Understanding Profitability

Organizations need to be profitable to survive and grow. Profit is achieved when more money is made than is spent. Profit is a function of inputs -- from sales of products, shipping chargebacks, or service-based charges, less outputs -- expenses such as product costs, salaries, overhead, equipment, etc. Anything that can be done to increase revenues and decrease expenses will result in increased profits.

Course Content

The purpose of this module is to recognize and understand how these components of financial management work:

• Balance Sheets
• Assets and liabilities
• Cash flow
• Profit and Loss (P&L) Statement
• Profitability Ratios
• Ideas for Increasing Revenues
• Ideas for Decreasing Costs

Audience:

All employees could benefit from this module, particularly those that do not have financial or accounting backgrounds and are in charge of financial decisions for the organization. The major objective is to convey financial reporting processes, calculate simple financial ratios, and build knowledge of financial terms and processes.

Timing:

This module can be presented with a minimum of two hours.

Exercises:

• Self Assessment: Knowledge of Finance
• Identify balance sheet items
• Cash basis or accrual basis?
• Identifying items on a Profit and Loss Statement
• Reference to organization's financial planning and reporting system
• Summary and action items
  

Note: Other courses are available or can be designed based on client needs. Please contact Claremont for more information