Royaume du Maroc ‫المملكة المغربية‬

Ministère de l’Education Nationale, de la ‫وزارة التربية الوطنية والتكوين المهني و‬

Formation Professionnelle, de l’Enseignement ‫التعليم العالي‬
Supérieur et de la Recherche Scientifique
‫و البحث العلمي‬
Université Sidi Mohamed Ben Abdellah
‫جامعة سيدي محمد بن عبد هللا‬
Faculté des Sciences Juridiques Economiques et
-‫كلية العلوم القانونية واالقتصادية واالجتماعية‬
Sociales-Fès
‫فــاس‬

Module : Anglais de la finance

Master FCA : FINANCE, CONTROLE ET AUDIT

Professeur : Mme Zineb BENNIS NECHBA

Année universitaire : 2023/2024

Entrepreneurship skills
Who is an Entrepreneur?

3
 Entrepreneurship Skills

Technical Managerial Interpersonal

skills skills skills
 Technical Skills for Entrepreneurs

Product Operations
Marketing Finance
development management
Managerial Skills for Entrepreneurs

Project management

Team building

Leadership
 Interpersonal Skills for Entrepreneurs

Customer
Networking Negotiation
service
Creativity
Innovation
Personal Characteristics of Successful
Entrepreneurs

•Persistent •Goal-oriented
•Creative •Independent
•Responsible •Self-confident
•Curious •Risk taker
•Flexible •Coachable
9
The business model canvas
The business model canvas
Business Finance
Corporate Valuation and financial statements
What types of financial statements are typically
included in the annual report?

The The
Balance Income
Sheet Statement

Cash flow
statement
 Balance sheet
• It a financial statement that reports a company's assets, liabilities, and shareholder equity.

• It represents “snapshots” of a financial position on the last day of each year.

• A balance sheet consists of two main headings: assets and liabilities.

• The left side of a balance sheet lists assets, which are the “things” the company owns.
They are listed in order of “liquidity,” or length of time it typically takes to convert them to
cash at fair market values.

• The right side lists the claims that various groups have against the company’s value,
listed in the order in which they must be paid.
 Balance sheet
1. Assets

Accounts within this segment are listed from top to bottom in order of their liquidity. This is the ease
with which they can be converted into cash. They are divided into current assets, which can be
converted to cash in one year or less; and non-current or long-term assets, which cannot.
The general order of accounts within current assets:
• Cash and cash equivalents are the most liquid assets and can include Treasury bills and short-term
certificates of deposit.
• Marketable securities are equity and debt securities for which there is a liquid market.
• Accounts receivable (AR) refer to money that customers owe the company. This may include an
allowance for doubtful accounts as some customers may not pay what they owe.
• Inventory refers to any goods available for sale
 Balance sheet
Long-term assets include the following:

• Long-term investments are securities that will not or cannot be liquidated in the
next year.

• Fixed assets include land, machinery, equipment, buildings, and other durable,
generally capital-intensive assets.

• Intangible assets include non-physical (but still valuable) assets such as intellectual
property and goodwill.
 Balance sheet

2. Liabilities

• A liability is any money that a company owes to outside parties.

• Current liabilities are due within one year and are listed in order of their due date.

• Long-term liabilities, on the other hand, are due at any point after one year.
 Balance sheet

2. Liabilities
• Accounts payable is often the most common current liability. Accounts payable is debt
obligations on invoices processed as part of the operation of a business that are often due within
30 days of receipt.

• Long-term debt includes any interest and principal on bonds issued

• Pension fund liability refers to the money a company is required to pay into its employees'
retirement accounts

• Deferred Tax liability is the amount of taxes that accrued but will not be paid for another year.
 Test Questions

Use the following information to answer the questions. The following data is available for Car Bop, for 2022:

✓ Amounts owed by customers: $75,000

✓ Cost of unsold product: $90,000
✓ Cash balance: $110,000
✓ Amounts owed for unpaid purchases and expenses: $72,000
✓ Notes payable to bank: $73,000
✓ Unearned revenues: $10,000
✓ Cash sales for 2022: $227,000
✓ Credit sales for 2022: $133,000
✓ Cost of goods sold for 2022: $175,000

Questions :
1-What are the total assets on Car Bop’s balance sheet?
2-What are the total liabilities on Car Bop’s balance sheet?
3- What is the total equity on Car Bop’s balance sheet?
 Test Questions

1- What are the company’s total liabilities?

2- What is the company’s total equity?
3- What are the company’s total assets?
4- What are the company’s total current assets?
5- What does the $12,000 in retained earnings mean?
6- What are the company’s current liabilities?
7- If the company did not accept credit payments and only made cash sales, what account would not be included
on its balance sheet?
8- How does the company get paid by its customers?
 Income statement (The Profit and Loss Account)
• The Income Statement lists the company’s revenues and expenses and gives the
difference between them. This difference is called net income.
• For the most part, revenues arise from selling goods or services. Expenses are the
costs involved in operating the business.
• Some examples of accounts that are classified as revenues and expenses are:

Revenues Expenses
Sales Cost of goods sold

Interest income Salary expense

Rent expense
Tax expense

Interest expense
 Income statement

• Salary expense is also known as Wage expense or Payroll expense

• The Income Statement is concerned with how much money the company brought in

and how much it spent in order to bring that money in.

• Income statements can cover any period of time, but they are usually prepared monthly,

quarterly, and annually. Unlike the balance sheet, which is a snapshot of a firm at a

point in time, the income statement reflects performance during the period.
• The second accounting equation relates to ongoing activity

- REVENUES – EXPENSES = PROFIT

- Income – Outgo = Outcome
 Test Questions
• Use the following information to answer the questions. Hummus Records has the following
current‐year information in its accounting records:
✓ Sales revenue: $47,000
✓ Interest revenue: $1,200
✓ Selling expenses: $14,000
✓ General expenses: $3,000
✓ Cost of goods sold: $20,000
✓ Tax expense: $2,200
Questions :
• 1- Calculate the gross profit for Hummus Records.
• 2- Calculate the operating income for Hummus Records.
• 3- Calculate the income before taxes for Hummus Records
 Test Questions
Use the following information to answer the questions. The following data is available for Koala Kuddles for 2022:
• ✓ Sales revenue: $15,000,000
• ✓ Cost of goods sold: $12,400,000
• ✓ Interest expense: $125,000
• ✓ Selling, general, and administrative expense: $1,450,000
• ✓ Loss on the sale of equipment: $275,000
• ✓ Income tax expense: $200,000
• ✓ Cost of new equipment: $800,000
Questions :
1- What is the amount of gross profit on Koala Kuddles’ 2022 income statement?
2- What is the amount of operating earnings on Koala Kuddles’ 2022 income statement?
3- What is the amount of earnings or loss before income taxes on Koala Kuddles’ 2022 income statement?
4- What is the amount of net income or loss on Koala Kuddles’ 2022 income statement?
 Test Questions
Use the following information to answer the questions. The following data is available for Petal Bikes for
2015:
• ✓ Sales revenue: $8,000,000
• ✓ Gross margin: $2,000,000
• ✓ Operating earnings: $650,000
• ✓ Earnings before income tax: $420,000
• ✓ Net income: $180,000
• ✓ Petal Bikes had no gains or losses and no interest revenue in 2015.
Questions :
• 1- What is the amount of income tax expense on Petal Bikes’ 2015 income statement?
• 2- 70. What is the amount of the cost of goods sold on Petal Bikes’ 2015 income statement?
• 3- 71. What is the amount of selling, general, and administrative expenses on Petal Bikes’ income statement?
• 4- 72. What is the amount of interest expense on Petal Bikes’ 2015 income statement?
 Test questions
• The information below relates to a company as at 31 December.
- Present this information as a balance sheet using each of the following presentations.

• (i) Non-current assets + working capital=shareholders’ equity + non-current liabilities

• (ii) Non-current assets + current assets = shareholders’ equity + non-current liabilities+
current liabilities
• (iii) Non-current assets + working capital-non-current liabilities = shareholders’ equity
Test questions
 Analysis of company financial
statements
• Once a business has produced its financial statements an important next step is to
interpret the information that has been provided. This interpretation can help the
owner, partners or shareholders to evaluate the information contained in the
financial statements to draw inferences and conclusions.

• A key analytical tool in examining accounts is the use of ratio analysis. Ratios are
concerned with the relationship between key figures in financial statements. Ratios
can be used to establish and compare a trend of figures within the same business or
to compare similar sized businesses in the same sector with each other.
 Analysis of company financial
statements

• Although there are no definitive categories of ratios, it is often convenient to

classify ratios under the following key headings:

• Liquidity Ratios

• Activity Ratios

• Profitability Ratios

• Capital structure Ratios

 Analysis of company financial
statements
• Measures of Liquidity:

Liquidity ratios provide a measure of a company’s ability to generate cash to meet its
immediate needs. The two most commonly used liquidity ratios are the current ratio
and the quick ratio. The current ratio is the ratio of current assets to current
liabilities. This ratio indicates a company’s ability to satisfy its current liabilities with
its current assets:
 Analysis of company financial
statements
• The quick ratio is the ratio of quick assets (generally current assets less inventory)

to current liabilities. This ratio indicates a company’s ability to satisfy current

liabilities with its most liquid assets:

A ratio of 1:1 is considered safe.

 Analysis of company financial
statements

• Activity Ratios

Activity ratios are measures of how well assets are used. Activity ratios can be used to
evaluate the benefits produced by specific assets, such as inventory or accounts
receivable. The most common turnover ratios are the inventory turnover, the total
asset turnover, and the accounts receivable turnover.
 Analysis of company financial
statements

• Activity Ratios

Accounts receivable turnover is the ratio of net credit sales to accounts receivable.
This ratio indicates how many times in the period credit sales have been created and
collected on:
 Analysis of company financial
statements

• Activity Ratios

Total asset turnover is the ratio of revenues to total assets:

 Analysis of company financial
statements

• Inventory turnover is the ratio of cost of goods sold to inventory. This ratio

indicates how many times inventory is created and sold during the period:
 Test questions
Trendy Royal Coaches has these comparative balance sheets:

Calculate the current ratio for 2015.

 Test questions
Trendy Royal Coaches has these comparative balance sheets:

Credit sales were $475 in 2015, and returns were $25. Calculate accounts receivable turnover
 Test questions

• Trendy Royal Coaches has these comparative balance sheets:

Credit sales were $475 in 2015, and returns were $25. Cost of goods sold was $285 in
2015. Calculate inventory turnover for 2015.
 • Closet Queen Organizers has the following financial statements:

Selected information from the 2015 financial statements:

✓ Interest expense: $8
✓ Tax expense: $10
✓ Net income: $20
✓ Cash dividends paid: $164
✓ Capital expenditures: $310
✓ Net cash provided by operating activities: $35
Calculate the debt to assets ratio in 2014 and 2015 and indicate whether the company’s solvency is improving.
 Capital structure ratios
• This ratio indicates the relative proportions of debt and equity in financing the assets
of a firm.

A high debt-to-equity ratio indicates that a company is borrowing more capital from
the market to fund its operations, while a low debt-to-equity ratio means that the
company is utilizing its assets and borrowing less money from the market.
The acceptable debt-to-equity ratio is between 1-2.
 Capital structure ratios

It indicates what proportion of the permanent capital of a firm consists of debt. It

measures the share of the total assets financed by outside funds.

A low ratio is desirable for creditors. A firm should neither have a high ratio nor a low
ratio.
 Profitability ratios

It measures the profit in relation to sales.

Gross profit is the difference between sales revenue and the costs related to the products
sold.
 Profitability ratios
It measures the profitability of the total funds per investment of a firm.

ROA simply shows how effective the company is at using those assets to generate
profit.
 Profitability ratios
Return on equity (ROE) is the net income divided by shareholder equity.

It tells what percentage of profit you make for the equity invested in the company
The following are the accounts of SPHINX company, Statement of financial position
(summarised) as on 31st March, 2014 and 31st March, 2013.
Calculate and comment on the following ratios for SPHINX.
• (1) Gross profit margin
• (2) Asset turnover
• (3) Current ratio
• (4) Quick ratio
• (5) ROA