Introduction to Entrepreneurship Class Details

• Instructor: Arabella Pollack

• Email: arabella.pollack@hunter.cuny.edu

• Class Date: February 28, 2025

Class Announcements

• Upcoming Class (March 7):

  • Asynchronous class (no in-person attendance)

  • Zoom recording will be available

  • Zoom link to be shared via BrightSpace

  • Classroom open for teamwork on Accounting assignment

Course Plan Overview

• Main Topics Covered:

  • Entrepreneurial Process

    • Identifying Opportunities

    • Competitive Advantage

    • Financing

    • Business Plan

    • The Pitch

    • Cashing In

  • Business Ethics

  • Core Business Fields

    • Accounting

    • Sales

    • Production

    • Supply Chain

    • Marketing

    • Finance

    • HR

    • Support Functions

Learning Objectives

By the end of today's class, students will:

• Understand the purpose of accounting and its importance.

• Differentiate between various accounting roles and types.

• Recognize the concepts of GAAP and IFRS.

• Identify the three main financial statements and know where to locate them.

• Learn essential terminology associated with financial statements.

Importance of Accounting

• Accounting Functionality:

  • Evaluate current financial health

  • Learn from financial history

  • Project future outcomes

  • Enhance decision-making capabilities

• Tracking Financial Transactions:

  • Essential for informed business decisions.

Roles within Accounting

• Accounting Department Structure:

  • Controller: Manages day-to-day operations, reports to the CFO, may serve as CFO in small firms.

  • Comptroller: Similar to Controller but typically in non-profits/government.

  • Chief Accounting Officer: Executive level, oversees all accounting departments in larger companies.

Types of Accounting

• Financial Accounting:

  • Focused on external users (shareholders, creditors).

  • Prepares comprehensive financial reports.

• Managerial Accounting:

  • Guides internal decision-making and operations.

  • Involves methods for auditing, tax preparation, and consulting.

Accounting Standards

• GAAP vs IFRS:

  • US Generally Accepted Accounting Principles (GAAP) are crucial for maintaining consistency in financial reporting.

  • IFRS represents international standards for financial reporting, ensuring transparency and comparability.

Financial Statements Overview

• Three Main Financial Statements:

  1. Balance Sheet: Snapshot of assets, liabilities, and equity at a given point.

  2. Income Statement (P&L Statement): Shows revenue, expenses, and profit over a period.

  3. Cash Flow Statement: Tracks cash generated and used during a period.

Key Concepts in Financial Statements

• The Accounting Equation:Assets = Liabilities + Owner's Equity

  • Indicates financial health.

  • Variations:

    • Assets > Liabilities: Positive equity.

    • Liabilities > Assets: Indicates potential bankruptcy.

Key Financial Terms

• Balance Sheet Components:

  • Assets: What the business owns.

  • Liabilities: What the business owes.

  • Owner’s Equity: Difference between assets and liabilities.

• Income Statement Terms:

  • Net Income: Total profit after expenses.

  • Gross Profit: Sales minus cost of goods sold (COGS).

  • Terms include Operating Expenses, EBIT, EBITDA, EPS.

• Cash Flow Statement Insights:

  • Identifies cash flows from operations, investments, and financing activities.

  • Capital Expenditure (CapEx): Spending on long-term assets.

Financial Viability Considerations

• Cash Flow Management:

  • Cash flow is crucial for meeting business expenses.

  • A profitable business can fail without sufficient cash to cover day-to-day operations.

• Examining Profitability vs Liquidity:

  • A business might be profitable on paper but face cash shortages, impacting its operation.

  • Example: Companies that take extended periods to convert sales to cash may struggle.

Course Context

• BUS 225: Survey of Accounting:

  • Designed for non-accounting majors.

  • Core course for Business Certificate and Arts Management and Leadership Certificate.

  • Covers fundamentals of both financial and managerial accounting.