Transcript UMMC – Supply Chain Mgmt.

UMMC – Supply Chain Mgmt.
Course 2
Business Financials, Financial
Statements, and Accounting Principles
Course List
•
•
•
•
•
•
•
•
•
Intro to SC Concepts
Financials
Logistics and Distribution
Purchasing
Inventory Management 1
Inventory Management 2
SC Technology
Production Management
Quality Control and
Improvement
What will we cover today?
• Overview of financial and accounting
concepts
• Financial Statements
•
•
•
•
Income Statement
Balance Sheet
Cash Flow Statement
General Ledger
• SC impact on financials
• Terms
Overview and Terms
• Revenue
• Gross - “Top Line”
• Net - “Bottom Line”
• Expenses
• Assets - Current or Fixed
• Liabilities - Current or Long-Term
• Margin
• Accrual v. Cash Method of accounting
• Revenues and Expenses are recorded at the time of transaction regardless
of cash flow
• Net Income/Loss
• The difference between revenues and expenses often referred to as the
“Bottom Line”
Why is this important?
• Primary Financial Objective = Create Return for
Stockholders or Bondholders (Nonprofit)
Understanding Non-Profit
• Even though Fairview is non-profit, Net
Income is still crucial because…
• Reinvestment
• Capital Purchases
• Acquisitions
• Bond Rating
Income Statement
•
•
•
•
One of the 3 major financial statements
Displays revenues and expenses
Clearly states net profit or loss
Also called “statement of revenue and
expense”
Sample Income Statement
Sales Revenue
Cost of Goods Sold
$1,000,000
Direct Material
($150,000)
Direct Labor
($100,000)
Overhead
($150,000)
Total Cost of Goods Sold
Gross Profit
Operating Expense
Office Supplies
Salaries
Utilities
Total Operating Expense
Net Income
($400,000)
$600,000
($50,000)
($225,000)
($25,000)
($300,000)
$300,000
Balance Sheet
• One of the 3 major financial statements
• Summarizes assets, liabilities, and
shareholder equity or net assets (nonprofit)
• Assets = Liabilities + Shareholder
Equity
• Both sides of equation must “balance”
out
•
http://www.investopedia.com/video/play/introduction-balancesheet#axzz1cjqs0ph6
Balance Sheet
11/11/2011
ASSETS
Current Assets
Cash
Accounts receivable
(less doubtful accounts)
Inventory
Temporary investment
Prepaid expenses
Total Current Assets
$62,950
60,880
62,150
2,650
$188,630
Fixed Assets
Long-term investments
Land
Buildings
Long-term Liabilities
Mortgage
Other long-term liabilities
Total Long-Term Liabilities
(less accumulated depreciation)
Plant and equipment
150,000
(less accumulated depreciation)
Furniture and fixtures
(56,870)
15,570
(less accumulated depreciation)
Total Net Fixed Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Accounts payable
Short-term notes
Current portion of long-term notes
Interest payable
Taxes payable
Accrued payroll
Total Current Liabilities
$22,420
1,800
6,000
1,140
$31,360
$30,000
$30,000
Shareholders' Equity
Capital stock
$110,000
(4,720)
$103,980
Retained earnings
Total Shareholders' Equity
121,250
$231,250
$292,610
TOTAL LIABILITIES & EQUITY
$292,610
Cash Flow Statement
• One of the 3 major financial statements
• Records all cash movement
• Inflows from operations and investments
• Outflows for business expenses and
investments
• http://www.investopedia.com/video/play/what-is-cash-flow#axzz1cjqs0ph6
Cash Flow Statement
Beginning Cash Position
Cash Flow from Operating Activities
Net Income
Depreciation Expense
Net Change in Accounts Receivable
Net Change in Account Payable
Total Adjustments to Operating Income
Net Cash Flow Provided by Operating Activities
Cash Flows from Investing Activities
Purchase of New Computers
Purchase of Assembly Line Machines
Decommissioning Fund Contributions
Net Cash Used in Investing Activities
Net Cash Flows from Financing Activities
Increase in Short Term Debt
Redemption of Long Term Debt
Issuance of Common Stock
Cash Dividends on Common Stock
Net Cash Provided by (Used in) Financing Activities
$6,000,000
$8,000,000
$4,000,000
($2,000,000)
$1,000,000
$3,000,000
$11,000,000
($1,500,000)
($2,000,000)
($500,000)
($4,000,000)
$500,000
($3,000,000)
$250,000
($2,000,000)
($4,250,000)
Net Increase / Decrease in Cash and Cash Equivalents
$2,750,000
Cash and Cash Equivalents at the End of the Period
$8,750,000
UMMC – Cash Flow
Total Operating Revenues
TOTAL OPERATING EXPENSE
CASH FLOW
ACTUAL BUDGET VARIANCE ACTUAL BUDGET VARIANCE ACTUAL BUDGET VARIANCE
SPD Fairview Riverside
SPD - FVH
Laundry Service & Dist
Linen Svc & Dist
Printing
Materials Administration
Materials Management
Materials Management
Receiving/Distribution
Receiving/Distribution
Materials Transportation
Transportation
Supply Chain Savings–Riv
Supply Chain Savings-Univ
Mail Room
Mail Room
$674,195 $4,138,104
$3,463,909 $1,044,292 $1,111,544
$2,238,158 $2,293,248
$67,252
$370,097 $3,026,560
$3,396,657
$55,090 $4,376,939 $3,417,634
$959,305 $2,138,781 $1,124,386
$1,014,395
$53,331
$127,008
$73,677 $1,500,110 $1,655,819
$155,709 $1,446,780 $1,528,811
$82,031
$69,788
$174,996
$105,208 $1,610,573 $1,971,980
$361,407 $1,540,784 $1,796,984
$256,200
$0
$0
$0
$233,943
$430,113
$196,170
$233,943
$430,113
$196,170
$0
$0
$0
$325,028
$356,541
$31,513
$325,028
$356,541
$31,513
$0
$0
$0 $1,309,487
$830,229
$479,258 $1,309,487
$830,229
$479,258
$0
$0
$0 $1,076,598
$753,065
$323,533 $1,076,598
$753,065
$323,533
$0
$0
$0
$253,219
$253,219
$2,336
$0
$0
$0 $1,307,789 $1,238,207
$69,582 $1,307,789 $1,238,207
$69,582
$0
$0
$0
$12,910
$0
$12,910
$12,910
$0
$12,910
$0
$0
$0
$754,953
$592,693
$162,260
$754,953
$592,693
$162,260
$0
$0
$0
$0
$523,082
$523,082
$0
$523,082
$523,082
$0
$0
$0
$0 $1,237,572
$1,237,572
$0 $1,237,572
$1,237,572
$76,304
$53,568
$22,736
$464,403
$439,684
$24,719
$388,098
$386,116
$1,982
$42,742
$52,212
$9,470
$349,095
$344,285
$4,810
$306,353
$292,073
$14,280
$250,883
$2,336
$250,883
General Ledger
• A company's formal accounting records.
• Contains all the financial accounts and
statements of a business.
• General Journal
• The Journal uses two columns: one records
debits, the other has offsetting credits.
GL Example Course 2.xlsx
ROA/ROI
• An organization’s financial performance is also
judged by the profit it generates in relationship to the
assets utilized, or return on assets (ROA).
• The supply chain plays a critical role in determining
the level of profitability in an organization.
• The level of inventory owned by an organization in its
supply chain determines the assets, or capital,
devoted to inventory.
• What are assets?
•
http://www.investopedia.com/video/play/return-on-assets#axzz1cjqs0ph6
These are Assets Too!
Productivity
• Metric that is monitored to ensure we
maximize our efficiency.
• Total hours/FTEs
• Target developed from historical data but
this assumes:
• Staff are managing your time each day
efficiently
UMMC SC - Productivity
Reimbursement
• Charges are applied by procedure
• 45%-50% of billed charges
• Pre-negotiated by insurance provider
• Example: Hip Replacement
• Days stayed
• Products used
• Nursing Hours
Costs Per Unit of Service
Quiz!!