Post on 12-May-2015
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Business Acumen for Learning Professionals: An Innovative Approach
Peter Frampton • 24 May 2011
4:00 PM - 5:30 PM
ASTD 2011 International Conference & Exposition
May 23-25, 2011Orlando, Florida
May 23-25, 2011Orlando, Florida
2
Understanding the Numbers.
Foundation of Business Acumen is…
p9
3
Look beyond the stripes
p11
Assets Liabilities
Equity
Expenses Income
Profit Story
Bala
nce
Shee
tIn
com
e S
tate
men
tUSE OF FUNDS SOURCE OF FUNDS
Color Accounting Framework™- Definitions
© ACA
Valuable
Obligation/Outsiders’ Claim
Owners’ Contribution/Claim
Generation of ValueLoss of Value
Assets Outsiders’ Claim
Stakeholders’ Claim
Expenses Income
Stat
emen
t of
Posi
tion
Stat
emen
t of
Activ
ity
Surplus
USE OF FUNDS SOURCE OF FUNDS
Accounting Layout & Logic
1
2
3
© ACA
+
Borrow/Lenders
Stakeholders
=
Property 50 000 Bank loan 30 000
Endowment 20 000
Customers/Donors
Consulting 600
Cash 600
Taxi used 100
Cash 100
500
NFP CAF
500
Organizing principles
7
Perspective
p46
To communicate effectively you must stay cognizant of the duality of accounting.
Balancing the books
Sources of fundsUses of funds
$99 $99
Balancing the books
Sources of fundsUses of funds
$99 $99
Balancing the booksSources of fundsUses of funds
$99 $99
Balancing the booksSources of fundsUses of funds
$99$99
13
The ONLY 4 transactions
that exist
p24
Debiting Crediting Debiting Crediting
Debit accounts Credit accounts
Assets
Expenses
Liabilities
Equity
Income
Opposite =
Same =
Business receives payment at the same time as the income was earned
Dec Jan Feb Mar
Money received
Assets Liabilities
Equity
Profit
Expenses Income
Work performed
Business does the work first and then receives payment later
Assets Liabilities
Equity
Profit
Expenses Income
Dec Jan Feb Mar
Work performed Money received
Business receives payment before the income was earned
Dec Jan Feb Mar
Assets Liabilities
Equity
Profit
Expenses IncomeWork performedMoney received
Earning income
1
2
3
CashA/R
X
X
(a) (b)
(a) (b)
Incurring an
expense1
2
3
Business pays at the same time as incurring the expense
Dec Jan Feb Mar
Cash paid
Assets Liabilities
Equity
Profit
Expenses Income
Expense incurred
Business pays before incurring the expense
Dec Jan Feb Mar
Assets Liabilities
Equity
Profit
Expenses IncomeMoney paid Expense incurred
Business incurs the expense first and then pays for it later
Assets Liabilities
Equity
Profit
Expenses Income
Dec Jan Feb Mar
Money paidExpense incurred
Cash Prepaid
Expense
X
X
(a) (b)
(a) (b)
Gross Profit MarginSOURCE OF FUNDSUSE OF FUNDS
Assets Liabilities
Equity
Expenses Income
© CAI 2008
Direct Expenses Sales
Indirect Expenses
Gross Profit
%
Assets Liabilities
Equity
Expenses Income
Profit Story
Bala
nce
Shee
tIn
com
e S
tate
men
t
Profit
USE OF FUNDS SOURCE OF FUNDS
Color Accounting Framework™
1
2
3
© ACA
+
Borrow/Lenders
Investment/Owners
=
Property +400 000 Bank loan +300 000
Share capital +200 000
Net Income/Customers
Fees earned +6 000
Cash +6 000
Taxi used +100
Cash -1005 900
Labor Consulting, Inc.
Cash +100 000
19
EBITDA& EBIT
p53
20
Cash Flow Statement
Operating activities
Investing activities
Financing activities
p54
21
Global Retail – headline review table
p38
22
Global Retail – headline review table
p38
23
Global Retail – headline review table
p38
24
Global Retail – headline review table
p38
Equity
USE OF FUNDS SOURCE OF FUNDS
A value story…The value cycle!
Liabilities
Assets
ExpensesIncome
26
A whimsical farming analogy
p49