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Financial analysis statements

Financial analysis statements

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Financial analysis statements

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    1. Financial analysis & statements

    2. Financial Analysis Methods to monitor the fiscal status of the organization over a period of time Monthly, quarterly, annually Methods Break even analysis Income statements Cash flow statement Balance sheet Budget statement

    3. Break Even Analysis How many units of a product must be sold in order to cover all costs of production of that unit Method #1 BE=F+(V*Units sold)/Units sold

    4. Break Even - Example

    5. Break Even - Example

    6. Break Even - Example

    7. Break Even Analysis How many units of a product must be sold in order to cover all costs of production of that unit Method #2 Formula BE=F / (P V) BE= Break even point F = Fixed costs P = Selling price per unit V = Variable costs per unit

    8. Break Even BE=F / (P V) P=$60 BE=2650 / (60-7) BE=2650 / 53 BE=50 people

    9. Break Even Analysis Bike rental business Fixed costs = $8000 Variable costs = $10/person Bike rental = $50/bike

    10. Break Even Analysis Bike rental business Fixed costs = $8000 Variable costs = $10/person Bike rental = $50/bike BE=F / (P V) BE=8000/(50-10) BE=8000/40 BE=200 bikes

    11. Break Even Analysis

    12. Break Even Analysis Profit $40 profit per bike over 200 250 bikes = 50*$40=$2000 350 bikes 150*$40=$6000 Loss 150 bikes Expenditures 8000+($10*150)=$9500 Revenues $50*150 bikes=$7500

    13. Income Statement Measures profitability over a period of time i.e. annually, quarterly, or monthly Income = revenues expenses Shows how profitable your company ishow much money will be made after all expenses are taken out With a new company Typically 1st year you prepare monthly projections Years 2-3 Quarterly projections (4 times a year) Years 4-5: Annually (once a year) Example.

    14. Income Statement

    15. Cash Flow Statement Income statement provided information about revenues coming in and expenses going out, but not cash in and cash out Whats in the bank Eliminates some of the creative accounting of the income statement (ex. depreciation) Negative cash flows okay, but not sustainable forever

    16. Cash Flow Statement Negative monthly cash flow means that you dipped into the savings in this seasonal business.Negative monthly cash flow means that you dipped into the savings in this seasonal business.

    17. Cash Flow Statement Negative monthly cash flow means that you dipped into the savings in this seasonal business.Negative monthly cash flow means that you dipped into the savings in this seasonal business.

    18. Balance Sheet Financial condition of a business at a single point in time End of month, quarter, year Provides information about a companys assets, liabilities, and owners equity (capital)owes vs. owns Assets = liabilities + equity or Equity = assets liabilities Terms

    19. Balance Sheet Current assets Cash & assets that can be turned to cash quickly (within a year) Inventory Bank deposits Accounts receivable Amts not yet collected from customers but are due Fixed assets Used to produce good & arent for sale Land, building, machinery, equipment Depreciation Declining value of a fixed asset

    20. Balance Sheet Accounts payable What is owed to suppliers for things bought on credit Salaries Current liabilities Debts for regular business operations that will come due within a year) Long term liabilities Due after a year Mortgages, bonds, large loans Net worth (owners equity) Portion of business owned free and clear of all debts

    21. Assets what you have of value; liabilities what you owe; Equity is the net worth or what you own free and clear. Assets what you have of value; liabilities what you owe; Equity is the net worth or what you own free and clear.

    22. Budget Statement Expended monies Allocated monies Revenues received % of allocated that is commited

    23. Budget Statement