Objective 4.01 Handouts

Name: ______________________
Class: _______
Date: _______
Business Financial Planning Organizer

Financial planning includes an organization evaluating it current financial position,
setting financial goals, and implementing activities and obtaining resources to reach
established financial goals.
Part A
Directions: In the provided table, provide information about when businesses conduct
financial planning.
Phases
Financial Planning
Start-up
Operation
Expansion
Basic financial equation

_____________________ - ____________________ = ________________________
6200/6600 Principles of Business and Finance
Summer 2010
Page 237
Business Financial Planning Organizer: Part A Continued
Type
Start-up
Types of Business Budgets

When it is used
Operating
Cash
List the four steps of completing a budget:

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Summer 2010
Page 238
Business Financial Planning Organizer: Part B

What is the purpose of financial records?
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List the financial records used by businesses:
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What are assets? _______________________________________________________
What are liabilities? ______________________________________________________
What is owners equity? __________________________________________________
What are financial statements?
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What is the difference between a balance sheet and an income statement?
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Summer 2010
Page 239
Name: ______________________
Class: _______
Date: _______
Profit or Loss Activity

Directions: Determine whether the provided businesses will net a profit or loss.
Business 1
Taylors Grocery Store revenue for this year is $91,750. The store manager noticed an
increase of $3,000 in the stores expenses. She has determined that the total expenses
equal to $81,000? Will this business net a profit or loss? _______
How much of a profit or loss? ________
Business 2
Harrys Shoe Store has noticed a significant increase of revenue of $123,000. The
manager has also determined that the total expenses equal to $128,000. Will this
business net a profit or loss? _______ How much of a profit or loss? ________
Business 3
Malindas Auto Dealership of Imported Cars made $895,000 in revenue. The manager
has determined that the total expenses equal to $598,000. Will this business net a profit
or loss? _______ How much of a profit or loss? ________
Name: ______________________
Class: _______
Date: _______
Profit or Loss Activity

Directions: Determine whether the provided businesses will net a profit or loss.
Business 1
Taylors Grocery Store revenue for this year is $91,750. The store manager noticed an
increase of $3,000 in the stores expenses. She has determined that the total expenses
equal to $81,000? Will this business net a profit or loss? _______
How much of a profit or loss? ________
Business 2
Harrys Shoe Store has noticed a significant increase of revenue of $123,000. The
manager has also determined that the total expenses equal to $128,000. Will this
business net a profit or loss? _______ How much of a profit or loss? ________
Business 3
Malindas Auto Dealership of Imported Cars made $895,000 in revenue. The manager
has determined that the total expenses equal to $598,000. Will this business net a profit
or loss? _______ How much of a profit or loss? ________
Summer 2010
Page 240
Grocery Store, Inc. Operation Budget Sample
Business Profile: Grocery Store, Inc. provides a variety of grocery and
household goods. The store usually has sales income and various
expenses. See provided operating budget for sample income and
expenses.
Grocery Store, Inc.
January 1, xxxx to December 31, xxxx
Category
Actual
Budget
Difference
Income
Net Sales
558,400
400,000
158,400
Total Income
558,400
400,000
158,400
Expenses
Salaries
Utilities
Rent
Insurance
Advertising
Telephone
Dues & Subscriptions
Interest Paid
Repairs & Maintenance
Taxes
Total Expenses
189,250
4,100
13,000
13,900
3,650
1,700
900
1,140
11,250
990
239,880
145,000
3,900
13,000
13,900
3,000
1,000
1,000
1,100
11,000
900
193,800
44,250
200
0
0
650
700
(100)
40
250
90
46,080
$318,520
$206,200
$112,320
Net Income
Summer 2010
Page 242
Jerrys Painting Company Cash Budget Sample

Business Profile: Jerry's Painting Company paints home and business interiors and
exteriors. The company usually has interior and exterior sales cash receipts. Also, the
company usually has various expenses. See provided cash budget for sample cash receipts
and expenses.
Jerry's Painting Company

Cash Budget
For First Quarter, 20____
DESCRIPTION
Jan
Feb
Mar
Total
Receipts:
Interior Sales
Exterior Sales
Total Receipts
$7,200.00
$7,500.00
$4,400.00
$19,100.00
$2,400.00
$2,700.00
$6,800.00
$11,900.00
$9,600.00
$10,200.00
$11,200.00
$31,000.00
$5,800.00
$5,800.00
$6,500.00
$18,100.00
$1,200.00
$1,200.00
$1,200.00
$3,600.00
$210.00
$210.00
$150.00
$570.00
$300.00
$300.00
$500.00
$1,100.00
$90.00
$90.00
$100.00
$280.00
$200.00
$200.00
$550.00
$950.00
$375.00
$375.00
$375.00
$1,125.00
$1,160.00
$1,160.00
$1,300.00
$3,620.00
$750.00
$750.00
Payments:
Wages
Rent
Utilities
Supplies
Office Expenses
Repairs
Insurance
Taxes
Equipment
Total Payments
Balance
________
_________
$9,335.00
$9,335.00
$11,425.00
$30,095.00
$265.00
$865.00
($225.00)
$905.00
Summer 2010
Page 243
Name: ______________________
Class: _______
Date: _______
Things I Own and Things I Owe Activity

Directions: First, take turns within your group and list personal assets and liabilities, and
then the value of each item. Second, review the list and divide it into current and longterm assets and liabilities. Third, total the value of the two columns and determine which
one is greater.
Assets
Value
Total
Liabilities
Value
Total
Summer 2010
Page 244
Name: ______________________
Class: _______
Date: _______
Financial Performance Organizer

Directions: Provide information about the main types of financial ratios.
Financial performance ratios are comparisons using a companys financial data to
determine how well a business is performing.
Types of
financial
ratios
Current
How the ratio

is calculated
Why is the ratio used
current assets
current liabilities
Debt to
Equity
total liabilities
owners equity
Return on
Equity
net profit
owners equity
Net
Income
total sales
net income
Summer 2010
Page 245
Class: _______
Date: _______
Wells Fargo &

Co. (WFC)
Debt to
Equity
Ratio:
Current
Ratio:
Industry:
Bank of America
(BAC)
Summer 2010
JPMorgan Chase &

Co.
(JPM)
Page 246
Wal-Mart
(WMT)
Microsoft (MSFT)
Directions: Use the Internet to research and calculate financial statement ratios for the companies listed. Then, use your
results to answer the provided questions.
Real-World Ratios Activity
Name: ______________________
Summer 2010
Page 247
3. Overall, which company appears to be performing the best? If it is different than #1, explain why.
2. Of the three financial institutions, which appears to be performing the best? Explain why.
1. For each of the four ratios, circle the company that has the best ratio.
Net
Income
Ratio:
Return on
Equity
Ratio:

Objective 4.01 Handouts

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Objective 4.01 Handouts

Încărcat de

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Formate disponibile

Name: ______________________

Business Financial Planning Organizer

Basic financial equation

6200/6600 Principles of Business and Finance

Business Financial Planning Organizer: Part A Continued

Types of Business Budgets

List the four steps of completing a budget:

Business Financial Planning Organizer: Part B

6200/6600 Principles of Business and Finance

Profit or Loss Activity

Profit or Loss Activity

6200/6600 Principles of Business and Finance

Grocery Store, Inc. Operation Budget Sample

Business Profile: Grocery Store, Inc. provides a variety of grocery and

6200/6600 Principles of Business and Finance

Jerrys Painting Company Cash Budget Sample

Jerry's Painting Company

6200/6600 Principles of Business and Finance

Things I Own and Things I Owe Activity

Financial Performance Organizer

How the ratio

Why is the ratio used

6200/6600 Principles of Business and Finance

Wells Fargo &

6200/6600 Principles of Business and Finance

JPMorgan Chase &

Real-World Ratios Activity

6200/6600 Principles of Business and Finance

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