Financial Planning and Analysis Overview
This content covers various aspects of financial planning and analysis, including topics such as cash flow management, profit and loss statements, asset management, and debt reconciliation. It provides insights into key concepts and practical applications in the field of finance.
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Presentation Transcript
Forbairt Foghlaim Ca www.pdst.ie F s
Planning 6thYear After Final Accounts After Suspense Before Ratios www.pdst.ie p d s t 2 0 1 4
Pre-teaching Anticipation Sheet Review Double entry Profit v Cash Debt Items not involving movement of cash Sources of cash inflows and outflows www.pdst.ie p d s t 2 0 1 4
Questions 100 marks 60 marks Difference Abridged Profit and Loss required www.pdst.ie p d s t 2 0 1 4
100 Mark Timing 25% marks = 25% time 100 marks = 45 minutes 60 marks = 27 minutes In 2015 Abridged P&L 18 marks Reconciliation of operating profit 20 marks Cash flow statement 46 marks Reconciliation of net debt 4 marks (40 mins) Theory (5 mins) 12 marks www.pdst.ie p d s t 2 0 1 4
OVERVIEW OF 2015 Read figures from right to left 2014 2013 Asset cash 34,000 60,000 Decrease (26,000) Liability Bank 18,000 31,000 Increase 13,000 Overall decrease (13,000) Last figure in Cash flow statement must be (13,000) www.pdst.ie p d s t 2 0 1 4
Net Debt 1/1/2014 130,000 + 31,000 - 60,000=101,000 31/12/2104 180,000 + 18,000 - 34,000 - 58,000 (Government Securities) = 108,000 www.pdst.ie p d s t 2 0 1 4
Adjustments 1. 60,000 shares @ 1.25 each = share capital + 60,000 250,000 + 60,000 = 310,000 (Cash flow statement) share premium + 15,000 0 + 15,000 = 15,000 (Cash flow statement) www.pdst.ie p d s t 2 0 1 4
CASH/BANK A/C DR/Rec CR/Paid Disposal of Asset 30,000 Purchase of Asset Taxation Paid Dividend Paid www.pdst.ie p d s t 2 0 1 4
2. Fixed Asset Fixed Asset Cost 50,000 Depreciation 25,000 Sold for 30,000 Dep 1/1/14 80,000 - Disposed (25,000) + P & L charged 145,000 (Reconciliation of operating profit figure) Dep 31/12/14 200,000 www.pdst.ie p d s t 2 0 1 4
Fixed Asset Cost 1/1/14 470,000 - Disposal 50,000 Purchase 220,000 (Cash flow statement) Cost 31/12/14 640,000 www.pdst.ie p d s t 2 0 1 4
Disposal a/c Cost 50,000 - Dep (25,000) NBV 25,000 Cash 30,000 (Cash flow statement) Profit 5,000 (Reconciliation of operating profit ) www.pdst.ie p d s t 2 0 1 4
Fixed Assets Balance 1/1/14 470,000 Disposal 50,000 Balance 31/12/14 640,000 Purchase of Asset 220,000 690,000 690,000 Depreciation a/c Disposal 25,000 Balance1/1/14 80,000 P & L 145,000 Balance 31/12/14 200,000 225,000 225,000 www.pdst.ie Disposal A/C Fixed Asset 50,000 Depreciation 25,000 Bank 30,000 Profit 5,000 55,000 55,000 p d s t 2 0 1 4
3. Debentures 50,000 Debentures issued on 1/1/14 1/1/14 Bal 130,000 Issued 50,000 (Cash flow statement/ movement in net debt) 31/12/14 Bal 180,000 10% Debenture Interest 18,000 www.pdst.ie p d s t 2 0 1 4
4. Dividends Dividends paid during year amounting to 55,000. Dividends (B/S) - - Dividends Paid 55,000 (abridged P & L/Cash flow statement) www.pdst.ie p d s t 2 0 1 4
5. Taxation Taxation charge on profits for 2014 amounted to 65,000. 2014 2013 Taxation (B/S) 55,000 47,000 1/1/14 Due 47,000 + P & L 65,000 (abridged P & L) 112,000 31/12/14 Due 55,000 Paid 57,000 (Cash flow statement) www.pdst.ie p d s t 2 0 1 4
Taxation A/C Balance due 1/1/14 47,000 Bank 57,000 P & L 65,000 Balance due 31/12/14 55,000 112,000 112,000 www.pdst.ie p d s t 2 0 1 4
6. Investment 1/1/14 Bal 200,000 Sold (100,000) (Cash flow statement) 31/12/14 Bal 100,000 www.pdst.ie p d s t 2 0 1 4
FORMAT!! www.pdst.ie p d s t 2 0 1 4
Abridged Profit and Loss account for year ending 31/12/2014 Operating Profit Less Interest Profit before Tax Taxation Profit after Tax Dividends Retained Profit Profit and Loss 1/1/2014 Profit and Loss 31/12/2014 www.pdst.ie p d s t 2 0 1 4
Abridged Profit and Loss account for year ending 31/12/2014 Operating profit Less interest Profit before tax Taxation Profit after tax Dividends Retained profit Profit and loss balance 1/1/2014 356,500 Profit and loss balance 31/12/2014 361,500 ? www.pdst.ie p d s t 2 0 1 4
Abridged Profit and Loss account for year ending 31/12/2014 Operating profit Less interest (18,000) Profit before tax 125,000 Taxation (65,000) Profit after tax 60,000 Dividends (55,000) Retained profit 5,000 Profit and loss balance 1/1/2014 356,500 Profit and loss balance 31/12/2014 361,500 145,000 www.pdst.ie p d s t 2 0 1 4
Reconciliation of operating profit to net cash flow from operating activities Operating profit Depreciation charge for year Profit on sale of fixed assets Increase in provision (bad debts) Increase/decrease Stock Debtors Creditors =Net cash inflow/outflow from operating activities www.pdst.ie p d s t 2 0 1 4
O Old R Roy s T Trafford C Can E Earn M Much F Funds www.pdst.ie p d s t 2 0 1 4
R Return on Investment and Servicing of Finance T Taxation C Capital Expenditure and Financial Investment E Equity Dividends paid (net cash outflow before liquid resources and financing) M Management of Liquid Resources F Financing (Decrease/Increase in Cash) www.pdst.ie p d s t 2 0 1 4
Reconciliation of net cash to movement in net debt Decrease/Increase in cash Cash used to purchase liquid resources Cash received from issue of debentures Change in net debt Net debt at 1/1/14 (given) Net debt at 31/12/14 (given) www.pdst.ie p d s t 2 0 1 4
TIPS Students need to have a clear plan for exam Must do at least 4 questions if doing question 1, otherwise must do 5 questions Not all questions carry equal marks Up to 20% of any question can be theory Practice, Practice, Practice Prepare exam style questions using stop watch in class. www.pdst.ie p d s t 2 0 1 4
P Be Prepared E Be Enthusiastic C Be Confident www.pdst.ie p d s t 2 0 1 4
Fs FoghlaimForbairt www.pdst.ie The PDST is funded by the Teacher Education Section (TES) of the Department of Education and Skills (DES) and is managed by Dublin West Education Centre
