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    Enterp7a Financial MGMT

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    Vanessa Tattao Isaga
    This document provides an overview of financial management for a technology entrepreneurship business. It discusses key topics such as business models, funding sources, and financial statements. The summary focuses on the business models section: 1) The document discusses 5 key business models - the revenue model, gross margin model, operating model, working capital model, and funding model. These models are important for understanding how the business will generate revenue and manage costs. 2) It provides an example income statement for a company called JetFan Technology Ltd. for its second year of operations. The income statement projects the company's gross revenue, cost of goods sold, operating expenses, and net income before taxes. 3) Financial analysis metrics are covered

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    Enterp7a Financial MGMT

    Uploaded by

    Vanessa Tattao Isaga
    139 views17 pages
    This document provides an overview of financial management for a technology entrepreneurship business. It discusses key topics such as business models, funding sources, and financial statements. The summary focuses on the business models section: 1) The document discusses 5 key business models - the revenue model, gross margin model, operating model, working capital model, and funding model. These models are important for understanding how the business will generate revenue and manage costs. 2) It provides an example income statement for a company called JetFan Technology Ltd. for its second year of operations. The income statement projects the company's gross revenue, cost of goods sold, operating expenses, and net income before taxes. 3) Financial analysis metrics are covered

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    Enterp7a Financial Mgmt

    Original Title

    Enterp7a Financial Mgmt

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    This document provides an overview of financial management for a technology entrepreneurship business. It discusses key topics such as business models, funding sources, and financial statements. The summary focuses on the business models section: 1) The document discusses 5 key business models - the revenue model, gross margin model, operating model, working capital model, and funding model. These models are important for understanding how the business will generate revenue and manage costs. 2) It provides an example income statement for a company called JetFan Technology Ltd. for its second year of operations. The income statement projects the company's gross revenue, cost of goods sold, operating expenses, and net income before taxes. 3) Financial analysis metrics are covered

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    139 views17 pages

    Enterp7a Financial MGMT

    Uploaded by

    Vanessa Tattao Isaga
    This document provides an overview of financial management for a technology entrepreneurship business. It discusses key topics such as business models, funding sources, and financial statements. The summary focuses on the business models section: 1) The document discusses 5 key business models - the revenue model, gross margin model, operating model, working capital model, and funding model. These models are important for understanding how the business will generate revenue and manage costs. 2) It provides an example income statement for a company called JetFan Technology Ltd. for its second year of operations. The income statement projects the company's gross revenue, cost of goods sold, operating expenses, and net income before taxes. 3) Financial analysis metrics are covered

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 17

    Technology

    Entrepreneurship

    Enterprise Mastery #7
    3. Enterprise Mastery
    Business Models
    Funding Sources
    Marketing & Sales
    Production & Supply Chain Management
    Financial Management
    Business Start-up Processes
    Business-enabling Technologies
    Enterprise Operations
    Marketplace

    Corporate Strategy

    Finance Strategy Operations Strategy Marketing Strategy

    Production & Supply


    Chain Management (SCM)

    People Plants Parts Processes


    Materials & Products &
    Customers Services
    Planning and Control

    Input Output

    4
    #1 Business (Revenue) Model

    #2 Gross Margin Model

    #3 Operating Model

    #4 Working Capital Model

    #5 Funding (Financing) Model


    Contents
    Overview of Fianancial Management

    Objectives of Financial Management

    Fundamental Principles

    Financial Reporting

    Income
    Inventory Statement
    Management

    Balance Sheet

    Financial Analysis

    Summary & Applications

    5-5
    Financial
    Management
    aims to maximize
    the wealth of the
    owners of the
    organization .

    5-6
    Task of Financial Manager

    Financial manager’s task is to balance


    Profit = revenue-cost ; and
    Risk = threat of an undesirable outcome

    5-7
    Fundamental Principles For every additional expected return,
    there is an additional risk
    (GAAPP – Generally
    Accepted Accounting The value of money diminishes over time
    Principles & Practices)
    Wealth or value of an organization is
    measured in its assets, not profit.

    Revenue is recognized when earned

    Expenses are recognized by matching them


    with the revenue generated

    Financial figures must be conservative

    All relevant information is disclosed to the


    users of the company’s financial reports.
    The organization is assumed to go on
    forever.

    8
    2 Kinds of Accounting
     Financial accounting - concerned with the
    recording and reporting of economic data and
    activities for an entity. Generates principal
    reports for owners, creditors, governmental
    agencies and the public
     Managerial accounting - uses both financial
    accounting and estimated data to aid
    management in running day to day operations
    and in planning future operations. Focus is to
    provide managers with relevant and timely
    information and reports.

    9
    Financial Statements
    1. Income Statement (Statement of
    Comprehensive Income) - states how much the
    company sold, spent, & profited “during a time”
    2. Balance Sheet (Statement of Financial
    Position) – states the financial condition
    (balances of what the company owns & owes)
    “as of a time.”
    3. Statement of Cash Flow - a financial statement
    that provides a summary of the activity in a
    company‟s cash account over a period of time.
    Divides cash activity into three categories:
    operating, investing, financing.
    4. Statement of Changes in Equity - explains the
    changes in the accounts of the stockholders‟
    equity section of the balance sheet during an
    accounting period. 10
    Format of an Income Statement
    REVENUES - EXPENSES = PROFIT (LOSS)
    <Name of the Company>
    Income Statement
    For the period ended <Date>

    Gross Sales or Revenue Pxxxx


    Cost of Goods Sold (xxx)
    Gross Profit Pxxx
    Other Income xxx
    Total Income Pxxx
    Operating Expenses:
    Rental Expenses (xx)
    Utility Expenses (xx)
    Salary & Wages (xx)
    Other Expenses (xx) (xxx)
    Earnings Before Interest, Taxes, Pxxx
    Depreciation, Amort’n (EBITDA)
    Interest Expenses (xx)
    Depreciation Expenses (xx)
    Amortization Expenses (xx) (xxx)
    Net Income Before Taxes (NIBT) Pxx
    11
    Income Statement
    Accounts
     Gross Sales / Sales Revenue - monetary
    amount of goods and services delivered during
    the accounting period.
     Cost of Goods Sold - amount of direct
    materials, direct labor and factory overhead
    placed in the goods that were delivered during
    the accounting period.
     Other Income - revenues earned from activities
    not associated with the sale of the company‟s
    goods and services arising from the regular
    operations of the business.
     Gross Profit - difference between net sales
    revenue and cost of sales.
    5-12
    JetFan Sales & Gross
    Revenue Target

    5-
    13
    JetFan Projected
    Income Statement

    5-
    14
    JetFan Technology Ltd*
    Income Statement for the year ended December 31, 200X
    (Year 2, in „000 USD)

    Gross Revenue 6,200


    Less: Cost of Goods Sold (3,560)
    Gross Profit 2,640
    Other Income 0
    Total Income 2,640
    Less Operating expenses:
    Wages expense (1,000)
    Rent expense (550)
    Utilties expense (200)
    EBITDA 890
    Interest expense (50)
    Depreciation (20)
    Amortization (10)
    Net Income Before Tax (NIBT) 810
    *USD 1.8M raised, additional Investment: of USD 2.5 MM
    required at start of Year 1 operations
    15
    Financial Analysis:
     Break-Even Analysis (Sales volume required to cover
    CGS and Expenses but zero Net Income)
     Profit Margin Ratio (Fraction of each Dollar of Sales
    that trickles down to Profit)
    = Gross Profit / Gross Sales Rev
     Payback Period (No. of Years for Investment to be fully
    recovered based on projected Income)
    = Total Investment / Average Annual Net Income
     Return on Investment (Investment Profitability over a
    given period as basis for comparing with other
    investments on same period)
    = (Cumul. Net Income during period – Cumul. Investment) /
    Cumulative Investment x 100%
     Financial Ratios
    ◦ Current Ratio = Current Assets / Current Liabilities
    ◦ Debt-to-Equity Ratio = Total Liabilities / Total Equity 5-
    16
    Homework for Week 11

    Prepare a 5-10 minute group presentation with


    Powerpoint slides on topic matching your group #:
    1. Getting web domain names and corporate email accounts
    (Go Daddy, etc)
    2. Website development and hosting basics, tools, subscriptions
    (Weebly.com, Amazon Web Services, etc)
    3. Paid Marketing Online tools (Google, Facebook, OLX, etc)
    4. Free communication & collaboration, mass web
    posting/emails/text blasts (Google hangouts, Skype, etc)
    5. Free office productivity tools (Google apps/docs, Open Office,
    Kolab.org, etc)
    6. Free small business accounting software & tools
    (WaveApps.com, etc)

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