Managing Business Finances
Chapter 17
Financial Planning
Accounting
Financial Records
Financial Plan
Assets
Financial Forecast
Financial Plan – outline of your
expenses, needs, goals and how you
expect to meet them
Financial Planning
Accounting
Financial Records
Financial Planning
Assets
Financial Forecast
Assets – any property or item of value
that your business owns
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Cash
Equipment
Buildings
Supplies
Inventory
land
Financial Planning
Accounting
Financial Records
Financial Planning
Assets
Financial Forecast
Financial Forecast – an estimate of
what business conditions will be like in
the future
Financial Planning
Accounting
Financial Manager
Accounting
Budget
Financial Records
Types of Budgets
Accounting – systematic process of
recording and reporting the financial
position of a business
Financial Planning
Accounting
Financial Manager
Accounting
Budget
Financial Records
Types of Budgets
Financial Manager – person in charge
of a business’s financial planning,
funding and accounting
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Manage funds
Find sources for add’l funds
Plan long-range financial goals
Financial Planning
Accounting
Financial Manager
Accounting
Budget
Financial Records
Types of Budgets
Budget – written plan of what you
expect your income and expenses to be
over a certain period of time
Financial Planning
Accounting
Financial Manager
Accounting
Budget
Financial Records
Types of Budgets
3 Main Types of budgets:
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Start-up Budget – a plan for your income &
expenses from the time your start to when it
makes a profit
Cash Budget – plan for the actual money to
spend and earn daily, weekly, monthly
Operating Budget – plan for how much you
expect to spend and earn over a period of time
Financial Planning
Fiscal Year
Owner’s Equity
Accounting
Income Statement
Financial Records
Balance Sheet
Fiscal Year – an accounting period in
business of one year
Financial Planning
Fiscal Year
Owner’s Equity
Accounting
Income Statement
Financial Records
Balance Sheet
Owner’s Equity – the claim on the
assets by the owner; equals total assets
minus total liabilities
Assets = Liabilities + Owner’s Equity
**Two sides must always balance**
Financial Planning
Fiscal Year
Owner’s Equity
Accounting
Income Statement
Income Statement –
a report of net
income or net loss
over an accounting
period (Profit & Loss
Statement or P&L)
Financial Records
Balance Sheet
Financial Planning
Fiscal Year
Accounting
Owner’s Equity
Balance Sheet –
report of the
financial state of
your business on a
certain date
Income Statement
Financial Records
Balance Sheet