MODULE 11

Mastering Financial Statements, Terms, Ratios & Legal Requirements

The financial statements have new names. They are reported here for those not yet familiar with them.

An income statement is now called a “Statement of Comprehensive Income”, a balance sheet has been named as a “Statement of Financial Position.” The required statement of retained earnings has been replaced by a “Statement of Changes in Shareholder’s Equity

Contents

  1. How much money do you need and for how long?
    • Appendix 1 : Expense List Template supplied – please customize it to meet your needs
    • List your overall costs each year for five years
    • List your estimated income/sales each year for five years
    • List your overall costs each year for five years
  2. What method will you use to price your product/service/process?
    • Some popular pricing models explained
    • Break-even point
    • Safety margin
    • Pricing check-list
  3. Legal issues which affect pricing (including reference to the Competition Act and Consumer Protection Act)
  4. Important financial concepts and terminology explained
  5. Important financial ratios and formulas (supplied) to calculate business health
  6. Why financial statements are important
  7. Understanding debits and credits
  8. Understanding Cash Flow Statements (with free excel template)
  9. Understanding Income Statements (with free excel template)
  10. Understanding Balance Sheets (with free excel template)
  11. Understanding Statements of Changes in Equity (with free excel template)
  12. Limitations of financial statements
  13. Understanding what levies and taxes individuals and companies must register and pay for, and how often (South Africa) and claiming back from the SDL Levy
  14. Where is the money going to come from to finance your business requirements? (understanding the different options available to you)
    • Planning for the unexpected (covered in more detail in Module 12 as well)
    • Why it is important to pay yourself
    • Personal funding
    • Private loans
    • Private equity investments/Buy-Ins
    • Bank loans
    • Crowd funding
    • Government grants
  15. Ways to save money, improve efficiency and increase revenue
  16. A customer’s perception of value
  17. Changing the way you receive payment and adding more payment options for your customers
  18. Good record and control practices
    • Records SARS want you to keep and how long you must keep them for
  19. Orders and deliveries
  20. How to choose your financial advisor
  21. More free templates which you can modify :
    • Quotation/Purchase Order
    • Invoice
    • Statement
    • Receipt
  22. Module 11 completion form
Sample 1
Sample 2
  • Without a sound understanding of financial terminology, profitability ratios and simple debits and credits you will struggle to have an accurate picture of how your business is really performing in terms of income and expenses.

  • You will also not be able to tell if those who you entrust your financial affairs to, are doing a good job or robbing you blind.

  • You could end up paying more than you have to in terms of fees and interest charges when you borrow money.

  • Give yourself a sound foundation and take control of your financial affairs.

  • Create professional financial reports, invoices, statements, receipts and so on.

  • This module will help you to save money, improve efficiency and increase revenue!

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