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Day 10 …..2/7

What is meant by ‘source document’? Example? Are they originally posted to a journal or ledger?. Day 10 …..2/7. DAY 11 ...2/7. Name 3 of the 5 requirements for any accounting system. Easy to use Process data quickly Expandable Affordable to operate Protection . Accounting vs. Finance.

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Day 10 …..2/7

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  1. What is meant by ‘source document’? Example? Are they originally posted to a journal or ledger? Day 10…..2/7

  2. DAY 11...2/7 Name 3 of the 5 requirements for any accounting system. Easy to use Process data quickly Expandable Affordable to operate Protection

  3. Accounting vs. Finance Accounting -process of keeping financial records Finance the function that involves all money and money management matters; tools & analyses

  4. Financial Managers… use these tools & analyses to make sound financial decisions for the company.

  5. Main Financial Activities (Fin. Mgr.) Administration of Assets (investment decisions) What types of assets and what mix? What is best for the company overall value. Acquisition of funds / Financing Money for new investment Which method(s) is most beneficial Planning Forecasting Budgeting

  6. Accounting – records / generates Finance – plan / make decisions

  7. “Purpose” of Finance within Business Set goals (product, merger, facility) Plan & Control Spending (within budget, profit) Ensure financing (funds, debts, taxes, accounts payable) Collect on bills (accounts receivable) Smart investing

  8. Money is needed for: materials, marketing, advertising, employees, growth, purchasing, research,…. Finance Dept Information Systems

  9. Capital - $$$ Capital Investment Decisions Which projects How to finance Dividends Working Capital Management (focuses on A & L) And manages: Accounts pay/rec. Inventory Cash Short-term Long-term

  10. Capital Investment Decisions • Capital budgeting Potential value / How profitable • Capital structure Debt & Equity • Dividends • Debt & Equity

  11. Working Capital Management Cash Conversion Cycle ratio that refers to the # of days between paying for raw materials and receiving cash for selling product. goal = as short as possible Return on Capital (return on investment / roic) 10M invested…..1M profit = 10% asset conversions, working capital, net operating, cash cycle

  12. STOP

  13. Day 12……..2/11 What two areas are the focus of a company’s working capital management?

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