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Welcome to The TMTC & LAMCON GeMS training program Finance Management

Welcome to The TMTC & LAMCON GeMS training program Finance Management. a LAMCON training program. The TMTC & LAMCON training program. LAMCON counts where money matters. Rule 2. Reading A Balance Sheet. a LAMCON training program. The TMTC & LAMCON training program.

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Welcome to The TMTC & LAMCON GeMS training program Finance Management

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  1. Welcome to The TMTC &LAMCON GeMS training program Finance Management

  2. a LAMCONtraining program The TMTC & LAMCONtraining program LAMCONcounts where money matters Rule 2 Reading A Balance Sheet

  3. a LAMCONtraining program The TMTC & LAMCONtraining program BALANCE SHEET – A Share Capital 150 Fixed Assets 750 Reserves & Surplus 100 Current Assets 250 Long Term Loans 700 Current Lia 50 1000 1000 BALANCE SHEET – B Share Capital 450 Fixed Assets 750 Reserves & Surplus 300 Current Assets 250 Long Term Loans 200 Current Lia 50 1000 1000 LAMCONcounts where money matters

  4. a LAMCONtraining program The TMTC & LAMCONtraining program LAMCONcounts where money matters B/S Share Capital Fixed Assets Reserves & Surplus Long Term Loans Current Assets Current Liabilities

  5. a LAMCONtraining program The TMTC & LAMCONtraining program LTS LAMCONcounts where money matters Reading a Balance Sheet – Rule 2 BALANCE SHEET Share Capital Fixed Assets Reserves Long Term Loans Current Liabilities Current Assets LTU STU STS

  6. a LAMCONtraining program The TMTC & LAMCONtraining program LAMCONcounts where money matters Reading a Balance Sheet – Rule 2 Working Capital Cycle 1 mth 15 days 1 mth 3 mths 15 days 1 mth 1 mth 3 mths One cycle takes : 8 mths 3 mths No. of cycles in a yr : 1 . 5 4

  7. a LAMCONtraining program The TMTC & LAMCONtraining program LTS LAMCONcounts where money matters Reading a Balance Sheet – Rule 2 BALANCE SHEET Share Capital Fixed Assets Reserves Long Term Loans Current Liabilities Current Assets LTU STU STS

  8. a LAMCONtraining program The TMTC & LAMCONtraining program B/S A LTS 80 LTU 80 STS 20 STU 20 100 100 LTS 4752 LTU 5154 STS 2598 STU 2196 7350 7350 B/S B LTS 90 LTU 80 STS 10 STU 20 100 100 LTS 11670 LTU 11670 STS 3750 STU 3750 15420 15420 B/S C LTS 70 LTU 80 STS 30 STU 20 100 100 LTS 6450 LTU 5460 STS 3300 STU 4290 9750 9750 LAMCONcounts where money matters Reading a Balance Sheet – Rule 2 C A B

  9. a LAMCONtraining program The TMTC & LAMCONtraining program B/S A LTS 80 LTU 80 STS 20 STU 20 100 100 B/S B LTS 90 LTU 80 STS 10 STU 20 100 100 B/S C LTS 70 LTU 80 STS 30 STU 20 100 100 LAMCONcounts where money matters Reading a Balance Sheet – Rule 2 Ahas used LTF for LTP & STF for STP Bhas used a part of LTF for STP Chas used a part of STF for LTP

  10. a LAMCONtraining program The TMTC & LAMCONtraining program LAMCONcounts where money matters Reading a Balance Sheet – Rule 2 Working Capital Cycle

  11. a LAMCONtraining program The TMTC & LAMCONtraining program B/S A STS 20 STU 20 Cash Cash Drs Drs Inv Inv B/S B STS 10 STU 20 } Liquid CA B/S C STS 30 STU 20 LAMCONcounts where money matters Reading a Balance Sheet – Rule 2 Current Ratio (CA : CL) should be about 2 : 1 Non-Liquid CA Liquid Ratio (LCA : CL) should be minimum 1:1

  12. a LAMCONtraining program The TMTC & LAMCONtraining program B/S A STS 20 STU 20 Cash Cash Drs Drs Inv Inv B/S B STS 10 STU 20 B/S C STS 30 STU 20 LAMCONcounts where money matters Reading a Balance Sheet – Rule 2 Current Ratio (CA : CL) should be about 2 : 1 } 8 10 12 12 10 8 Liquid Ratio (LCA : CL) should be minimum 1:1

  13. a LAMCONtraining program The TMTC & LAMCONtraining program LAMCONcounts where money matters Reading a Balance Sheet – Rule 2 CR LR A 2.2 : 1 0.9 : 1 B 1.1 : 1 1.5 : 1 CR 2 : 1 Norm LR 1 : 1 Norm

  14. a LAMCONtraining program The TMTC & LAMCONtraining program B/S A LTS 80 LTU 80 STS 20 STU 20 100 100 B/S B LTS 90 LTU 80 STS 10 STU 20 100 100 B/S C LTS 70 LTU 80 STS 30 STU 20 100 100 LAMCONcounts where money matters Reading a Balance Sheet – Rule 2 Ahas used LTF for LTP & STF for STP Bhas used a part of LTF for STP Chas used a part of STF for LTP

  15. a LAMCONtraining program The TMTC & LAMCONtraining program LAMCONcounts where money matters Reading a Balance Sheet – Rule 2 A healthy company must : 1. use LTFs for LTPs 2. use STFs for STPs may 3. use LTFs for STPs but 4. should never use STFs for LTPs

  16. a LAMCONtraining program The TMTC & LAMCONtraining program LAMCONcounts where money matters Reading a Balance Sheet – Rule 2 A healthy company must : maintain a current ratio (i.e. CA : CL) of about 2 : 1 maintain a liquid ratio (i.e. LA : CL) of a minimum of 1 : 1

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