The Ultimate Finance Book

Master Profit Statements, Understand Bookkeeping & Accounting, Prepare Budgets & Forecasts

Roger Mason, Roger Mason Ltd

• Publisher: Teach Yourself
• Year: 2018
• Print ISBN: 9781473683815
• eBook ISBN: 9781473683822
• Topic: Business
• Subtopic: Accounting
• Index: Business

This is your complete course in business finance. From balance sheets and profit statements to cashflow, budgets and forecasts, THE ULTIMATE FINANCE BOOK is a dynamic collection of tools, techniques, and strategies for success. Short, punchy chapters mean you can read up quickly and start applying what you've learned immediately.* Part 1: Your Finance for Non-Financial Managers Masterclass
* Part 2: Your Bookkeeping and Accounting Masterclass
* Part 3: Your Understanding and Interpreting Accounts Masterclass
* Part 4: Your Successful Budgeting and Forecasting MasterclassDiscover the main themes, key ideas and tools you need, and bring it all together with practical exercises.ABOUT THE SERIES
ULTIMATE books are for managers, leaders, and business executives who want to succeed at work. From marketing and sales to management and finance, each title gives comprehensive coverage of the essential business skills you need to get ahead in your career. Written in straightforward English, each book is designed to help you quickly master the subject, with fun quizzes embedded so that you can check how you're doing.

PART 1

Your Finance for Non-Financial Managers Masterclass

Introduction

Depending on how far you are willing to stretch the definition, there are well over two million non-financial managers in the UK, with considerably more in other countries. Many of them would like to know more about finance, and the knowledge would help them do their jobs and progress in their careers.

A basic understanding of finance is very relevant to our personal lives. It is also important to virtually all managers and supervisors, both junior and senior. This has always been so and its significance has considerably increased in recent years.

Some managers have been financially trained but many more wish to increase their level of understanding. Doing so will enable them to become more effective and improve their scope for development and promotion.

Chapter 1

An introduction to the profit statement

Nearly all private sector businesses are conducted in the hope of making a profit, though of course not all succeed in doing so. Profits and losses, which perhaps should be called surpluses and deficits, are also important to large parts of the public sector and to such bodies as charities and membership organizations. There is of course much more to it, but many managers would say that the point of bookkeeping and accounting is to find out the amount of the profit or loss.

The Profit Statement is important and an introduction to it is a very good way of starting this Part. The more advanced published accounts will be studied in Chapter 3, but first we will study an internal document produced for the managers.

We will work through:

• a simple example

• a trading company

• a manufacturing company

• some further concepts explained

• preparing a full example.

A simple example

The heading ‘Profit Statement’ may be optimistic because it implies that a profit has been made. In some cases it would be more appropriate to call it a Loss Statement.

Profit Statement is the name often given to an internal document setting out the trading activity and results. It is sometimes called the Profit and Loss Account or Income Statement and these are the titles used in the more formal published accounts.

Understanding the principles of the Profit Statement is the first step towards using it to improve future performance. This is covered later in this Part but as a first step we will consider a simple example.

Julia Brown writes a book. Her agreement does not provide for royalties, just a fee of £5,000 payable on delivery of the manuscript to the publisher. The costs of the enterprise are small and she...

Table of contents

• Cover 
• Title
• About the Author
• Contents 
• Part 1: Your Finance for Non-Financial Managers Masterclass
• Part 2: Your Bookkeeping and Accounting Masterclass
• Part 3: Your Understanding and Interpreting Accounts Masterclass
• Part 4: Your Successful Budgeting and Forecasting Masterclass
• Surviving in tough times
• Answers
• Glossary
• Copyright