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The Business of Being in Business
WORK BASED REVIEW
The aim of the module is to review and learn about
the key financial controls used in a creative
business and how they support management and
project decision making
MO
NE
Y
What's the definition of an accountant?
Someone who solves a problem you didn't know you had in a way you don't understand.
The Business of Being in BusinessHow Businesses Work
VISION
MISSION
VALUES BEHAVIOURS
OBJECTIVES STRATEGIES
KNOWLEDGE SKILLS
THE BUSINESS MODEL
VISION
MISSION
VALUES BEHAVIOURS
OBJECTIVES STRATEGIES
KNOWLEDGE SKILLS
LINKING FINANCE TO BUSINESS
CORE AREAS IN WHICH ANNUIAL BUDGETS ARE
SET AND MONITORED
BUDGETS
FINANCIAL
How do we add value
to our customers
and shareholder
s while controlling
costs?
INTERNAL PROCESS
How do we satisfy customers while meeting budget constraints in how
we operate?
LEARNING AND GROWTH
How do we enable ourselves to grow and
change so as to prosper?
CUSTOMERS
Who are our
customers and how do we create value for
them?
BALANCED SCORECARD
THE BALANCED SCORECARD
FINANCIAL
Objectives
Measures
Targets
Initiatives INTERNAL PROCESS
Objectives
Measures
Targets
Initiatives
LEARNING AND GROWTH
Objectives
Measures
Targets
Initiatives
CUSTOMERS
Objectives
Measures
Targets
Initiatives
TO ACHIEVE VISION AND STRATEGY
THE BALANCED SCORECARD
The Business of Being in BusinessFinance in Business
Money does two things in business.
MONEY
It comes in…
…and it goes out
Balance Sheet
Profit and Loss
Cash Flow
THE KEY ACCOUNTS
A BUSINESS REALITY…
The Business of Being in BusinessThe Balance Sheet
The purpose of a balance sheet
The purpose of all balance sheets is to give a statement of net worth at any point in time
Contains assets and liabilities
THE BALANCE SHEET
BALANCE SHEET ACTIVITY
At 31 January 2009
2008 2007
The Business of Being in BusinessThe Profit and Loss
The purpose of a profit and loss
A profit and loss account shows just how profitable (or not) a business has been over a set period
Turnover less costs
THE PROFIT AND LOSS
PROFIT AND LOSS ACTIVITY
RDF MEDIA PROFIT AND LOSS
The Business of Being in BusinessCash Flow
The purpose of cash flow forecasting
It's a 'live' document and an essential planning tool from which you estimate future income and expenditure
All forecasted income less expenditure plus cash in the bank
CASH FLOW
Balance Sheet
Profit and Loss
Cash Flow
The Past
The Present
The Future
KEY ACCOUNTS IN FINANCE
Cash in, cash out Balance Sheet Profit and Loss Cash Flow Forecast You manage your finance
THIS MORNING
LUNCH
The Business of Being in BusinessBudgeting
A budget is a plan of what you
need to spend on a specific
project, activity or service.
A BUDGET
Involve people Be realistic Know your
facts Consider fixed
and variable costs
SETTING BUDGETS
VOLUME
CO
ST
FIXED COSTS
VARIABLE COSTS
FIXED AND VARIABLE COSTS
BUDGET ACTIVITY
Involve people
Be realistic
Know your facts
Fixed and
variable costs
Review, react
and revise
budgets
BUDGETING
The Business of Being in BusinessFinance in Action
The Business of Being in BusinessValue for Money
RETURN ON INVESTMENT
Return on Investment (ROI) is a
measure of the profit earned
from each investment made in
n activity or project
(Total Profit – Investment)Investment
RETURN ON INVESTMENT CALCULATION
The Business of Being in BusinessModule Review
Cash is King
Balance Sheet
Profit and Loss
Cash Flow Forecasting
Budget Management
Being able to use the information
TODAY
"When I asked my accountant if anything could get me out of this mess I am in now he thought for a long time and said, 'Yes, death would help'.“Robert Morley
The Business of Being in [email protected]