AUTONOMOUS GROUP LEARNING (AGL)
AGL NO. 1 FINANCE FOR
NON - FINANCIAL MANAGERS
DAILY WORK PACK - PART I
Copyright: RGAB/IR 2010/2
S2 ABBREVIATIONS








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IND
SG
CSG
MG
ASS
PL
L
D
LRT
CAI
-
INDIVIDUAL
S MALL GROUP
COMBINED SMALL GROUP
MAIN GROUP
ACCOUNTING STEP BY STEP
PROGRAM LEARNING
LECTURE
DISCUSSION
LEARNING RECALL TAPE
COMPUTER ASSISTED INSTRUCTION
S3 ASSIGNMENT 1.0 - INTRODUCTION (30 minutes)

1.1 SPECIFIC OBJECTIVES
The program provides members with the opportunity to understand
financial terms, techniques and reports so that they can become
better managers.
Learning objectives:





a. Understand accounting language and concepts.
b. Interpret balance sheets and income statements.
c. Use basic financial ratios.
d. Develop confidence in using accounting and financial data .
e. Motivate further study in the future.
S4 1.1 SPECIFIC OBJECTIVES (continued)

The syllabus of the program includes:

accounting terminology, concepts, and reports
liquidity & profitability
evaluating business potential of new ventures and projects
activity analysis & operating statements
reserves and equity
financial forecasting & budgeting
LAPP system of financial analysis.






S5 1.2 AUTOMATED GROUP LEARNING (AGL)

The AGL method is designed to achieve rapid individual
learning using special materials and the stimulus of group
activity without a formal instructor.

The groups use the materials to find the answers to all
problems and questions.
S6 1.3 GROUP ARRANGEMENTS

The work will be done:

IND -
Individually, or

SG -
Small Groups which will change daily, or

CSG -
Combined Small Groups (two small groups together),

MG -
Main Group (for short taped lectures on key learning
points with visual aids).
S7 1.4 SG - SMALL GROUPS

Group names provided on the flip charts.

Please note the name of your SG and names of the
other members.
S8 1.5 LEARNING MATERIALS

(a) Retained by members
Textbook (ASS)
Notebook - for recording every key point
Daily Course Diary
Learning Recall Tape
Articles (2)

(b) Used by not retained by members:
Daily work packs including: introduction, lectures,
cases, exercises and key learning points
S9 1.5 LEARNING MATERIALS (continued)

Use your notebook. Do not mark the Daily Workpack
which must be handed back at the end of each day.

You receive all the materials in your SG.

Don't look ahead in the workpack until you are
specifically asked to do so!
S10 1.6 METHOD


Try to complete every task in the time allowed.
A pattern of learning methods will be used including:
• Programmed learning
•
•
•
•
•
•
•
Case analysis
Lectures
Quizzes
Learning patterns
Homework reading
Learning Recall Tape (LRT)
CAI
S11 1.7 LEARNING PATTERNS - REVIEW
1. Objectives
Language
Ratios
Concepts
Forecasting
Income Statements
Balance Sheets
Financial Health
CONFIDENCE
S12 1.7 LEARNING PATTERNS - REVIEW
2. Learning
continuous activity ....
•
IND
SG
CSG
MG
S13 1.7 LEARNING PATTERNS - REVIEW
3. Methods
Program Learning
Small Groups
Lectures
Combined Small Group
Cases & Exercixes
LRT
Main Group
CAI
LEARNING FOR YOU
S14 1.8 INSTRUCTIONS (15 minutes)

Assemble in SG's to introduce yourself, indicate your past
experience in finance and what you hope to contribute
to and gain from the course.

Complete the registration sheet in the Daily Course Diary.

NOTE: Please check that you have a full set of learning
materials now.
S15 ASSIGNMENT 2.0 - QUIZ (45 minutes)

2.1 INSTRUCTIONS SMALL GROUP WORK

Assemble in SG

Answer the quiz of 100 questions; mark your answers a,
b, c, or d with a clear "x" on the special form provided in
the course diary

Work as quickly as possible but don't guess - leave
blanks. Hand in your answer sheet to the Organizer

Reassemble in MG when the bell rings
S 16 ASSIGNMENT 3.0 - PROGRAMME LEARNING
(60 minutes)

Assemble in SG

Read ASS pages 9 and 10 "How to use the programme"

Read ASS Ch. 1. Do ASS Ch. 2 in writing and aloud

Record significant points in your notebook

Reassemble in MG when the bell rings A
S17 3. 1 INSTRUCTIONS - INDIVIDUAL WORK
(continued)

Work very quickly.

Write the answers in the ASS book; check out one question at
a time.

Don't hesitate to "cheat" when you don't know the answer

In finance a little "cheating" can be very educational ...
S18 ASSIGNMENT 4.0 - LECTURE ON
ACCOUNTING REPORTS

4.1 METHOD
Read aloud, listen and respond
verbally to any questions.
S19 4.2 ACCOUNTING REPORTS

(a) Income Statement (IS)

Profit and Loss Account or Operating Statement
Accounting period is one year






Sales less cost of goods actually sold = gross profit
Gross profit less expenses = net profit
Ratios are thermometers
Gross profit over sales = gross profit percentage
Net profit over sales = net profit percentage
S20 4.2 ACCOUNTING REPORTS (continued)

(b) Balance Sheet (BS)

Situation at the beginning of accounting period

Situation at end of accounting period

Assets of a business are financed by liabilities and owners'
equity
S21 ASSETS AND LIABILITIES

4.3 ASSETS (A)

Things owned by a business which have measurable cost:
cash, accounts receivable (debtors), inventories (stock),
prepayments, equipment, buildings, land, etc.

4.4 LIABILITIES (L)

Amounts due to be paid (cash must be paid to "them"):
accounts payable, trade creditors, other liabilities, taxation
payable, long term liabilities
S22 4.5 OWNERS' EQUITY

Rights of the owners of a business

Initial capital plus profits

Assets less liabilities = owners' equity

Assets less liabilities = owners' equity

Profits increase owners' equity

Losses reduce owners' equity
S23 4.6 EQUITY:DEBT (LIABILITIES) (E:D)
This means equity as distinct from liabilities

Ratio of assets financed from owners equity and liabilities

This is the “gearing” of the company which is critical to
financial health..
S24 4.7 TRANSACTIONS

Each transaction has a dual effect

Assets increase and cash decreases, or

Assets increase and liabilities increase, or

Cash decreases and liabilities decrease
S25 4.8 LEARNING PATTERNS - REVIEW
1. Key Issues
•
CASH
•
•
INVENTORY
ORDERS
S26 4.8 LEARNING PATTERNS - REVIEW
2. Income Statements
•
•
•
C+E + P=S
C +E +P=S
C +E +P=S
S27 4.8 LEARNING PATTERNS - REVIEW
3. Balance Sheets
•
•
•
A
OE
L
= L + OE
= A - L
= A - OE
S28 4.8 LEARNING PATTERNS - REVIEW
4. Transactions
CASH 0
CASH
A +
-
A 0
L+
L -
S29 4.9 INSTRUCTIONS (10 minutes)9

Reassemble in SG

Study the lecture very carefully and record key points in your
notebook

Discuss any outstanding questions in SG

When the bell rings carry on with the case study which follows
S30 ASSIGNMENT 6.0 LECTURE - JOHN MARAIS

6.1 STORY OF THE CASE

John Marais has been in business for 6 months producing a
toy.

He reckons he made a profit of 10,000 and has drawn 50,000
from the business.

He thinks he has done rather well, so let's now review the
accounts.
S31 6.1 STORY OF THE CASE (continued)

First the Income Statement: Sales 40,000, cost 20,000 to
manufacture, giving a gross profit of 20,000. From the gross
profit the expenses of 10,000 are deducted to give a net profit
of 10,000.

In the Balance Sheet: assets of the business were cash,
accounts receivable and inventory totalling 61,900. These
were financed partly by liabilities 36,900 and partly by owners
equity 25,000.

Most of the money for the business was provided by S.O.
Marais. Most of the money has been taken out by John
Marais.
S32 6.2 RATIOS
Gross profit/sales
20,000/40,000
x 100%
x 100%
=
50%
Net profit/sales
10,000/40,000
x 100%
x 100%
=
25%
Net profit/owners equity
10,000/25,000
x 100%
x 100%


=
80% p.a.
(twice 40%)
S33 6.2 RATIOS (continued)

Current Assets: Current Liabilities
61,900 : 16,900 = 4:1

Quick Assets: Quick Liabilities
1,900 : 16,900 = 1:9

(2:1)
(1 1/2:1)
Equity: Debt (Liabilities)
25,000 : 36,900 = 1:1-1/2
(2:1)
S34 6.3 FINANCIAL HEALTH

(a)
Liquidity - current assets to current liabilities are strong
but quick assets to quick liabilities are weak, indicating a
cash shortage = Critical Point.

Equity : Debt - less than 1:1 means that there is not enough
equity in the business = Critical Point.

Drawings of 50,000 in this early stage of the business have led
to a cash shortage = Critical Point.
S35 6.3 FINANCIAL HEALTH (continued)



(b) Activity - sales of 40,000 cost only 20,000 against a
remaining inventory of 60,000.
Thus for one toy sold we have three unsold in inventory.
Production and marketing must be balanced = Critical Point.
S36 6.3 FINANCIAL HEALTH (continued)

(c) Profitability - good, but profit depends upon the value of
the inventory which includes 50,000 of wages. If the inventory
valued at market price is lower than cost (Christmas market
has disappeared) then the inventory value must come down.

Reduction in inventory value reduces the profit. Thus a
reduction from 60,000 to 50,000 in inventory would mean no
profit this year at all! = Critical Point.

(d) Potential - Christmas is over; there is only one product;
the garage is full of unsold toys; the cash is short; payments
to creditors are overdue; management is doubtful = Critical
Point.
S37 6.4 ACHIEVEMENTS AND PROBLEMS

John Marais has started the business and if the inventory can
be sold at least for cost, he has made a small profit.

He has drawn a large salary which is only earned if the
inventory can be sold.

The Christmas trade is over and he may make no sales for the
next few months. He needs cash to pay his creditors. His
inventory is too high and he may never sell it.

He is not managing his finances well and may be bankrupt if
the creditors press for payment.
S38 6.5 PLAN OF ACTION

Get cash to pay the creditors

Stop production and sell off the inventory.

Consider whether the business is viable or product range too
narrow to be worthwhile

Cut the salary to nothing. Look for partner with some money

Go out and sell (or go to work for someone else).
S39 6.6 LEARNING POINTS (continued)

(a)
Cash is more important than profit in running a
business, because without cash the manager can do nothing.

(b)
Ratios are useful in assessing the health of a business as
follows: Liquidity & Gearing, Activity, Profitability and Potential.

(c)
It is not correct to charge all the wages to
manufacturing cost, because this increases the cost of the
inventory .
S39 6.6 LEARNING POINTS (continued)

(d) The inventory is valued at the lower cost or market value

(e) Inventory valuation is the key to profit

(f) High drawings by the owner are bad for an expanding
business.

(g) Look for the story behind the figures. Learn the language
of accounting quickly.

(h) All financial statements are estimates based upon
assumptions. They are not scientific facts.
S40 6.7 LEARNING PATTERNS - REVIEW
1. Key Issues
•
CASH
• INVENTORY
• ORDERS
S41 6.7 LEARNING PATTERNS REVIEW
2. Income Statements
•
•
•
C E P=S
C E P=S
C E P=S
S42 6.7 LEARNING PATTERNS REVIEW
3. Balance Sheets
• A
• OE
• L
= L + OE
= A - L
= A - OE
S43 6.8 INSTRUCTIONS (10 minutes)

Re-assemble in CSG

Study carefully the lecture on the case

Record key learning points in your notebook

Discuss outstanding questions

When the bell rings it is time for lunch
S44 ASSIGNMENT 7.0 - PROGRAM LEARNING
(75 minutes)

7.1 INSTRUCTIONS

Reassemble in new SG. Do ASS Ch. 3 in writing

Review the glossary for any difficulties with new words

Record significant points in your notebook

Reassemble in MG when the bell rings
S45 ASSIGNMENT 8.0 - LECTURE ON BALANCE
SHEETS
8.1
ASSETS
Valuable things owned by a business. Fixed assets are for long
term use in a business; valued at cost less depreciation, not
market value.
Current assets are cash or near cash within one year; valued at
cost or lower realisable (market) value
Other assets are special assets valued at cost or lower;
examples: patents, trade investments, goodwill, etc.
S46 8.2 LIABILITIES
Amounts due to be paid by the business to someone else.
Accounts payable (creditors) are liabilities.
Current liabilities are due for payment within one year.
Long term liabilities are due for payment in more than one year.
Bank loans and overdrafts. Liabilities are normally unsecured
but may have special security on particular assets.
S47 8.3 OWNERS' EQUITY
Assets are financed by either liabilities or owners' equity.
Owners' equity is the capital issued to shareholders
(stockholders), in exchange for cash, plus reserves
accumulated in the business.
Reserves include capital reserves (share premium) or revenue
reserves (retained earnings) or accumulated profits.
Assets less liabilities = owners' equity
Assets = liabilities plus owners' equity
Assets less owners' equity = liabilities
S48 8.4 RATIOS
Ratios are like a thermometer which takes the actual
temperature of a business in relation to some standard
scale.
Good
(a) Liquidity
CA : CL
QA : QL
E:D
(b) Profitability
GP/S
NP/S
NP/OE p.a
2:1
1.5:1
2:1
Up
Up
Up
Average
Poor
1:1
1:1
1:1
1:2
1:2
1:2
Same
Same
Same
Down
Down
Down
S49 8.5 LEARNING PATTERNS - REVIEW
1. Asset Structure
FA
CA
OA
FA
CA
OA
FA
CA
OA
S50 8.5 LEARNING PATTERNS - REVIEW
2. Receivables & Payables
R
-
receives the cash ,...
P
-
pays the cash ...
S51 8.5 LEARNING PATTERNS - REVIEW
3. Funding Structure
CL
LTL
TL
OE
CL
LTL
TL
OE
CL
LTL
TL
OE
S52 8.6 INSTRUCTIONS (10 minutes)
Reassemble in SG
Study the lecture carefully
Discuss outstanding questions
Record key points in your notebook
When the bell rings, carry on with the case study which follows
S53 ASSIGNMENT 10.0 - LECTURE ON CAPE
ELECTRONICS COMPANY
10.1
STORY OF THE CASE
Two engineers had an idea for a new product and while fully
employed elsewhere, they produced and sold a few units to
their employers. They advertised and sold a few more units.
They worked part-time in a garage and made a profit (if we
ignore: labor, equipment, depreciation of patents, overhead,
etc.).
Should they now work in this new business full-time?
S54 10.2 RATIOS - COMPARED WITH A GOOD
STANDARD
(a) Liquidity:
QA : QL 10,380 : 9,870
CA : CL 45,880 : 9,870
E:D
64,800 : 59,870
(b) Activity:
Sales/Assets p.a.
93,750 /124,670 (twice)
Cost of G. S./Inventory
48,620/ 35,490 (twice)
Actual
Good
Ratio Standard
1:1
1 1/2 : 1
5:1
2:1
1:1
2:1
1+
1+
2+
2+
S55 10.2 RATIOS - COMPARED WITH A GOOD
STANDARD (continued)
(c) Profitability:
Actual Standard
Gross Profit/Sales X 100%
45,120/93,750
48%
30%
Net Profit/Sales X 100%
24,800/93,750
27%
5%
Net Profit /Owners Equity (p.a.)
24,800 /64,800 X 100% (twice)
76%
25%
S56 10.3 COMPUTATION OF NEW PROFIT FIGURE
The profit has been incorrectly calculated because there are
no charges for: labor, equipment and patent depreciation
and overhead. A better calculation is as follows:
Profit per accounts for six months
24,800
Less: Labor 520 hours at 30 per hour
15,600
Equipment depreciation (10 yr. life) 1.430
Patent depreciation (4 yr. life)
6,250
Overhead, estimate
1,000 24,280
Corrected profit (pretax)
520
S57 10.4 DEPRECIATION
Distinguish between the patent as an asset owned by Cape
Electronics and the liability to pay for it (at some later date).
Depreciate the asset in order to charge expense with the cost
as the asset is used up, over the "working life".
The "working life" of the patent does not depend upon the law
or the time of payment. The "working life" depends upon the
electronics industry. Such patent is probably not useful after 4
years. Use the term “horizon”.
Until the profit is correctly calculated, ratios are misleading.
S58 10.5 COMMENTS ON THE HEALTH OF THE
COMPANY
Liquidity - the current ratio is reasonable, but the quick ratio
indicates a shortage of cash to pay creditors
Activity - fairly active, but the advertising of 14,630 has only
produced 5 more sales.
Profitability - the profit is nil after adjustment, except as a parttime hobby.
Potential - product limited; market limited; physical facilities in
a garage are not adequate for full scale production;
management may not be adequate.
S59 10.6 ACHIEVEMENTS AND PROBLEMS
Operated for six months and made a small return for their time.
Market for this product may be small and not last very long.
Additional factory facilities and labor are required to produce
in quantity.
Assume the new overheads for full scale operations 120,000 per
year, cost of direct labor/material 1,750 per unit (cheaper
when we buy in quantity).
Calculation shows they must produce and sell over 120 units to
cover salaries of 128,000 each per annum plus the new
overheads.
S60 10.6 ACHIEVEMENTS AND PROBLEMS
(continued)
Selling price
Direct labor & material
Contribution
3,750 per unit
1,750 per unit
2,000 per unit
Fixed cost: 240,000 (salaries 128,000 + overheads 112,000)
Fixed cost/contribution per unit = 240,000/2,000 = 120 units
Is it possible to produce and sell so many units? Would the
low equity base, support the working capital required to
expand production without having a cash crisis?
S61 10.7 PLAN OF ACTION
Market research to determine the potential of the product.
Cash to pay the creditors.
More equity to finance a bigger operation if justified.
Otherwise keep it as a hobby or sell out.
S62 10.8 LEARNING POINTS
a) Accounting depends upon assumptions; figures are only
estimates.
b) Income Statement is not valid unless all costs have been
charged including: labor, depreciation, overhead, etc.
c) Depreciation is based on the working life (“horizon”) of a
fixed asset, not the time of payment. Depreciation of a
patent is difficult because the working life is uncertain. Four
years seems reasonable.
S63 10.8 LEARNING POINTS (continued)
d) Bigger production requires a proper factory and new
overheads of about 112,000 per annum or more, and a larger
"equity base".
e) Cash is more important than profit.
f) Sales orders are vital to the health of a business. They are
not, however, recorded on the balance sheet. What a
difference to financial health, if they had orders for 1000
units,
g) Balance Sheet and Income Statement may be analysed
under the LAPP system.
S64 10.8 LEARNING POINTS (continued)
h) Management competence may be judged from the
financial story.
i) Don't work in small figures (peanuts) not justified by the
underlying assumptions. Financial statements should be in
whole numbers using thousands, not dollars and cents since
accounting is not that accurate e.g. 1,496,293 becomes
1,496,000 or better still 1,496 (thousands).
j) For better communication in financial reports, keep the
number of "digits" reported to a meaningful minimum.
S65 10.9 LEARNING PATTERNS - REVIEW
1. Estimates
• Coconuts ...
• Big figures ...
S66 10.9 LEARNING PATTERNS - REVIEW
2. Horizon for Depreciation
•
•
•
•
Legal life
Payment life
Technical life
Economic life
S67 10.9 LEARNING PATTERNS - REVIEW
3. Cash is the Key
Cash now ...
Profit later
Profit later
Profit later ...
Profit later ...
S68 10.9 LEARNING PATTERNS - REVIEW
4. Inventory Valuation
•
•
•
•
Cost
Realisable Market value
Replacement Market value
Sales orders?
S69 10.10 INSTRUCTIONS (10 minutes)
Re-assemble in CSG
Study carefully the lecture on the case
Record key learning points in your notebook
Discuss outstanding questions
Reassemble in MG when the bell rings
S70 ASSIGNMENT 11.0 - SUMMARY LECTURE FOR
PART 1
11.1
OBJECTIVES
Understand accounting language and concepts
Interpret balance sheets and profit and loss accounts
Use basic financial ratios
Develop confidence in using accounting and financial data
Motivate further study in the future
S71 11.2 ACCOUNTING LANGUAGE
Glossary of ASS is a continuous reference
Two hundred words (only) is the vocabulary
USA/European accounting languages may be compared
S72 11.2 ACCOUNTING LANGUAGE (continued)
USA/European accounting languages may be compared:
receivables
payables
inventory
capital stock
capital surplus
earned surplus )
retained savings )
earnings statement )
operating statement )
income statement )
debtors
creditors
stock
share capital
capital reserve
accumulated profit
revenue reserve
profit and loss account
Records of transactions are converted into accounting
reports by using practical accounting concepts:
cost (assets generally at cost)
consistency/conservatism/comparability
accounting period
going concern (not break-up values)
entity (the business not its workers)
profit realisation
accrual (cash and credit transactions included)
true and fair (as possible)
MATERIALITY (most important of all!)
S74 11.4 ACCOUNTING PERIOD
Try to associate all sales costs, expenses and profits with a
specific accounting period.
All accounting figures are estimates not scientific facts.
S75 11.5 PROFIT AND LOSS ACCOUNT
Sales less cost of goods sold equals gross profit.
Gross profit less selling and administrative expenses equals net
profit for the accounting period.
Profit depends upon: charging all the proper costs and stock
valuation.
S76 11.6 BALANCE SHEET
Assets of the business: how they are financed from liabilities
and owners equity.
Fixed assets valued at cost less depreciation (based on the
horizon of the asset).
Fixed assets such as land and building may have to be
revalued periodically. Accounting periods create uncertainty
and doubt.
Current assets (one year only) valued at cost or lower realisable
(market) value. Inventory valued at the lower cost or market
value.
S77 11.7 HEALTH OF THE BUSINESS
LAPP System
Liquidity
-
cash and gearing are more important than profit.
Activity
-
turning over the assets and the stock ; more activity
requires more assets!
Profitability -
gross and net profit related to sales and owners equity.
Potential
depends upon: market, product ,finance, management,
sales orders, contingent liabilities etc.
-
S78 11.8 BASIC FINANCIAL RATIOS (continued)
Good
Average Poor
a) Liquidity:
CA : CL
QA : QL
E : D
2:1
1+: 1
2:1
1:1
1:1
1:1
1:2
1:2
1:2
Up
Up
Same
Same
Down
Down
b) Activity:
Sales/ Assets
CGS/Stock
S79 11.8 BASIC FINANCIAL RATIOS (continued)
Good Average Poor
c) Profitability:
Gross Profit/Sales
Up
Same
Down
Net Profit/Sales
Up
Same
Down
Net Profit/Owners Equity
Up
Same
Down
S80 11.9 MATERIALITY
Look for the big figures which are significant.
Compare them with the past, the future and the
industry averages to determine the significance of
changes.
Look for "CHANGE" and ask the reasons why.
S81 11.10 LEARNING PATTERNS - REVIEW
1. BS & IS
•
•
Yr. 1
IS
Yr. 2
IS
Yr. 3
IS
•
•
•
•
•
S
C
P
S
C
P
S
C
P
BS
BS
BS
Yr. 4 Yr. 5
IS
IS
S
C
P
BS
S
C
P
BS
BS
S82 11.10 LEARNING PATTERNS - REVIEW
Accounting Concepts
Conservatism
Comparability
Profit realisation
Consistency
Cost
Accounting period
Materiality
IAS
Entity
S83 11.10 LEARNING PATTERNS - REVIEW
3. Financial Formulae
•
•
•
•
A-L
A - OE
OE + L
S-C-E
= OE
= L
= A
= P
S84 11.10 LEARNING PATTERNS - REVIEW
4. More Financial Formulae
•
•
•
•
•
•
•
•
CA:CL
QA: QL
E: D
S/A
CGS/I
GP/S
NP/S
NP/OE
S85 11.10 LEARNING PATTERNS - REVIEW
4. Materiality
• Peanuts ...................................................... and coconuts ...
S86 11.11 INSTRUCTIONS (20 minutes)
Reassemble in SG
Review the Summary Lecture for Part I in the course
diary and discuss questions arising
To get the best out of Part II of the program, try to
complete ALL of the following ... homework tonight ...
S87 11.11 INSTRUCTIONS (continued) ...
very useful ... homework ... tonight ...
Read the articles on the accounting
In the ASS text, review the chapter summaries and the glossary
Do the optional exercises in the course diary and check the answers
Review the summary lecture for Part I in the course diary
Review your notes for Part I of the course and list outstanding questions
to be resolved in Part II
S88 11.11 INSTRUCTIONS (continued)
Final Note for Part I ...
Thank you for working so hard today ....
Tomorrow .... it’s downhill all the way ....
S101 AUTOMATED GROUP LEARNING (AGL)
AGL NO. 1 FINANCE FOR NON-FINANCIAL MANAGERS
DAILY WORK PACK - PART II
Copyright: RGAB/IR 2010/2
S102 ABBREVIATIONS
IND
SG
CSG
MG
ASS
PL
L
D
LRT
CAI
-
INDIVIDUAL
S MALL GROUP
COMBINED SMALL GROUP
MAIN GROUP
ACCOUNTING STEP BY STEP
PROGRAM LEARNING
LECTURE
DISCUSSION
LEARNING RECALL TAPE
COMPUTER ASSISTED INSTRUCTION
S103 ASSIGNMENT 1.0 REVIEW AND SHORT QUIZ
(45 minutes)
1.1
INSTRUCTIONS
Assemble in new SG. Discuss outstanding questions from Part I
Do the short quiz which follows. Work on each question
individually and then compare answers in SG
When all answers have been completed, check with the
correct solution and discuss points arising
Reassemble in MG when the bell rings
S104 ASSIGNMENT 2.0 PROGRAM LEARNING
(75 minutes)
2.1
INSTRUCTIONS
Reassemble in SG. Review the summaries of ASS Ch.
1, 2, and 3
Do Ch. 4 in writing
Record key points in your notebook
Reassemble in MG when the bell rings
S105 ASSIGNMENT 3.0 - LECTURE - INCOME
STATEMENTS (30 minutes
3.1 ACCOUNTING PERIOD CONCEPT
Income statement (profit and loss account, earnings
statement for the accounting period.
Balance sheet at the start and end of the accounting
period. Normally one year.
3.2 ACCRUAL CONCEPT
Sales, cost and expenses may be for cash or credit. Income
statement includes both cash and credit transactions.
S106 3.3 INCOME STATEMENTS AND BALANCE
SHEETS
Income statement shows how the
profit was made.
Balance sheet shows assets and how
they are financed.
S107 3.4 SALES AND GROSS PROFIT
A measure of activity is: Sales/assets
Cost of goods sold means cost of sales.
"Trading Account" is part of income statement which
indicates: sales less cost of sales = gross profit.
Cost of sales for a trading company (buying and
selling finished goods) is: opening inventory plus
purchases of finished goods less closing inventory.
S108 3.4 SALES AND GROSS PROFIT (continued)
Cost of sales for a manufacturing company is different
because it does not purchase finished goods.
Finished goods are manufactured from factory labor,
raw materials and manufacturing overhead.
Manufacturing cost of finished goods must be
adjusted for work in process changes.
S109 3.4 SALES AND GROSS PROFIT (continued)
For a manufacturer, therefore: factory labor + factory materials
used + factory overhead ... plus or minus ... work in process
changes = ... cost of finished goods manufactured for the
period.
This is the same as the "purchase of finished goods" by a trading
company.
Work in process is inventory unfinished. As the amount at the
beginning and end of the accounting period changes, this
difference must be added or deducted to manufacturing cost
incurred, in order to compute cost of finished goods
manufactured.
S110 3.5 NET PROFIT
Net income, net earnings, net profit.
Expenses divided into:
(a) normal operating expenses, and
(b) special non-operating expenses
Operating expenses (including selling, general and
administrative) are normal costs not connected with
manufacturing.
S111 3.5 NET PROFIT (continued)
Non-operating expenses are abnormal costs not connected
with normal operations (e.g., loss of sales of assets, interest
paid).
There may be non-operating income too! (e.g., profit on sales
of assets, dividends received, etc.)
Gross profit less operating expneses = operating profit.
Operating profit less non-operating expenses = profit before
taxes.
Profit before taxes less income tax = net profit.
S112 3.6 RATIOS
Profitability:
Gross Profit/Sales
x 100%
Net Profit/Sales
x 100%
Net Profit/Owners Equity
x 100% (p.a.)
S113 3.6 RATIOS (continued)
Activity:
Sales /Assets = measure of "turnover" of assets (p.a.)
Cost of Goods Sold/Inventory = measure of "turnover"
of inventory (p.a.)
S114 3.7 ACCUMULATED PROFIT
Retained earnings, revenue reserves.
Part of the Reserves in the Owners Equity part of the Balance
Sheet. Appropriation Account or Statement of Retained
Earnings.
Balance brought forward + net profit less dividends = balance
carried forward. Profit increases owners equity.
Reserves increase the equity of the business but not necessarily
the cash; cash may have been used to buy more assets or
pay creditors.
S115 3.8 LEARNING PATTERNS - REVIEW
1. Credit Transactions
•
•
Buy now
Pay later
A + L+
A- L-
S116 3.8 LEARNING PATTERNS - REVIEW
2. Cost of Goods Sold - Trading
• Inventory + Purchases - Closing Inventory =
•
Cost of goods sold
S117 3.8 LEARNING PATTERNS - REVIEW
3. Cost of Goods Sold - Manufacturing
• RM + Labour + Manufacturing Overhead
•
- Work in Process Changes =
• Cost of Finished Goods "purchased" from the
factory
S118 3.8 LEARNING PATTERNS - REVIEW
4. Charges
Type - material, labour, overhead
Function - production, sales, administration
S119 3.9 INSTRUCTIONS (10 minutes)
Reassemble in SG
Study the lecture carefully and record key points in
your note book
Discuss outstanding questions
When the bell rings continue with the case study which
follows
S120 ASSIGNMENT 5.0 - LECTURE ON TOM LYSTER
(30 minutes)
5.1
STORY OF THE CASE
Tom Lyster compares this year's performance with that
of last year, before preparing a budget for next
year, using specific assumptions.
All figures in 000 (thousands) - “coconuts” ....
S121 5.2 EVALUATION OF THIS YEAR COMPARED
WITH LAST YEAR
Sales substantially down (5,000 - 3,240), but gross profit only
slightly down (1,250 - 1,134) due to improved gross profit
percentage (25% - 35%).
Gross profit percentage improved due to lower direct labor
cost and percentage.
Operating profit unchanged (650 - 648) due to substantial cut in
general and administrative expenses.
Non-operating income down due to lower dividend received
(450 - 200)
S122 5.2 EVALUATION OF THIS YEAR COMPARED
WITH LAST YEAR (continued)
Net profit lower than prior year (450 - 324) due to: lower sales,
lower dividend received, despite improved gross profit
percentage, and cuts in general and administrative
expenses.
Causes of all these significant differences should be
investigated.
Company failed to make adequate sales but did well to
improve efficiency; however, falling dividends received
reduced the overall profitability.
S123 5.3 OPERATIONS - BUDGET AND ACTUAL
Net Sales
Less cost of goods sold:
Direct labor
Materials
Depreciation
Manufacturing overhead
Gross Profit
Actual
000 %
3,240 100
Budget
000 %
4,000 100
810 25
486 15
130
4
680 21
2,106 65
960
600
106
748
2,414
24
15
3
18
60
1,134
1,586
40
35
S124 5.3 OPERATIONS (continued)
Gross Profit
Operating expense:
Selling
General & administrative
Operating Profit
Non-operating income & expense:
Dividends received
Interest paid
Profit before taxes
Income Tax
Net Profit 000
Actual %
1,134 35
292
194
486
648
9
6
15
20
200
7
(200) (7)
648 20
324 10
324 10%
Budget %
1,586 40
392 10
240 6
632 16
954 24
400
(100)
1,254
627
627
10
(3)
31
16
15%
S125 5.4 COMMENTARY - BUDGET COMPARED TO
ACTUAL
Sales increase (3,240 - 4,000)
Gross profit percentage increase (35% - 40%)
Operating profit increase
Non-operating income increased substantially (200 - 400) yet
interest paid reduced by half (200 - 100)
Net profit increase by amount (324 - 629) and percentage (10%
- 15%) due to sales, gross profit percentage, and dividends
received.
S126 5.4 COMMENTARY - BUDGET COMPARED TO
ACTUAL
Ratios:
Gross Profit/Sales
Net Profit/Sales
ACTUAL
1,134/3240
= 35%
BUDGET
1,586/4000
= 40%
324/3240
= 10%
629/4000
= 15%
S127 5.5 LEARNING POINTS
(a) Sales less cost of goods sold = gross profit less operating
expense = operating profit.
(b) Operating expense = selling, general and administrative
(c) Operating profit less non-operating income and
expense = profit before tax.
(d) Non-operating income may be: dividends received or
interest received or profit on sale of assets; non-operating
expense is: interest paid, special losses, loss on sale of
assets.
S128 5.5 LEARNING POINTS (continued)
(e) Profit before tax less income tax = net profit (net earnings or
net income).
(f) To evaluate the income statement (operating statement)
compare significant items with previous year or budget r
industry, by amount and percentage.
(g) Concentrate on: sales, gross profit, operating expense,
operating profit, non-operating income and expense, net
profit.
S129 5.5 LEARNING POINTS (continued)
(h) Distinguish operating profit (OP) from net profit (NP). Net
profit should be the total profit from all sources for the year
after income tax.
(i) Non-operating income may materially affect the net profit
of the period.
S130 5.5 LEARNING POINTS (continued)
(j) Forecast a future income statement when given: sales,
ratios, estimates.
(k) Distinguish trading from a manufacturing company;
"purchases of finished goods" are "manufactured" in the
factory.
S131 5.6 LEARNING PATTERNS - REVIEW
1. Income Statements
•
•
•
•
S - CGS
GP - S, G & A
OP - NOP or +NOI
PBT - IT
= GP
= OP
= PBT
= NP
S132 5.6 LEARNING PATTERNS - REVIEW
2. Comparison is the Key
Past
Budget
Industry
S133 5.6 LEARNING PATTERNS - REVIEW
3. Forecasting
•
•
•
•
Sales
Ratios
Income Statements
Balance Sheets
S134 5.7 INSTRUCTIONS (10 minutes)
Reassemble in CSG
Study the lecture on the case and resolve outstanding
questions
Record key points in your notebook
Reassemble in MG when the bell rings
S135 ASSIGNMENT 6.0 - BILL BROWN (30 minutes)
6.1
INSTRUCTIONS
Reassemble in SG
Study the case and individually answer all the questions (on
the worksheet in the diary)
Compare your answers in SG
When the bell rings, stop for lunch! After lunch, check with
the correct solutions and discuss outstanding questions
S136 ASSIGNMENT 7.0 PROGRAM LEARNING
(30 minutes)
7.1
INSTRUCTIONS
Reassemble in new S. Do Assignment Ch. 5 in writing
Review the summary and glossary
Record outstanding questions in your notebook
Reassemble in MG when the bell rings
S137 ASS. 8.0 - LECTURE - The Package of
Accounting Reports
8.1 OBJECTIVES
True and fair view (old idea)
Fair in accordance with IAS (International Accounting
Standards) - the new view!
Materiality
Judgement
Estimates not scientific facts
S138 8.2 THE PACKAGE
Balance sheet at beginning
Income statement for the period
Statement of accumulated profit for the period
Balance sheet at end
Cash Flow and Funds Flow (covered in the next AGL)
S139 8.3 STATEMENT OF ACCUMULATED PROFIT
Retained earnings statement. Appropriation account
Connects one balance sheet with another
Balance brought forward plus net profit less dividends equals
balance carried forward
Special charges to accumulated profit (i.e. not charged via the
income statement) need special investigation!
S140 8.4 METHOD OF FINANCIAL ANALYSIS




Understand the language
Determine the story behind the figures
Compare figures and ratios against standards
Concentrate of material (significant) items (coconuts!)

Ask questions
S141 8.5 LAPP SYSTEM OF FINANCIAL ANALYSIS
(a) Liquidity
Rough Standard
Current Assets: Current Liabilities
Quick Assets: Quick Liabilities
Equity : Debt
2:1
1 1/2 : 1
2:1
S142 8.5 LAPP SYSTEM OF FINANCIAL ANALYSIS
(continued)
(b) Activity:
Rough Standard
Sales/Assets p.a.
1 or better
Cost of Sales/Inventory p.a.
2 or better
Receivables/Sales x 360 days
steady or decreasing
Payables/CGS x 360 days
steady or decreasing
S143 8.5 LAPP SYSTEM OF FINANCIAL ANALYSIS
(continued)
(c) Profitability:
Rough Standard
Gross Profit/Sales
steady or increasing
Net Profit/Sales
steady or increasing
Net Profit/Owners Equity
steady or increasing
S144 8.5
LAPP SYSTEM OF FINANCIAL
ANALYSIS (continued)
(d) Potential:
Product
Market
Facilities (human and physical)
Management
Finance
Sales Orders
Contingent Liabilities
Trade Name
Patents
S145 8.6 COMPARISON - KEY TO FINANCIAL
ANALYSIS
Compare the amounts and ratios against a standard:
Ask: What is important? Did it change? Why did it
change?
Standard may be: past, budget, industry average
S146 8.7 POTENTIAL FOR THE FUTURE
Forecast forward to show what will happen under a
range of specific assumptions.
Then do a PFD ... to avoid EI ... Coconuts ...
S147 8 .8 LEARNING PATTERNS - REVIEW
1. Reports
• UK/USA/Germany/Russia .... IAS
S148 8.8 LEARNING PATTERNS - REVIEW
2. The Package
•
•
•
•
•
BS
IS
Cash flow
Funds flow
BS
S149 8.8 LEARNING PATTERNS - REVIEW
3. L.A.P.P.
Liquidity and Gearing
Activity
Profitability
Potential
S150 8.8 LEARNING PATTERNS - REVIEW
4. Effect of Expansion
•
•
Sales
Inventory & Receivables
S151 8.9 INSTRUCTIONS (10 minutes)
Reassemble in SG
Study the lecture carefully and record key points in
your notebook
Discuss outstanding questions
When the bell rings, carry on with the case study which
follows
S152 ASSIGNMENT 10.0 - LECTURE - SPECIAL SUPPLY
COMPANY (30 minutes)
10.1
STORY OF THE CASE
A businessman expands his business and seeks a loan from the
bank. He forecasts a need of 30,000 but the bank lends him
75,000. Why?
His results show increased sales over forecast and slightly
increased profits.
However, dividends use up necessary cash; inventory is high;
creditors (payables) are stretched. The equity:debt
relationship is weaker. Was the expansion really worthwhile?
S153 10.2 RATIOS
(a) Liquidity
CA : CL
QA : QL
E:D
Past
Actual
Current
Forecast
Current
Actual
Comments
4.9 : 1
1.7 : 1
4.5 : 1
3.1 : 1
1.1 : 1
2.8 : 1
1.7 : 1
.5 : 1
1.0 : 1
Good
Critical
Average
S154 10.2 RATIOS (continued)
Past
Actual
(b) Activity
S/A p.a.
CGS /Inv. p.a.
Receivables (drs.)
Days of Sales
Payables (crs.)
Days of CGS
3.4
3.8
Current
Forecast
3.3
4.0
24
30
14
9
Current
Actual
3.0
3.3
Good
Fair
29
Good
48
Poor
(losing cash discounts?)
S155 10.2 RATIOS (continued)
Past
Current Current
Actual Forecast Actual
(c) Profitability
GP/S
NP/S
NP/OE p.a.
35.0
4.3
18
37.0
5.6
25
33.5
4.4
26
Poor
Poor
Good
S156 10.3 HEALTH OF THE COMPANY
Liquidity - not too good because dividends and
inventory have used up existing cash; cannot
conveniently pay back the 25,000 due in two weeks
to the bank.
Activity - very active; sales increase has led to
increased inventory.
S157 10.3 HEALTH OF THE COMPANY (continued)
Profitability - slightly above forecast in amount;
margin percentage has fallen with the increase in
sales; however, return on equity good because
leverage (GEARING - E : D) high.
Potential - sales potential good; could lead to
increased working capital requirements; cash
problems and a weaker equity : debt ratio.
S158 10.4 STANDARDS OF PERFORMANCE
Compare actual last year, with forecast last year to
measure management effectiveness.
Compare actual last year, with actual of the previous
year to measure the trend of operations.
S159 10.5 EQUITY : DEBT POSITION
Change from 4.5 : 1 to l : 1 indicates a debt capacity
used up.
If sales increase even further, the need for cash will
rise and this ratio will become unhealthy, i.e., 1 : 2.
Cash and E : D ratio are serious problems although the
profit is better than the previous year.
S160 10.5 EQUITY : DEBT POSITION (continued)
Increase in sales requires more assets - ALWAYS!!
If sales increase even further, even more assets will be
required;
Can only be financed from liabilities since profit is not
retained sufficiently to increase the equity.
S161 10.6 PLAN OF ACTION
(a) Company (always seven alternatives!)
Postpone repayment of 25,000 or stretch payables
Hold back sales or get more equity capital
Hold back dividends during rapid expansion , when
cash flow from profits is needed to increase the
equity base
S162 10.6 PLAN OF ACTION (continued)
(b) Bank
Decide if company is a worthwhile client or not
Decide if long term bank loan could be safe
Decide if another bank would give the loan
Then (a) above
S163 10.6 PLAN OF ACTION (continued)
KEY NOTES:
The causes of financial difficulty were: sales
expansion too quickly, dividends which used up the
cash flow and too low equity base for the sales level.
There was a clear failure of PFD and EI ...
There are always seven alternatives to EVERY financial
problem ... seek them out BEFORE deciding what to
do ...
S164 10.7 LEARNING POINTS
(a)
Increased sales lead to increased inventories and
receivables.
(b)
Increased sales at falling margins may not necessarily
improve profit but do increase the need for financial
resources.
(c)
Dividends may not be healthy in times of expansion
when cash is extremely short.
(d)
Compare financial statements against budget or against
forecast to measure management performance.
S165 10.7 LEARNING POINTS (continued)
(e)
Compare financial statement against the previous year
to measure the trend of the company's activities.
(f)
Expanding sales at low profit levels emphasise the need
for a bigger equity base (more capital).
(g)
Number of days sales in receivables and the number of
days of cost of goods sold in payables are useful measures of
activity and control.
S166 10.7 LEARNING POINTS (continued)
(h) Need to forecast future income statement and balance
sheet to measure the forward effects of higher sales activities.
(i)
Seek seven alternatives to every finance problem ....
(j) Always do a PFD ... and try to avoid EI ... especially for the
coconuts ...
S167 !0,8 LEARNING PATTERNS - REVIEW
1. Effect of Expansion
•
•
Sales
Inventory & Receivables
S168 10.8 LEARNING PATTERNS
2. Sales, Assets and Gearing
•
•
A
L
OE
A
L
OE
S169 10.8 LEARNING PATTERNS
3. Dividend Effects
•
•
A
L
OE
A
L
OE
S170 10.8 LEARNING PATTERNS
4. Control of Receivables & Payables
• Sales
• Days of Receivables
•
•
Purchases
Days of Payables
S171 10.9 INSTRUCTIONS (10 minutes)
Reassemble in SG
Study the lecture on the case and resolve outstanding
questions
Record key points in your notebook
Reassemble in MG when the bell rings
S172 11.0 - QUIZ (45 minutes)
11.1
INSTRUCTIONS
Reassemble in SG. Do the quiz of 100 questions on the answer
sheet in the diary
Check your answer with the organiser and resolve outstanding
questions
Complete the first feedback form in the course diary and give it
to the organizer. Reassemble in MG when the bell rings
S173 12.0 ASSIGNMENT - SUMMARY LECTURE FOR
PART II (30 minutes)
12.1 WORK COMPLETED
ASS
Package of accounting reports
Basic financial analysis
S174 12.2 POINTS ON THE CASES
Tom Lyster
Analysis of profit and loss accounts
Ratios: GP/S and NP/S
Comparison with past years, budget and industry averages
Forecasting a future profit and loss account based on
assumptions of: sales, ratios, estimates
S175 12.2 POINTS ON THE CASES
Bill Brown
Interpretation of financial statements
Par and book value of owners equity
E.P.S.
S176 12.2 POINTS ON THE CASES (continued)
Special Supply Company
Comparison of financial statements against past and forecast
figures
Ratio analysis
Effect of increased sales on assets required
Deterioration of E : D ratio
Bank problems
Dividend reduction to save cash
Need for equity base for expansion
S177 12.3 MATERIALITY
Compare data by amounts and ratios
Concentrate on the big figures (coconuts!)
Compare them against a standard (past, forecast,
or industry average)
Find out why they changed
S178 12.4 TRENDS TO BE EXPECTED IN A HEALTHY
COMPANY
Sales and profits increase. Profitability ratios increase
Inventory and receivables in relation to sales
Equity : Debt (2 : 1 strong) but not usually less than 1 : 1
Note: "In the EEC of the 1990's, the "health" of a business
may well depend upon keeping up with both national and
international industry averages ... "
S179 12.5 BALANCE SHEET
Fixed assets and current assets financed by liabilities and
owners equity. Investigate how and why the assets are
valued! Should they be "revalued" to more realistic
current values?
Notes on income tax :
In some countries, there may be a long delay in actually
paying corporation tax on profits; this may lead to two
figures for income tax liability in the balance sheet: current
and deferred.
Where the reported NP is (by custom) the same as the NP
for tax purposes, then ALWAYS ask for a reconciliation
with NP according to IAS!
S180 12.6 PROFIT AND LOSS ACCOUNT
Sales less cost and expense gives profit for the accounting
period.
Distinguish operating (normal) profit from non-operating
profits and losses.
Investigate profit and losses NOT charged to the income
statement but charged to:
a. Accumulated profit
b. Capital reserve
S181 12.6 PROFIT AND LOSS ACCOUNT
(continued)
In some countries published financial statements
often do not reveal gross profit or identify
operating expenses, and sometimes simply follow
the tax laws rather than good accounting ....
So from 2000 onwards, they should ALWAYS show a
reconciliation of the profit figure, with
"International Accounting Standards" ... local
national standards are NOT good enough ....
S182 12.7 RATIOS - SUBJECT TO INDUSTRY
AVERAGES
(a)
Rough Standard
Good
Average
Liquidity & Gearing
CA : CL
QA : QL
E:D
2:1
1+: 1
2:1
1:1
1:1
1:1
Poor
1:2
1:2
1:2
S183 12.7 RATIOS - SUBJECT TO INDUSTRY
AVERAGES (continued)
Rough Standard
Good
Average
Poor
(b) Activity
S/A p.a.
CGS/I p.a.
Receivables Days of Sales
Payables Days of CGS
2
3
1
2
1/2
1
30
60
120
30
60
120
S184 12.7 RATIOS - SUBJECT TO INDUSTRY
AVERAGES
Rough Standard
Good
Average
Poor
(c) Profitability:
GP/S
NP/S
NP/OE
40%
10%
25%
20%
5%
15%
5%
1%
5%
Note: The above are only rough standards; much
better standards are: industry averages, budgets or
forecasts or past results
S185 12.7 RATIOS - SUBJECT TO INDUSTRY
AVERAGES
(d)
Potential
Product, Market, Facilities, Management and Finance
etc.
NOTE: Three items not recorded in the financial statements
are critical to financial health:
1. Sales orders on hand (which confirm that the business is
indeed a “going concern“)
2. Contingent liabilities (which may wipe out the OE) !!!
3. Forex & risk management (AGL 6)
S186 12.9
CONCLUSIONS
• This program was designed to help you to develop
financial language, concepts and confidence and to
motivate you toward further study and practice in the
future.
• Financial analysis helps to tease out the questions to ask;
the layout of the financial statements is not important,
provided you have the confidence to find your way
around the data.
• Cash (liquidity and gearing) is more important than profit.
Sales orders outstanding and inventory valuation are the
keys to profit! (Orders outstanding effect the inventory
valuation which can have an important effect on profit).
S187 12.9
CONCLUSIONS (continued)
• Profit must be judged in relation to target or budget or
industry ratios, not merely last years performance.
• Financial statements are based on accounting concepts
(which are as flexible as proverbs - one for every
occasion!). However, always ask for a reconciliation of the
net profit, with "International Accounting Standards" and
investigate any differences arising.
• Figures are only estimates; compare them against a useful
standard to determine their significance. Don't pretend to
be too accurate! Look after the “coconuts” not the
“peanuts: ...
S188 12.9
CONCLUSIONS (continued)
• Try to find out management's objectives in preparing the
specific financial statements that you study (taxes?
shareholders? bank? mergers? efficiency? etc.).
• Study the "notes to the financial statements" very carefully!
• Question the valuation of the assets. Always consider the
effect of inflation on asset values and profits during the
accounting period.
• Look out for possible manipulation, which is often politely
referred to as "aggressive" or "creative" accounting.
S189 12.9 CONCLUSIONS (continued)
Audit - check that financial reports have
been audited by a firm that is professionally
recognised, independent and adequately
paid, to do a full timely ... audit, and to report
freely to International Auditing and
Accounting Standards ...
S190 12.9 CONCLUSIONS (continued)
• Look for timely financial reports, completed and audited
within two months after the end the accounting period.
• Long delays in producing and publishing financial
statements (months or even years) are always justification
for "concern" ... regardless of the reasons suggested ...
• Seven alternatives to every financial problem, PFD, EI,
coconuts and peanuts .... and other conclusions ... from
you and your SG?
S191 FINAL NOTES
This ends our AGL program; the first of a six part series.:
AGL 1
AGL 2
AGL 3
AGL 4
AGL 5
AGL 6
-
Finance for Non-financial Managers
Cost Control
Planning and Budgetary Control
Capital Investment Analysis
Management of Working Capital
Forex & Risk Management
Some of the programs are now available in several EEC languages. Similar
AGL programs in Business Policy and in Inter-cultural Communication are
being used by major international companies.
S192 FINAL NOTES (continued)
We hope the AGL experience has inspired you to develop
your skills by practical application.
Thank you for your interest and hard work. Keep ASS
glossary handy as a reference for accounting language.
and read the WSJ (Wall Street Journal) every day ... its the
best MBA program we know ... after HBS ...
We hope that you have enjoyed the AGL experience and
that it motivates you to read widely in finance and
accounting and to continue your studies in the future.
S193 FINAL NOTES (continued)
Now reinforce your learning from the program by
following the LRT (Learning Recall Tape) routine, as
explained by the organizer, during the days
following completion of the AGL program.
Then please send the Final Feedback Summary on
day 28, by email to robertboland@wanadoo.fr or
to: Dr. Bob Boland: 33 450 40 8982 who responds
to all AGL questions and supplies latest versions
of all learning materials in various languages.
S194 FINAL NOTES (continued)
We trust that you have found AGL to be both
"efficient" (doing things right) and "effective"
(doing the right things).
Thank you for being a member of our program.