welcome to the tmtc & lamcon gems training program finance management
TRANSCRIPT
Welcome
to
The TMTC & LAMCON
GeMS training program
Finance Management
a LAMCON training program
LAMCON counts where money matters
Rule 2
Reading A Balance Sheet
The TMTC & LAMCON training program
a LAMCON training program
LAMCON counts where money matters
BALANCE SHEET – A
Share Capital 150 Fixed Assets 750Reserves & Surplus 100
Current Assets 250Long Term Loans 700 Current Lia 50
1000 1000 BALANCE SHEET – B
Share Capital 450 Fixed Assets 750Reserves & Surplus 300
Current Assets 250Long Term Loans 200 Current Lia 50
1000 1000
The TMTC & LAMCON training program
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
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
a LAMCON training program
LAMCON counts where money matters
Reading a Balance Sheet – Rule 2
Working Capital Cycle
3 mths
1 mth
1 mth
3 mths
1 mth 15 days
15 days1 mth
One cycle takes :No. of cycles in a yr :
8 mths 1 . 5
3 mths 4
The TMTC & LAMCON training program
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
a LAMCON training program
LAMCON counts where money matters
Reading a Balance Sheet – Rule 2
B/S A
LTS 80 LTU 80STS 20 STU 20
100 100
B/S B
LTS 90 LTU 80STS 10 STU 20
100 100
B/S C
LTS 70 LTU 80STS 30 STU 20
100 100
LTS 4752 LTU 5154STS 2598 STU 2196
7350 7350
LTS 11670 LTU 11670STS 3750 STU 3750
15420 15420
LTS 6450 LTU 5460STS 3300 STU 4290
9750 9750
C
A
B
The TMTC & LAMCON training program
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 80STS 20 STU 20
100 100
B/S B
LTS 90 LTU 80STS 10 STU 20
100 100
B/S C
LTS 70 LTU 80STS 30 STU 20
100 100
The TMTC & LAMCON training program
a LAMCON training program
LAMCON counts where money matters
Reading a Balance Sheet – Rule 2
Working Capital Cycle
The TMTC & LAMCON training program
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
a LAMCON training program
LAMCON counts where money matters
Reading a Balance Sheet – Rule 2
} 8
12
10
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
a LAMCON training program
LAMCON counts where money matters
Reading a Balance Sheet – Rule 2
CR LR
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
a LAMCON training program
LAMCON counts where money matters
Reading a Balance Sheet – Rule 2
B/S A
LTS 80 LTU 80STS 20 STU 20
100 100
B/S B
LTS 90 LTU 80STS 10 STU 20
100 100
B/S C
LTS 70 LTU 80STS 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
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
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