WEBVTT 1 00:00:00.400 --> 00:00:04.200 Hello and welcome to this second module of the accounting 2 00:00:03.200 --> 00:00:06.800 for business course accounting for 3 00:00:06.800 --> 00:00:09.500 business operations, accounting as a support 4 00:00:09.500 --> 00:00:12.100 to business operations. The title of 5 00:00:12.100 --> 00:00:15.700 this second module is prepare the company for growth. 6 00:00:16.500 --> 00:00:19.900 You remember that the first module was about profit and 7 00:00:19.900 --> 00:00:23.300 transforming profit Into Cash. I 8 00:00:22.300 --> 00:00:25.800 first developed the concept of profit 9 00:00:25.800 --> 00:00:28.800 which is basically about revenues Minus 10 00:00:28.800 --> 00:00:31.400 cost but not all the costs the costs which 11 00:00:31.400 --> 00:00:34.600 are associated with the goods sold associated with 12 00:00:34.600 --> 00:00:37.500 a revenues then we understood that 13 00:00:37.500 --> 00:00:40.900 cash is not the same as profit cash the 14 00:00:40.900 --> 00:00:43.200 first form profit. There are many reasons 15 00:00:43.200 --> 00:00:46.300 why cash differs from profit but there's one which 16 00:00:46.300 --> 00:00:49.900 was introduced in the first module this absolutely fundamental 17 00:00:49.900 --> 00:00:53.600 concept of working capital requirement. I 18 00:00:52.600 --> 00:00:55.400 progressively described how 19 00:00:55.400 --> 00:00:58.900 you build the three fundamental accounting statements 20 00:00:58.900 --> 00:01:01.700 accounting documents the income 21 00:01:01.700 --> 00:01:05.500 statement the p&l very well known profits minus 22 00:01:04.500 --> 00:01:07.300 expenses minus costs 23 00:01:07.300 --> 00:01:08.400 the bottom line. 24 00:01:09.500 --> 00:01:12.500 The second one was named Cash budget. I 25 00:01:12.500 --> 00:01:15.700 will progressively describe how the cash budget 26 00:01:15.700 --> 00:01:18.100 the cash forecast will be transformed into 27 00:01:18.100 --> 00:01:21.300 the cash flow statement. And once you 28 00:01:21.300 --> 00:01:25.200 have understood that there is a film which is about profit p&l another 29 00:01:24.200 --> 00:01:27.700 film which is about cash cash budget 30 00:01:27.700 --> 00:01:30.100 cash flow statement the picture at the 31 00:01:30.100 --> 00:01:34.200 end of the period at the end of the year is named balance 32 00:01:33.200 --> 00:01:36.900 shadeways assets on one side equity 33 00:01:36.900 --> 00:01:38.500 and liabilities on the other side. 34 00:01:39.100 --> 00:01:42.500 You remember also I introduced the first concept of 35 00:01:42.500 --> 00:01:46.200 financial accounting but also financial analysis. 36 00:01:45.200 --> 00:01:48.200 How do you interpret the figures? 37 00:01:49.200 --> 00:01:53.100 The two main Concepts which are introduced Beyond 38 00:01:52.100 --> 00:01:55.700 profit and cash are working capital 39 00:01:55.700 --> 00:01:58.400 requirement again, and also the funds from 40 00:01:58.400 --> 00:02:02.000 operations which makes a link between profit and 41 00:02:01.000 --> 00:02:02.500 cash. 42 00:02:03.500 --> 00:02:06.200 Now we start module 2 what are the 43 00:02:06.200 --> 00:02:09.400 objectives of the module first to introduce a difference between 44 00:02:09.400 --> 00:02:13.100 what is current and what is exceptional current 45 00:02:12.100 --> 00:02:15.900 profit exceptional profit business 46 00:02:15.900 --> 00:02:18.500 as usual and accidents. I would 47 00:02:18.500 --> 00:02:21.700 say second I would like to reinforce all 48 00:02:21.700 --> 00:02:24.500 these skills, which you acquired during the first 49 00:02:24.500 --> 00:02:28.100 module so that you progressively become autonomous 50 00:02:27.100 --> 00:02:31.100 in building by yourself the accounts 51 00:02:31.900 --> 00:02:34.900 I will introduce growth and the 52 00:02:34.900 --> 00:02:37.400 very important point which is consumption of 53 00:02:37.400 --> 00:02:41.500 Financial Resources by growth growth consumes 54 00:02:40.500 --> 00:02:42.500 Financial Resources. 55 00:02:44.300 --> 00:02:47.600 Will develop your skills about interpreting the figures, of course, 56 00:02:47.600 --> 00:02:50.500 it's about financial analysis. It's about key 57 00:02:50.500 --> 00:02:53.900 performance indicators, but it is also understanding 58 00:02:53.900 --> 00:02:55.500 the relevance of them. 59 00:02:56.300 --> 00:02:59.800 And last but not least we'll prepare for growth and 60 00:02:59.800 --> 00:03:02.300 investment which is basically the same. 61 00:03:03.400 --> 00:03:06.300 Not many new Concepts exceptional profit as 62 00:03:06.300 --> 00:03:10.200 opposed to current profit, but also current operating 63 00:03:09.200 --> 00:03:12.500 cash flow as opposed to exceptional. 64 00:03:13.300 --> 00:03:16.700 We'll get a little bit further into the analysis of 65 00:03:16.700 --> 00:03:19.500 economies of scale and will have 66 00:03:19.500 --> 00:03:22.400 a look at some performance indicators a kpis 67 00:03:22.400 --> 00:03:25.900 trying to figure out what the purpose effects 68 00:03:25.900 --> 00:03:28.900 might be if you miss use these kpis. 69 00:03:29.900 --> 00:03:32.900 Same structure as in module 1 by 70 00:03:32.900 --> 00:03:35.500 month in the month of January will 71 00:03:35.500 --> 00:03:38.800 observe the difference between current and exceptional profit. 72 00:03:38.800 --> 00:03:41.300 The months of February will allow me 73 00:03:41.300 --> 00:03:44.600 to show you how to build the financial account the 74 00:03:44.600 --> 00:03:48.200 financial statements. It's going to be a kind of assisted construction 75 00:03:47.200 --> 00:03:50.500 of financial accounts. And then 76 00:03:50.500 --> 00:03:53.500 you are going to do the job by yourself in March. It's going 77 00:03:53.500 --> 00:03:56.500 to be autonomous construction of these financial 78 00:03:56.500 --> 00:03:59.400 statements. In addition to that. There will be the closing 79 00:03:59.400 --> 00:04:00.800 at the end of the quarter. 80 00:04:02.400 --> 00:04:06.000 At the end of March I will also propose you a kind of wrap-up which 81 00:04:05.200 --> 00:04:09.200 is going to discuss with you growth and 82 00:04:08.200 --> 00:04:10.100 investment. 83 00:04:12.100 --> 00:04:15.400 As the tools are concerned there would be a presentation for each and 84 00:04:15.400 --> 00:04:17.800 every month, which is about slides plus audio. 85 00:04:18.700 --> 00:04:21.600 You remember there is a spreadsheet. I strongly 86 00:04:21.600 --> 00:04:24.600 recommend you use a spreadsheet in parallel, but you 87 00:04:24.600 --> 00:04:27.200 will be forced to use a spreadsheet in March when you 88 00:04:27.200 --> 00:04:30.000 build by yourself the account and there will be 89 00:04:30.300 --> 00:04:31.900 a test at the end of the module. 90 00:04:33.200 --> 00:04:36.300 So now we are ready to unfortunately account for 91 00:04:36.300 --> 00:04:39.600 a loss on the inventories in the months of January.