManjulagupta15
 
Basic accounting terms
bySHIVANI CHANDEL
 
Basic accounting terminology
byRajat Baranwal
 
Basic Accounting Terms
byDr. Bhavik Shah
 
5 MAJOR ACCOUNTS WEEK 5.pptx
byJennifer911572
 
5 MAJOR ACCOUNTS WEEK 5.pptx
byJenniferDeLeon51
 
Chapter 2 basic accounting terms (1).pdf
byfasni2
 
Accounting And Financial Management 1 Part I Financial Accounting
byLisa Graves
 
Introduction to accounting
byGc university faisalabad
 
Sankar.presentation1.accountancy
byRohitbhakta
 
PDF document.pdf
byKrupalGajera1
 
Accounting and book keeping
byVorzen Studios
 
Topic 2 financial_20statement_1_
byIdzni Zalika
 
Topic 2 financial_20statement_1_
byIdzni Zalika
 
Must Know Basic Accounting Terms in 2023 | Academy Tax4wealth
byAcademy Tax4wealth
 
Online Accounting Software Uk
bytanuj khandelwal
 
Basic concepts of accounting
byNkanyiso Mbuli
 
basic of accounts
byGurpreetkaur838
 
Basic Accounting Terminology.pptx
byVikash Barnwal
 

Recently uploaded

PDF
Top 47 Sites To Buy, Old Github Accounts In This Year.pdf
byContact Us-📞Telegram: @pvaservicesell 📞WhatsApp: +1 (330) 347-4342
 
PPTX
Ross Chayka: Чудовий новий світ AI: технології, бізнес, суспільство (UA)
bycontent610
 
PPTX
Thermal Energy International - Q1 2026 Earnings Call Slides
byMarketing847413
 
PDF
LCP-Corporate-Report-Autumn-2025.pdf worth a read
byHenry Tapper
 
PDF
Oleksіі Markhovskyi: Автономні роботизовані системи як формуюча складова суча...
bycontent610
 
PPTX
Tokenizing Housing Financial Empathy - StevenHeizmann ASEA.pptx
byStevenHeizmannCPA
 
PDF
THE ARCHITECTURE OF OBSOLESCENCE HOW INCREMENTALISM ENTOMBED SEARS By Olumi...
byTheta Prime Institute, Cheyenne, Wyoming, USA.
 
PPTX
QAS_Ambassador Workshop_Final Draft-32 slides.pptx
bypriyankasingh49611
 
PDF
Is it legal to buy verified Binance accounts (Personal &amp .pdf
bymarketing
 
PDF
Amazon Account Audit by Rey Benaid [Amazon PPC Expert]
byadsmgrreybenaid
 
PDF
Dr. Enrique Segura Ense Group - Serves As CEO Of Securiport
byDr. Enrique Segura Ense Group
 
PDF
Danielle Oliveira New Jersey - A Trailblazing Lieutenant
byDanielle Oliveira New Jersey
 
DOCX
The World Inside WeChat_ Understanding the Power and Purpose of a WeChat Acco...
byhoovazuh63
 
PDF
Ome John Etue - A Certified Product Leader
byOme John Etue
 
PDF
Adam and Daniel Kaplan - Successful Versatile Professionals
byAdam and Daniel Kaplan
 
PPTX
TMG - Q1 2026 Earnings Call Slides - final
byMarketing847413
 
PDF
Urbanetectonics Service Product 2018 Engineering Management
byUrbanetectonics
 
PDF
Vinawind – The Leading Electric Fan Brand in Vietnam
byJoe Nguyen
 
PDF
QNET Welcomes Convictions in Ghana Human
bybusinessweekghana
 
PDF
Top Sites to Buy Yahoo Accounts (PVA, Aged, Bulk Options) — Safe Delivery & M...
byusasmmpva
 
Top 47 Sites To Buy, Old Github Accounts In This Year.pdf
byContact Us-📞Telegram: @pvaservicesell 📞WhatsApp: +1 (330) 347-4342
 
Ross Chayka: Чудовий новий світ AI: технології, бізнес, суспільство (UA)
bycontent610
 
Thermal Energy International - Q1 2026 Earnings Call Slides
byMarketing847413
 
LCP-Corporate-Report-Autumn-2025.pdf worth a read
byHenry Tapper
 
Oleksіі Markhovskyi: Автономні роботизовані системи як формуюча складова суча...
bycontent610
 
Tokenizing Housing Financial Empathy - StevenHeizmann ASEA.pptx
byStevenHeizmannCPA
 
THE ARCHITECTURE OF OBSOLESCENCE HOW INCREMENTALISM ENTOMBED SEARS By Olumi...
byTheta Prime Institute, Cheyenne, Wyoming, USA.
 
QAS_Ambassador Workshop_Final Draft-32 slides.pptx
bypriyankasingh49611
 
Is it legal to buy verified Binance accounts (Personal &amp .pdf
bymarketing
 
Amazon Account Audit by Rey Benaid [Amazon PPC Expert]
byadsmgrreybenaid
 
Dr. Enrique Segura Ense Group - Serves As CEO Of Securiport
byDr. Enrique Segura Ense Group
 
Danielle Oliveira New Jersey - A Trailblazing Lieutenant
byDanielle Oliveira New Jersey
 
The World Inside WeChat_ Understanding the Power and Purpose of a WeChat Acco...
byhoovazuh63
 
Ome John Etue - A Certified Product Leader
byOme John Etue
 
Adam and Daniel Kaplan - Successful Versatile Professionals
byAdam and Daniel Kaplan
 
TMG - Q1 2026 Earnings Call Slides - final
byMarketing847413
 
Urbanetectonics Service Product 2018 Engineering Management
byUrbanetectonics
 
Vinawind – The Leading Electric Fan Brand in Vietnam
byJoe Nguyen
 
QNET Welcomes Convictions in Ghana Human
bybusinessweekghana
 
Top Sites to Buy Yahoo Accounts (PVA, Aged, Bulk Options) — Safe Delivery & M...
byusasmmpva
 

Finance for Non Finance Professionals.pptx

  • 1.
    Finance for NonFinance Professionals PROF ROSSY MATHUR M.PHIL, MBA, DOUBLE M.COM, PGDMM, PGDIBO, PGDHE, PGDHRM, B.COM FINANCE & MARKETING, MBA @ IICMR, PUNE
  • 2.
    Objectives of theWorkshop 1. To get the participants acquainted with various accounting and financial terms. 2. To assist existing and potential entrepreneurs to appreciate the usefulness of MONEY in business 3. To provide a clear insight into the fundamentals of finance and explain procedures. 4. To provide an understanding of financial reports such as Profit and Loss and Balance Sheets, Cash Flow Statement & Budgeting. 5. To show how to read into key financial reports defining the issues and areas that matter.
  • 3.
    What Participants willlearn Understand Key Financial Terms  Understand why accounts are prepared?  Understand what is Financial Management and how it is different from Accounting?  Understand What are Financial Statements and how it is useful for Decision Making?  Understand why knowledge Financial Management is essential to grow up in the Organisational Chart?  Understand Budgeting  Understand what is Working Capital Management
  • 4.
    Career opportunities inIT + Knowledge in finance Participants can acquire employable skills for life and virtually there is no retirement. They can be employed in Banks, Mutual Funds, Stock Market, Currency Market, Commodity Market, Teaching, KPOs, and BPOs etc. in BFSI (Banking Financial Services & Insurance) sector. Why you should we train in finance ? • Every decision in an organization revolves around Finance. • If you are an entrepreneur, its crucial that you have knowledge of Financial Matters to manage your business effectively. • If you are head of IT department like Production / Purchases / Sales, etc and if you aspire to grow in your hierarchy, financial knowledge is must.
  • 5.
    Agenda day 1 ExplainingVarious Terms & Concepts Explaining Various Formats of Financial Statements Financial Quiz Assignment Agenda day 2 Discussing Financial Statements Explaining Budgets Activity Financial Quiz
  • 6.
    Agenda day 3 Activity Case Study – Financial SWOT analysis of a company Discussing Financial Statements Explaining Budgets  Group Discussion  Presentation
  • 7.
    • All major decisionsare Driven by Financial information • Market , Products & Services • Projects have many financial implications based on the decision and actions taken by various departments • Marketing Dept, IT Dept, HR dept etc • Finance can be intimediating & confusing for those not financially trained • My objective is to reduce your financial confusion & improve decision making & Confidence
  • 9.
    Basic Accounting &Financial Terms
  • 10.
    Journalization Book Keeping &Accountancy Original source documents Stage 1 – recording in the Books of original entry
  • 11.
    Stage 2 Ledgers& Trial Balance Personal a/c Debit (Dr)the receiver of benefit Credit (Cr)giver of benefit Real a/c Debit (Dr)what comes in Cerdit (Cr) what goes out Nominal a/c Debit all expenses, Losses Credit all income & gains
  • 12.
    Trial balance Debit BalanceAmt. ` Credit Balance Amt. ` Stock (1/4/2018) 65,000 General Reserve Capital: Daya Kshama Creditors R.D.D. Sales Outstanding Wages Purchases 14,500 Bills Receivable 28,000 Wages and salaries 9,000 1,60,000 Sundry Debtors 1,32,500 1,20,000 Bad debts 1,000 98,000 Purchases 1,48,000 1,800 Motor car 68,000 2,85,500 Machinery 1,14,800 Audit Fees 1,200 Sales Return 2,000 Discount 2,300 Building 75,000 Cash at Bank 12,000 10% Investment 20,000 Advertisement(Paid for 9 months) 4,500 Royalties 3,000 6,86.300 6,86.300
  • 13.
    Trading a/c Particulars Amt.(`) Amt. (`) Particulars Amt. (`) Amt. (`) To Opening Stock xxx By Sales xxx To Purchases xxx Less : Return Inward xxx xxx Less : Return Outward xxx xxx To Carriage Inward xxx By Goods lost by fire xxx To Freight xxx By Goods lost by theft xxx To Dock Charges xxx By Goods distributed To Custom Duty xxx as free samples xxx To Wages Productive xxx By Goods lost in Accident xxx Manufacturing Wages xxx By Goods withdrawn by To Wages & Salaries xxx Partners xxx To Import Duty xxx By Closing Stock xxx To Coal/Coke/Gas/ By Gross Loss c/d xxx Motive Power/Oil/ Water /Grease xxx To Royalty on Purchase/Production xxx To Primary Packing Charges xxx To Factory Lighting & Heating xxx To Factory Rent & Rates xxx To Factory Insurance xxx To Works Manager's Salary xxx To Gross Profit c/d xxx xxx xxx
  • 15.
    Balance sheet Liabilities Amt.` Amt. ` Assets Amt. ` Amt. ` Capital Accounts : A B C Partners Current A/c (Credit Balance) General Reserve Profit & Loss A/c Loan on Mortgage Bank Loan Loan from Partners Bills Payable Bank Overdraft Sundry Creditors Add/Less : Any other adjustment Less : Provision for Discount on Creditors Outstanding Expenses Income received in Advance Provision for Taxes Goodwill Land and Building Less : Depreciation Plant & Machinery Less : Depreciation Furniture & Fixtures Less : Depreciation Equipment Less : Depreciation Delivery/Motor Van Less : Depreciation Leasehold / Freehold Premises Less : Depreciation Patents Less : Depreciation Loose Tools Less : Depreciation Investments Stores & Spare Parts Less : Depreciation Prepaid Expenses Outstanding Incomes Loans and Advances Closing Stock Sundry Debtors + Any adjustments Less : Bad Debts(New) Less : Provision for Discount on Debtors Insurance Claim Receivable Bills Receivable Cash in Hand Cash at Bank Partners Current A/c (Credit Balance)
  • 16.
    Basic Accounting &Financial Terms Assets and liabilities are accounting terms that help businesses identify income-producing items as well as things that can take away from company profits. Businesses also refer to assets and liabilities as "profits" and "losses." Assets represent a company's resources while liabilities represent a company's obligations.
  • 17.
    Capital and Drawings: a)Capital : The total amount invested into the business by the owner is called capital. Excess of assets over the liabilities is also called as capital. The equation for this is : Capital = Assets – Liabilities Capital is a liability of the business as this amount is payable by the business enterprise to the owner at the time of closure of the business. b) Drawings : The amount of cash or value of goods, assets, etc., withdrawn from the business by the owner for personal use called as drawings. E.g. : A proprietor pays colleges fees of his son, or pays for his medical expenses, mobile bills etc, from the business.
  • 18.
    Debtors and Creditors: a)Debtor : A person who has to pay to the business for getting goods and services on credit is known as debtor. A debtor is a person who owes money to the business. b) Creditor: A person to whom business has to pay for getting goods or services on credit is known as creditor. A creditor is a person to whom business owes money. c) Bad Debts : An irrecoverable amount from a debtor is known as "Bad Debts". It is a revenue loss to the business.
  • 19.
    Accounting Year: It isthe period of 12 months for which accounts are maintained and closed by the proprietor. Earlier the proprietors were following any accounting year i.e. calendar year , or financial year or any other year as per tradition. But now for income tax purpose an accounting year starts on 1st April and end on 31st March. At the end of accounting year a proprietor has to prepare Trading account, Profit and Loss account and Balance Sheet to find out the financial position of the business.
  • 20.
    Profit or Loss a)Profit : When the selling price of goods is more than the cost price it is a profit. Profit increases the capital of the business. e.g.If goods are sold for Rs50,000/- and all expenses during the period amounted to ` 30,000/- then the profit is `Rs20,000/- b) Loss : When cost price of goods is more than its selling price it is a loss. Loss decreases the capital of business e.g If goods are sold for `Rs50,000/- and all expenses during the period amounted to ` 60,000/, then the loss will be Rs10,000/- c) Income: It is revenue arising as a result of business transactions. It is the amount receivable or realised from services provided and earnings from interest, dividend, commission, etc. d) Revenue: It is income that a business has from its normal business activities usually from the sale of goods and services to customer.
  • 22.
    1Assets, Liabilities, NetWorth: i) Assets : Any physical thing or right owned that has a monetary value is called as an asset. The ownership of the Asset must be with business unit. E.g Land, Goodwill, Patents, Computers etc. ii)Types of Assets: a) Fixed Assets/Non current Assets : The assets which give long term benefit to the business are known as fixed assets e.g Land and Building, Plant & Machinery, Goodwill etc. These assets may be tangible or intangible. b) Current Assets : Assets which are held in the business for the operating year and can be converted into cash very easily are called as current assets. e.g Debtors, Bills Receivable Cash in Hand, Cash at Bank, Stock etc. c) Fictitious Assets : These assets are not represented by tangible possession or property. They are imaginary assets but do not have any realisable value. e.g Deferred revenue expense like advertisement paid for 4 years. iii)Liabilities: Amount payable by the business to others is known as liability. It is a debt or amount due from the business to others for the benefit received by the business unit. e.g Loan taken, Creditors, Bank Overdraft, Outstanding Expenses etc. .
  • 24.
    iv)Types of Liabilities: a)Fixed Liabilities : One of the major source of funds in the business is fixed liabilities. It may be in the form of capital, secured loans, long term loans from banks and from financial institutions etc. b) Current Liabilities: Short term liabilities payable within a year are called current liabilities. Current liabilities arise in the regular current operations of the business. These liabilities are not normally secured. E.g. Creditors, Bills Payable etc. v) Net worth or Owners Equity or Capital: The amount or funds provided by the proprietor in the business is called as “Capital” as well as the excess of assets over liabilities of the business is also known as “Capital” or “Net Worth”. Net worth includes Capital and Reserves. Capital can be in the form of cash or in kind
  • 30.
    There are twoimportant Financial Statements. (1) Balance Sheet / A Position Statement (2) Profit and Loss A/c / An Income Statement Financial Statement analysis includes two aspects (a) Analysis of Data : It provides methodical classification of financial statement (b) Interpretation of Data : It means explanation of meaning and significance of data. Thus the objectives of Financial Statement is to provide information about the financial posi- tion, performance and changes in financial position of an enterprises that is useful to wide range of users in making economic decisions.
  • 31.
    Analysis of FinancialStatements. Methods for comparisons of Financial Statement : (1) Comparative Balance Sheet Comparative Balance Sheet is the study of the trend of the same items and compared items in two or more Balance Sheet of same business enterprise of different dates.” Such comparison throws light on changes and progress made in respect of each item of Assets and Liabilities. The main purpose of Comparative Balance Sheet is to measure the short term and long term solvency position of business. Formula used to find % Increase or Decrease = 𝐀𝐦𝐨𝐮𝐧𝐭 𝐨𝐟 𝐀𝐛𝐬𝐨𝐥𝐮𝐭𝐞 𝐂𝐡𝐚𝐧𝐠𝐞 𝐀𝐦𝐨𝐮𝐧𝐭 𝐨𝐟 𝐏𝐫𝐞𝐯𝐢𝐨𝐮𝐬 𝐘𝐞𝐚𝐫 x 100
  • 32.
    Comparative Balance sheetof Noha Textiles Ltd. as on 31.3.2018 & 31.3.2019. Particular 31.3.2018 (Rs) 31.3.2019 (Rs) Absolute increase or decrease (Rs) Percent increase and decrease Fixed Assets 12,00,000 18,00,000 6,00,000 50% Less : Accumulated depreciation 2,00,000 3,00,000 1,00,000 50% (A) Net Fixed Assets 10,00,000 15,00,000 5,00,000 50% Current Assets 5,00,000 9,00,000 4,00,000 80% Less : Current Liabilities 2,00,000 4,00,000 2,00,000 100% (B) Working Capital 3,00,000 5,00,000 2,00,000 66.67% (C) Capital Employed 13,00,000 2,00,000 7,00,000 53.55% (D) Less : 12% Bank Loan -5,00,000 -8,00,000 3,00,000 60% (E) Share holders Fund ( C-D) 8,00,000 12,00,000 4,00,000 50% Share Capital 5,00,000 10,00,000 5,00,000 100% Reserves 3,00,000 2,00,000 (1,00,000) 33.33% Share holders fund 8,00,000 12,00,000 4,00,000 50%
  • 33.
    Comments : Theanalysis of above comparative Balance Sheet gives the following conclusions.  Total fixed assets have increased by Rs.6,00,000, 50% increase.  Purchased of fixed assets was financed partly by issue of shares for Rs.5,00,000 and partly by increase in loan.  Share Capital has increased by Rs.5,00,000 i.e. 100% increase it has strengthned in financial position of the company.  Reserve have decreased by Rs.1,00,000 i.e. 33.33% decrease, which reflect loss in the business during the current year.  Current Liabilities have increased by Rs.2,00,000 i.e. 100% increase but current Assets have also increased by Rs. 4,00,000 i.e. 80% increase. It has resulted in the increase of working capital of the firm by Rs. 2,00,000 which has been financed by increase in loan.
  • 34.
    Comparative Balance Sheetof Varun Company Ltd. as on 31.3.2019 and 31.3.2020 Particulars 31.3.19 (Rs) 2 31.3.20 (Rs) 3 Absolute Change (Rs) 4 Percentage Change I. Sources of Funds a. Share capital 2,50,000 3,70,000 1,20,000 48% Increase b. Reserves & Surplus 60,000 1,00,000 40,000 66.67% Increase (A) Net Worth 3,10,000 4,70,000 1,60,000 51.61% Increase B. Borrowed Funds a. Secured Loan 1,00,000 1,60,000 60,000 60% Increase b. Unsecured Loan 90,000 1,40,000 50,000 55.55% Increase Total Borrowed Fund 1,90,000 3,00,000 1,10,000 57.89% Increase Total Fund Available (A + B) 5,00,000 7,70,000 2,70,000 54% Increase II. Application of Funds A. Fixed Assets 3,50,000 5,70,000 2,20,000 62.86% Increase B. Investment 1,20,000 1,70,000 50,000 41.67% Increase C. Working Capital 1. Current Assets 1,30,000 1,20,000 (10,000) (7.69%) decrease Less : 2 Current Liabilities 1,00,000 90,000 (10,000) (10%) decrease Working Capital (Current Asset Less Current Liabilities) 30,000 30,000 Nil Nil Total Fund Applied (A + B + C) 5,00,000 7,70,000 2,70,000 54% Increase
  • 35.
    Budget  A budgetis a formal statement of estimated income and expenses based on future plans and objectives. In other words, a budget is a document that management makes to estimate the revenues and expenses for an upcoming period based on their goals for the business.  What does it mean to create a budget?  Budgeting is the process of creating a plan to spend your money. This spending plan is called a budget. Creating this spending plan allows you to determine in advance whether you will have enough money to do the things you need to do or would like to do. Budgeting is simply balancing your expenses with your income.  A budget is used to forecast the financial results and financial position of an entity for a future period. It is used for planning and performance measurement purposes, which can involve spending for fixed assets, rolling out new products, training employees, setting up bonus plans, controlling operations, and so forth.
  • 36.
    Personal budget  Apersonal budget or home budget is a finance plan that allocates future personal income towards expenses, savings and debt repayment. Past spending and personal debt are considered when creating a personal budget. There are several methods and tools available for creating, using and adjusting a personal budget. For example, jobs are an income source, while bills and rent payments are expenses.  A personal budget or home budget is a finance plan that allocates future personal income towards expenses, savings and debt repayment. Past spending and personal debt are considered when creating a personal budget. There are several methods and tools available for creating, using and adjusting a personal budget. For example, jobs are an income source, while bills and rent payments are expenses.
  • 37.
    Let’s get startedon creating your perfect Personal budget. Follow the following steps for creating a personalized budget that could save you several bucks at the end of each month: Know Your Living Expenditures By living expenditures, I mean the house rent, maintenance bills, utility bills, bills, and mortgage. So, do not add extra expenses, such as your monthly expenses that you cannot do without. Calculate Your Leisure Expenses  Examples of such expenses are fine dining, fitness classes, gym, library fees, subscriptions, etc Keep Your Financial Goals Firm One important aspect of creating a personal budget is prioritizing your left with after excluding taxes, discretionary expenditures, and living expenses execute your financial goal
  • 38.
    Repaying Debt The worstthing about debt is that the more you delay it, the more interest will debts, such as student loans, home loans, or high credit card loans, have a your debt should be the top priority by default. Building Up an Emergency Fund saving a percentage of your income, such as 5 or 10 percent. It may take you You must save enough to have 6-month living expenses in your bank account. Contribute to Retirement Account Start thinking about retirement plans early. The best retirement plan offers a (typically 3% to 5%) and huge tax benefits. Try to contribute to your retirement Invest for Future Financial Stability
  • 39.
    Consider The 50/30/20Budget Trick Here’s how it works: •50% of your take-home salary should be spent entirely on your needs or daily living expenses. •30% to wants that includes fun or entertainment, such as Netflix membership, gym fee, dinner and •20% for your savings, which includes repaying debts, setting up an emergency fund, or investing.
  • 41.