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Financial Fundamentals Learning Pathway

The information and media below are for the participants of the Financial Foundation Learning Pathway group only. The content will be available to everyone on-demand in the near future; please do not share the link and password.

Session 1: Pre-Requisite for Working Group 1

Please watch the webinar and complete the enclosed homework assignment prior to participating in Working Group 1.

We all know that the Annual Profit and Loss (P & L) Statement is useful to report taxable income for the government. But does it give us enough information to manage a business effectively? Adjusting financial reporting processes can optimize a business.

  • In this session, we explore:
    adding detail to a profit and loss statement for better business management overall
  • Increasing frequency of financial reporting for access to relevant, up-to-date information throughout the year

 

Session 2: Pre-Requisite for Working Group 2

Please watch the webinar and complete the enclosed homework assignment prior to participating in Working Group 2.

A detailed Chart of Accounts (COA) allows for tracking where money comes in and goes out within a given reporting period. Cost of Goods Sold (COGS) and Gross Margin (GM) play a key role in financial reporting.

In this session, we explore:

  • What is COGS and why is it important to include in a P & L statement?
  • Why is Gross Margin one of the most important numbers to have on a P & L statement?
  • How and why do we lay out revenue centres to correlate with COGS?
  • How do we lay out Point of Sale (POS) for the Chart of Accounts (COA)?

 

Session 3: Pre-Requisite for Working Group 3

Please watch the webinar and complete the enclosed homework assignment prior to participating in Working Group 3.

Often when we look at a Profit and Loss Statement, we focus on the revenue listed at the top and the profit listed at the bottom. But what about the data in between? To make data-driven decisions for a business, we need to pay close attention to Gross Margin and Gross Margin per revenue channel.

In this session, we explore:

  • Why calculating Gross Margin per revenue channel matters
  • Sales channel analysis (calculating Gross Margin by revenue channel)
  • Decisions that can (and should) be made with this data

 

Session 4: Pre-Requisite for Working Group 4

Please watch the webinar and complete the enclosed homework assignment prior to participating in Working Group 4.

The TTM is an invaluable accounting tool that allows us to look back and spot trends over time. But to scale a business up or down through any market condition and survive, we need to look forward and plan accordingly. A Pro Forma, also generated monthly, allows us to forecast how the business is likely to perform in the future by projecting the potential financial impact of hypothetical strategies. A Pro Forma empowers us to justify the decisions we make in our business.

In this session, we explore:

  • Using a Pro Forma to numerically test potential strategies in the service industry vs in the manufacturing industry
  • How to calculate break-even
  • The role of break-even analysis in decision-making

Session 5: Pre-Requisite for Working Group 5

Please watch the webinar and complete the enclosed homework assignment prior to participating in Working Group 5.

To create a reliable Pro Forma, the TTM needs to be solid first so we can see trends over time. To do this, we must understand that the profit margin is the result of the intersection between factors we can control: revenue, gross margin, and expenses.

In this session, we explore:

  • How and why to keep the Gross Margin and monthly expenses consistent
  • How the break-even analysis formula can help a business reach profitability
  • Three ways to affect profitability
  • Monthly financial routines