Management Process
Operations
Finance: Sources/Expenditure of funds
Marketing: Plan, price, promote + distribute products
Human Resources (HR): Relation between employees and employers.
Cash Flow Statement
Shows the flow of cash into and out of a business during a period of time. It reports the amount of cash coming in and the amount of cash going out during a period.
Cash inflows - Money coming into the business. E.g. Selling goods and services
Cash outflows - Money going out of the business. E.g. Paying Dividends and tax
Net Cash Flows - Difference between cash inflows and cash outflows
The Income Statement
A fundamental tool used by a business that shows the income and expenditure of a business over a period of time, and can be used to calculate profit.
Also known as profit and loss statement OR revenue statement.
Compares the amount of sales with the actual cost of the goods sold
Analyse it’s costs
Identify all expenses in the business
The Balance Sheet
Assets = Liabilities + Owners equity
Gives information of a businesses assets, liabilities and owner’s equity at a given point of time.
Called a balance sheet as it balances the firm’s assets against liabilities and owner’s equity.
Assets are items of value owned by a business.
Current assets (Can be turned into cash in a year) - cash, inventory
Non Current assets (assets that takes longer than a year to be turned into cash)- house, car
Liabilities are what a business owes and can be divided into two groups.
Owners Equity is the money contributed by the owners of the business.
OE = capital + net profit - drawing
Drawing is money taken from a business by an owner for their own personal use.