Topics Covered Business Costs Revenue Profit Expenditure Break Even Analysis Budgeting Cash Flow Forecast Profit & Loss Balance Sheet Maximising Profits.

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Presentation transcript:

Topics Covered Business Costs Revenue Profit Expenditure Break Even Analysis Budgeting Cash Flow Forecast Profit & Loss Balance Sheet Maximising Profits

UNIT TITLE:Unit 2:Finance for Business LESSON TITLE:Balance Sheet LEARNING AIM: C COMPETENCY FOCUS: Key Skills (L5): you will be able to develop your numeracy skills to calculate financial transactions of a business and to interpret financial data. Learning Objectives By the end of the lesson, you should be able to… LO1) To describe the purpose of a balance sheet LO2) To complete a balance sheet from information provided LO3) To analyse financial statements for a small business and suggest appropriate actions that the business can take to succeed.

Competence levelDescriptor Autonomous I can delve deeper into my calculations by fully explaining how my calculations explain the financial state of the business and I will evaluate how effective/ineffective their business activities have been for the organisation and make justified recommendations for improvement. Advanced As below but additionally I can use my calculations to begin to analyse the activities of my focus organisation and recommend strategies for improvement. Strong As below but additionally I can fully explain what the calculations show and explain the financial state of the business. Regular I can correctly input data into a balance sheet, calculate totals and then begin to explain what the calculations show. GuidedThrough basic calculations, I can input data correctly into a balance sheet. I can recognise the layout of the Balance Sheet, input data correctly and explain what the figures show:

What is a Balance Sheet? A balance sheet records where the business got its money from and what it has done with it. The two balance out exactly! It shows the value of all assets and capital on a particular date (last day of financial year – 31 st March)

Assets: All of the premises, machinery, equipment, stocks and cash owned by the business at a given time. Liabilities: The debts of the business Equity: The amount invested in the business.

Fixed Assets Vs Current Assets Fixed Assets: Assets that are owned and are expected to be kept for more than 1 year or many years. Current Assets: Assets that can be converted in to cash more easily and are only retained for less than 1 year. These are listed in order of liquidity (easiest to convert in to cash)

Current Liabilities Current liabilities are bills the firm has to pay soon (within 1 year) Included in current liabilities are: -creditors (money owed to suppliers for stock) - Corporation tax (to Government) - Unpaid dividends to shareholders

Current Assets Net Current Assets(working capital) = Current Assets – Current Liabilities Net assets (what the company is worth) = Net current assets + fixed assets

TASK 1 Complete ‘Big Tasty Burger’ Case Study [40mins]

TASK 2 Complete ‘The Biscuit Factory’ Case Study [40mins]

TASK 3 Use the revision guidance notes to produce your own revision notes ready for the exam! [40mins]