The Business Model Canvas

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MT 5011 FINANCE FOR ENGINNERING & TECHNOLOGY MANAGEMENT
LESSON 01 - Finance basics for Managers SECTION 01: FINANCE BASICS -The Key Financial Statements *** The Balance Sheet -Assets: Physical resources that a company owns: Examples: - Land and Buildings - Plant and Machineries - Motor vehicles - Trade Debtors / Accounts Receivables - Investments - Cash Andrew Ng Jan 23,2013

MT 5011 FINANCE FOR ENGINNERING & TECHNOLOGY MANAGEMENT
Liabilities & Owner’s Equity Liabilities: Debts that the company owe to suppliers & other creditors – Examples -Current Liabilities - Trade & Other Creditors - Accounts payable - Short term loan - Accrued expenses & Income taxes -Long term Liabilities -Debts that the company is contractually obligated to repay over a period of time longer than one year

MT 5011 FINANCE FOR ENGINNERING & TECHNOLOGY MANAGEMENT
-Owner’s equity is what’s left after your subtract total liabilities from total assets Assets – Liabilities = Owners’ Equity Assets = Liabilities + Owners’ Equity -Owners’ Equity includes: -Retained earnings: net profit that accumulate on a company’s balance sheet after payment of dividends to shareholders and; - Paid up capital: Capital received in exchange for shares

MT 5011 FINANCE FOR ENGINNERING & TECHNOLOGY MANAGEMENT
-How does the Balance Sheet relates to you -Working capital -Subtracting current liabilities from current assets gives you the company’s net working capital -Financial leverage -The use of borrowed money to acquire an asset is called financial Leverage -A company is highly leveraged when the percentage of debt on its balance sheet is high relative to the capital invested by the owners -Financial structure of the firm - Creating a balance between debt and equity on the balance sheet

MT 5011 FINANCE FOR ENGINNERING & TECHNOLOGY MANAGEMENT
- The Income Statement -It shows cumulative business results within a defined time frame, such as a quarter or a year. -It tells you whether the company is making a profit or a loss -It is often refer to as the Profit and Loss account -Revenue – cost of goods sold = Gross Profit -Gross profit – operating expenses = Net Profit or Net earnings -Multi year comparisons for objective measurement -How does the Income statement relates to you -Generating Revenue - Managing budget -Managing a Profit & loss account

MT 5011 FINANCE FOR ENGINNERING & TECHNOLOGY MANAGEMENT
- The Cash Flow Statement - often the least used and least understood among the three essential statements -Shows how a company acquired and spent its cash during a given span of time -Consist of three components: - Operating activities - Cash generated by and used in the company’s operations - Investing activities - Cash spent and realized from acquisition and disposal of capital equipment and other investments - Financing activities - Cash used to reduce debt, buy back stock, or pay dividends

MT 5011 FINANCE FOR ENGINNERING & TECHNOLOGY MANAGEMENT
How does the Cash Flow statement relates to You
-When cash is tight, you probably want to be conservative in your planning and spending -When it is plentiful you may have opportunity to propose a bigger budget and make investment proposal

Where to find the Financials
- Online SGX website : www.sgx.com -Hard copies of published accounts and annual reports

MT 5011 FINANCE FOR ENGINNERING & TECHNOLOGY MANAGEMENT
- Summary
-The Balance Sheet shows a company’s financial position at a specific point of time. It provides a snapshot of its assets, liabilities, and equity on a given Day -The Income Statement shows the bottom line. It indicates how much profit or loss was generated over a period of time – usually a month, a quarter or a year. -The cash flow statement tells where the company’s cash came from and where it went. It shows the relationship between net profit and the change In cash recorded from one balance sheet to the next ** Together these financial statements can help you understand what is...
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