Basics of Balance Sheet, Cash Flow & Income Statements
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Presentation on theme: "Basics of Balance Sheet, Cash Flow & Income Statements"— Presentation transcript:
Slide1
Basics of Balance Sheet, Cash Flow & Income Statements
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Slide2
Balance Sheet #1
Cash Flow
Financial Snapshot
Financial Snapshot
Meeting Financial
Obligations
Good old fashion recordkeeping
Balance Sheet #2
Working Capital
Debt/Asset Ratio
Net Worth
Working CapitalDebt/Asset RatioNet Worth
Income
Statement
(Profitability)
Statement of cash flow
(Sources & uses of money)
Commit This Diagram to Memory
Slide3
Balance Sheet as of [a single date] Consolidated Personal Business
Current Assets
Current Liabilities
Non Current Assets
Non Current Liabilities
Net Worth or Owner Equity
Current
Non Current
Net Worth = Assets - Liabilities
Slide4
Income Statement Structure
RevenuesGross Revenues (example: $500,000)Operating Expenses (example: $250,000)Depreciation Expenses (example: $ 50,000)Total Operating Expenses (example: $300,000)Diff. between revenue & Expenses is Operating Margin ($200,000)Financing ExpensesTotal Financing Expenses (example: $25,000)Net Farm Income from Operations $175,000
Slide5
Key RatiosFrom the Income Statement
Financial efficiency ratios come from the income statement. The following four categories are looked at as a percentage of gross revenues.
Operating expenses—50%
Depreciation expense—10%
Interest expense—5%
Net Farm Income—35%
Slide6
Key RatiosFrom the Balance Sheet
Working CapitalDebt/Asset RatioNet Worth
Green Paper—Balance Sheet Exercise
Benchmark Ratios
Slide7
Your Turn to Fill Out a Balance Sheet
Investing for Farm Families has a very user friendly balance sheet that has a personal balance sheet as well as a business balance sheet. On completion you will see a completed balance sheet and distribution diagram between personal and business assets.
