Understanding a Financial Statement / School to Work Employment Plan Understanding a Financial Statement / School to Work Employment Plan Horticulture , 2.02

What kinds of records should businesses keep?  Assets  Liabilities  Net worth  Profit and loss statement  Cash receipts  Non-cash receipts  Invoice

Assets  Things that one owns and completely pays for. Example: Your car after all payments have been made.

Assets  Current Assets-items quickly converted to cash or that will be sold within 12 months – cash – checking – savings – stocks or bonds

Assets  Non-current-items that have a useful life or more than one year – land – machinery – breeding livestock

Liabilities  Things that you owe money to other people for or debts Example: My Visa

Liabilities  Current-debts that are due to be paid this year – fertilizer and feed bills – tractor and building payments – part of the mortgage due this year  Non-Current-debts not due this year – mortgages not due this year

Net Worth  One’s assets minus their liabilities. You have $3000 in the bank, but you owe $1750 for your bills. Your net worth is $

Net Worth  Current Assets + Non-Current Assets=Total Assets  Current Liabilities + Non-Current Liabilities=Total Liabilities

Inventory  An itemized list of things owned by a business with the beginning value and depreciated value

Inventory  Non-depreciable-items that will be used or sold within a year – feed – supplies

Inventory  Depreciable-items that have a useful life of more than one year and lose value because of age, wear or becoming out-of date because of technology advancements.  Land is NOT depreciable property – tractor – computer – chainsaw

Profit and loss statement  A financial statement of a business that reports the profit made by the business or the losses incurred.

Cash receipts  Cash that is paid for services or merchandise.

Non-Cash receipts  Payment for services in other ways than cash.

Invoice  Shows items and prices for things that have been bought from a certain business.

Other business records  Labor  Materials  Travel

Debt-to-Equity Ratio  Used by banks and lending institutions to decide whether or not to lend money to specific people or businesses Debt-to-Equity Ratio = Total Liability Net Worth

School to Work Employment Plan  Factors to consider when selecting a career: – Standard of living pay, location – Personal contact working with people or things? – Educational Requirement – Skills Required

School to Work Employment Plan  Location of employment  Your interest, likes and dislikes  Working conditions  Working hours and time for leisure activities  Retirement benefits  Your health and happiness

Steps in Choosing a Career 1. Consider your interest, abilities and characteristics” 2. Narrow the field of jobs 3. Study the requirements 4. Plan an alternative 5. Prepare a plan for preparation 6. Be willing to pay the price education, dedication 7. Get work experience!