Itb Chap 12
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Transcript of Itb Chap 12
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Introduction to Business© Thomson South-Western
ChapterChapterChapterChapter
Financial Management
12-112-1 Financial Planning
12-212-2 Financial Records and Financial Statements
12-312-3 Payroll Management
12-412-4 Financial Decision-Making
1212
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Introduction to Business© Thomson South-Western
Chapter 12
Slide 2
LESSON 12-1
Financial Planning
Goals Recognize important financial questions
that must be answered in a business. List the steps in budget preparation. Describe three types of business
budgets.
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Introduction to Business© Thomson South-Western
Chapter 12
Slide 3
Key Terms
revenue expenses budget start-up budget operating budget cash budget
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Introduction to Business© Thomson South-Western
Chapter 12
Slide 4
FINANCIAL PLANNING
Beginning a business Ongoing operations Business expansion
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Introduction to Business© Thomson South-Western
Chapter 12
Slide 5
BASIC FINANCIAL EQUATION
Revenue – Expenses = Profit or Loss
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Introduction to Business© Thomson South-Western
Chapter 12
Slide 6
>> C H E C K P O I N T
What is the basic financial equation for businesses?
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Introduction to Business© Thomson South-Western
Chapter 12
Slide 7
DEVELOPING BUSINESS BUDGETS Sources of budget information Budget preparation
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Introduction to Business© Thomson South-Western
Chapter 12
Slide 8
>> C H E C K P O I N T
What are the four steps in preparing a business budget?
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Introduction to Business© Thomson South-Western
Chapter 12
Slide 9
TYPES OF BUDGETS
Start-up budget Operating budget Cash budget
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Introduction to Business© Thomson South-Western
Chapter 12
Slide 10
>> C H E C K P O I N T
Identify and describe the three types of budgets needed by all businesses.
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Introduction to Business© Thomson South-Western
Chapter 12
Slide 11
LESSON 12-2
Financial Records and Financial Statements
Goals Identify several types of financial
records needed by businesses. Describe the differences between an
income statement and a balance sheet.
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Introduction to Business© Thomson South-Western
Chapter 12
Slide 12
Key Terms
financial records assets liabilities owner’s equity balance sheet income statement
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Introduction to Business© Thomson South-Western
Chapter 12
Slide 13
FINANCIAL RECORDS Types of records
Asset records Depreciation records Inventory records Records of accounts Cash records Payroll records Tax records
Maintaining financial records
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Introduction to Business© Thomson South-Western
Chapter 12
Slide 14
>> C H E C K P O I N T
How has the process of maintaining financial records been affected by technology?
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Introduction to Business© Thomson South-Western
Chapter 12
Slide 15
FINANCIAL STATEMENTS
The balance sheet The income statement
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Introduction to Business© Thomson South-Western
Chapter 12
Slide 16
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Introduction to Business© Thomson South-Western
Chapter 12
Slide 17
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Introduction to Business© Thomson South-Western
Chapter 12
Slide 18
>> C H E C K P O I N T
What is the difference between a balance sheet and an income statement?
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Introduction to Business© Thomson South-Western
Chapter 12
Slide 19
LESSON 12-3
Payroll Management
Goals Describe the components of a
business’ payroll system. Identify information included in payroll
records and paychecks.
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Introduction to Business© Thomson South-Western
Chapter 12
Slide 20
Key Terms
payroll payroll record direct deposit
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Introduction to Business© Thomson South-Western
Chapter 12
Slide 21
PAYROLL SYSTEMS
Income taxes Social Security and Medicare Unemployment taxes
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Introduction to Business© Thomson South-Western
Chapter 12
Slide 22
>> C H E C K P O I N T
What is the purpose of the payroll system?
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Introduction to Business© Thomson South-Western
Chapter 12
Slide 23
PREPARING A PAYROLL
Payroll records Preparing paychecks
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Introduction to Business© Thomson South-Western
Chapter 12
Slide 24
AN EMPLOYEE’S PAYCHECK AND EARNINGS REPORT
SamplePaycheck
SampleEarningsReport
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Introduction to Business© Thomson South-Western
Chapter 12
Slide 25
>> C H E C K P O I N T
What is the difference between a payroll record and an earnings report?
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Introduction to Business© Thomson South-Western
Chapter 12
Slide 26
LESSON 12-4
Financial Decision-Making
Goals Recognize important financial
information managers use to make decisions.
Identify the steps in making financial decisions in business.
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Introduction to Business© Thomson South-Western
Chapter 12
Slide 27
Key Terms
financial performance ratios discrepancies
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Introduction to Business© Thomson South-Western
Chapter 12
Slide 28
USING FINANCIAL INFORMATION Important financial information Understanding financial performance
ratios Current ratio Debt to equity ratio Return on equity ratio Net income ratio
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Introduction to Business© Thomson South-Western
Chapter 12
Slide 29
FINANCIAL PERFORMANCE
RATIOS
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Introduction to Business© Thomson South-Western
Chapter 12
Slide 30
>> C H E C K P O I N T
Identify four important financial performance ratios used by managers to determine how well the business is performing.
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Introduction to Business© Thomson South-Western
Chapter 12
Slide 31
MAKING FINANCIAL DECISIONS Prepare a budget Look for discrepancies between actual
and budgeted performance Make needed adjustments
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Introduction to Business© Thomson South-Western
Chapter 12
Slide 32
>> C H E C K P O I N T
List the three steps in financial decision-making.