1. Welcome to The TMTC & LAMCON GeMS training program Finance Management

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

3. 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 50 1000 1000 BALANCE SHEET – B Share Capital 450 Fixed Assets 750 Reserves & Surplus300 Current Assets 250 Long Term Loans200 Current Lia 50 1000 1000 The TMTC & LAMCON training program

4. 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

5. 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

6. 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 1. 5 3 mths 4 The TMTC & LAMCON training program

7. 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

8. 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 20 100 100 B/S B LTS 90 LTU 80 STS 10 STU 20 100 100 B/S C LTS 70 LTU 80 STS 30 STU 20 100 100 LTS 4752 LTU 5154 STS 2598 STU 2196 7350 7350 LTS 11670 LTU 11670 STS 3750 STU 3750 15420 LTS 6450 LTU 5460 STS 3300 STU 4290 9750 9750 C A B The TMTC & LAMCON training program

9. 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 20 100 100 B/S B LTS 90 LTU 80 STS 10 STU 20 100 100 B/S C LTS 70 LTU 80 STS 30 STU 20 100 100 The TMTC & LAMCON training program

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

11. 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

12. a LAMCON training program LAMCON counts where money matters Reading a Balance Sheet – Rule 2 } 8 12 10 12 8 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

13. a LAMCON training program LAMCON counts where money matters Reading a Balance Sheet – Rule 2 CRLR A 2.2 : 1 B 1.5 : 1 0.9 : 1 1.1 : 1 CR Norm 2 : 1 LR Norm 1 : 1 The TMTC & LAMCON training program

14. 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 20 100 100 B/S B LTS 90 LTU 80 STS 10 STU 20 100 100 B/S C LTS 70 LTU 80 STS 30 STU 20 100 100 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

15. 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

16. 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