Introduction to Financial Management

1
Introduction to Financial Management
2
Financial Management

• Conducting all financial matters of the
  organization in a way that ensures that funds are
  used in a proper and efficient manner

3
Financial Management System
Budgeting

• Reporting Income Statement, Balance Sheet, Cash
  Flow

Record Keeping Accounting
4
Budget Foundations

• strategic plan
• numerical representations
• benchmark Done on a yearly cycle
• Bottom-up/Top Down Budgeting
• Coordination/control

5
Methods of Budgeting

• Program-Planning-Budgeting System (PPBS )
• Line Item
• Incremental
• Zero Based

6
Record KeepingThe General Leger (GL)

• Purpose
• Income/expenses
• sources

7
Components of a General Ledger

• Assets
• Liability
• Revenue
• Expense
• Gain
• Loss

8
General Leger
9
(No Transcript)
10
Two Types of Accounting

• Management Accounting
• Financial Accounting

11
Reports Financial Accounting

• Financial reports include the following
  components
• Balance Sheet
• Income Statement
• Statement of Retained Earnings
• Statement of Changes in Financial Position

12
Balance Sheet

• The financial position of an entity
• Assets

13
Reporting Balance Sheet
Assets Liabilities (debt) Owners
Equity Assets (has value) Liabilities
(debt) Current Assets Current
Liabilities Fixed Assets Long Term
Liabilities Other Assets
Equity value of investment
of owners plus profit left to
accumulate
14
Income Statement

• an organizations operations
• personal Income statement

15
Income Statement
Sample - Sorority Swimwear
Expenses Salaries Payroll Taxes Depreciation
on equipment Workers Compensation Health
Insurance Advertising Office Supplies Rent Uti
lities Bad debts Travel Miscellaneous Interes
t Taxes
Sales Direct (cash) Retail Internet Cost of
Goods Sold Royalties
Gross Profit
Net Income
16
Statement of Retained Earnings

• Net income
• Explains the changes.
• Breaks down changes.