Welcome to The TMTC & LAMCON GeMS training program Finance Management

a LAMCON training program LAMCON counts where money matters Rule 2 Reading A Balance Sheet The TMTC & LAMCON training program

a LAMCON training program LAMCON counts where money matters BALANCE SHEET – A Share Capital 150 Fixed Assets 750 Reserves & Surplus100 Current Assets 250 Long Term Loans700 Current Lia BALANCE SHEET – B Share Capital 450 Fixed Assets 750 Reserves & Surplus300 Current Assets 250 Long Term Loans200 Current Lia The TMTC & LAMCON training program

a LAMCON training program LAMCON counts where money matters B/S Share Capital Reserves & Surplus Long Term Loans Fixed Assets Current Assets Current Liabilities The TMTC & LAMCON training program

a LAMCON training program LAMCON counts where money matters Reading a Balance Sheet – Rule 2 Share Capital Fixed Assets Reserves Long Term Loans Current Liabilities Current Assets BALANCE SHEET LTS STS LTU STU The TMTC & LAMCON training program

a LAMCON training program LAMCON counts where money matters Reading a Balance Sheet – Rule 2 Working Capital Cycle 3 mths 1 mth 3 mths 1 mth 15 days 1 mth One cycle takes : No. of cycles in a yr : 8 mths mths 4 The TMTC & LAMCON training program

a LAMCON training program LAMCON counts where money matters Reading a Balance Sheet – Rule 2 Share Capital Fixed Assets Reserves Long Term Loans Current Liabilities Current Assets BALANCE SHEET LTS STS LTU STU The TMTC & LAMCON training program

a LAMCON training program LAMCON counts where money matters Reading a Balance Sheet – Rule 2 B/S A LTS 80 LTU 80 STS 20 STU B/S B LTS 90 LTU 80 STS 10 STU B/S C LTS 70 LTU 80 STS 30 STU LTS 4752 LTU 5154 STS 2598 STU LTS LTU STS 3750 STU LTS 6450 LTU 5460 STS 3300 STU C A B The TMTC & LAMCON training program

a LAMCON training program LAMCON counts where money matters Reading a Balance Sheet – Rule 2 A has used LTF for LTP & STF for STP B has used a part of LTF for STP C has used a part of STF for LTP B/S A LTS 80 LTU 80 STS 20 STU B/S B LTS 90 LTU 80 STS 10 STU B/S C LTS 70 LTU 80 STS 30 STU The TMTC & LAMCON training program

a LAMCON training program LAMCON counts where money matters Reading a Balance Sheet – Rule 2 Working Capital Cycle The TMTC & LAMCON training program

a LAMCON training program LAMCON counts where money matters Cash Drs Inv Reading a Balance Sheet – Rule 2 } Liquid CA Liquid Ratio (LCA : CL) should be minimum 1:1 Non-Liquid CA Current Ratio (CA : CL) should be about 2 : 1 Cash Drs Inv B/S A STS 20 STU 20 B/S B STS 10 STU 20 B/S C STS 30 STU 20 The TMTC & LAMCON training program

a LAMCON training program LAMCON counts where money matters Reading a Balance Sheet – Rule 2 } Cash Drs Inv Liquid Ratio (LCA : CL) should be minimum 1:1 Current Ratio (CA : CL) should be about 2 : 1 Cash Drs Inv B/S A STS 20 STU 20 B/S B STS 10 STU 20 B/S C STS 30 STU 20 The TMTC & LAMCON training program

a LAMCON training program LAMCON counts where money matters Reading a Balance Sheet – Rule 2 CRLR A 2.2 : 1 B 1.5 : : : 1 CR Norm 2 : 1 LR Norm 1 : 1 The TMTC & LAMCON training program

a LAMCON training program LAMCON counts where money matters Reading a Balance Sheet – Rule 2 B/S A LTS 80 LTU 80 STS 20 STU B/S B LTS 90 LTU 80 STS 10 STU B/S C LTS 70 LTU 80 STS 30 STU A has used LTF for LTP & STF for STP B has used a part of LTF for STP C has used a part of STF for LTP The TMTC & LAMCON training program

a LAMCON training program LAMCON counts where money matters Reading a Balance Sheet – Rule 2 A healthy company must : 1. use LTFs for LTPs 2. use STFs for STPs may 3. use LTFs for STPs but 4. should never use STFs for LTPs The TMTC & LAMCON training program

a LAMCON training program LAMCON counts where money matters Reading a Balance Sheet – Rule 2 maintain a current ratio (i.e. CA : CL) of about 2 : 1 maintain a liquid ratio (i.e. LA : CL) of a minimum of 1 : 1 A healthy company must : The TMTC & LAMCON training program