Principles of Management

(PRIMAN)
Session 1
Daniel Angelo A. Besa, MBA
Instructor
PRESENTATION FLOW
• Administrative points
• Course introduction
• Grading system
• Final Project
• Who are you? INFO
• Accounting Scandals OVERLOAD!
• The Nature and Purpose of
Accounting
ADMINISTRATIVE POINTS
COURSE DESCRIPTION
• This course is an introduction to the basics of Financial Accounting
as a tool for making sounds business decisions.

• Its focus is orienting learners towards the principles of Accounting,

the preparation financial reports, and the interpretation of such
reports
FINAL PROJECT
Objective:
For the individual learner to apply the theories and analysis methods learned
during the course

Instructions:
1. Select an actual company, and 1-2 competitors with the given specifications
below
2. Acquire the company’s financial statements (Balance Sheet, Income
Statement, and Cashflow Statement)
3. Present your analysis through the use of a powerful presentation, and a
detailed paper
FINAL PROJECT
Company Qualifiers
1. The company/organization must have at least 10 employees, and has been in
operations for at least 3 years.
2. There is a formal management structure in place and that the owner-investor shares
decision making functions with non-owner(s) holding management positions.
3. There is no revenue limit – however, given the objective of applying management
concepts, it is ADVISED that the company and/or organization be at least making
PHP15 million, as such size will surely have some type of management structure,
policies, procedures etc. in place.
4. If the choice for the Final Paper is an NGO or a non-profit organization, please make
sure that there is a formal management structure in place as well as all other
aspects of company operations.
FINAL PROJECT
• The Company
• Brief background and history
• How it started and its ownership
• What the products/services are
• Recent performance / major accomplishments
• Intra-Company Analysis
• Balance Sheet analysis
• Income Statement analysis
• Cashflow analysis
• Financial Ratios
• Inter-Company Analysis
• Conclusion and Highlights
• Appendices
• Copy of Original Financial Statements of each company
• Common Sized Statements of each company
FINAL PROJECT
Pre-finals Presentation (Individual)
• 15 Slides
• Should contain the components stated in the Report Specifications section of this
document

Final Paper (Individual)

• 15 pages or less
• Font size 10
• Single space
• Should contain the components stated in the Report Specifications section of this
document
GRADING RUBRICS
Written Work
SUCCESS CRITERIA
NOT YET EXCEEDS EXPECTATIONS
(B-Grade)
Structure

- Opening paragraphs and

sentences grab the reader's
attention and sets the context of
the text.

- Texts follow a logical sequence

of events

- Closing paragraphs or sentences

have been able to effectively
complete the idea

4 points
3 points 5 points
Idea Development

- The student has been able to

provide enough details to
develop the main idea of the
paragraph or work

4 points
3 points 5 points
Grammar

- Elements of grammar are

observed. These include:
* Tenses
* Punctation
* Word order

3 points 4 points 5 points

Time expectations
The student gave the assignment
2 days or later than the assigned - The student gave the The student gave the assignment
date assignment 1 day late on the deadline or earlier

3 points 4 points 5 points

TOTAL: /20
GRADING RUBRICS
Presentation
SUCCESS CRITERIA
NOT YET EXCEEDS EXPECTATIONS
(B-Grade)
Delivery
Gets the attention of the listeners
and speaks clearly

Uses the correct tone, speed,and

volume as tools of engagement

4 points
3 points 5 points
Idea Development
Makes the purpose of the
presentation clear

A structure was followed for the

exposition of the speaker's ideas
during the speech or presentation

4 points

3 points 5 points
Language
Clear and concise language was
used to express ideas during the
speech or presentation

4 points

3 points 5 points
TOTAL: /15
GRADING RUBRICS
Grade Equivalents

Grade Percentage Definition

1.00 97 – 100 Excellent
1.25 94 – 96 Very Good
1.50 91 – 93 Good
1.75 88 – 90 Fair or Pass
2.00 – 4.99 1 – 87 No Credit
5.00 0 Failed
ANY QUESTIONS FOR ME?
WHO ARE YOU?
WHO ARE YOU?
• Full Name
• Nickname
• Current company
• What’s weird about you?
• What kind of manager are you?
• What do you expect from my class?
WHO AM I?
How do you call me?
• Dan, Sir Dan – Not Mr. Clean!

What was my previous job?

• Researcher, Banker

What’s weird about me?

• A lot of things
• I collect historical artifacts
• I bike around the place!
ANY QUESTIONS FOR ME?
ACCOUNTING SCANDALS
PRESENTATION
THE NATURE AND
PURPOSE OF ACCOUNTING
The Need For Information
• Quantitative information is information
that is expressed in numbers.
• Examples of non-quantitative
information are visual impressions,
conversations, television programs, and
newspaper stories.
• Accounting is primarily concerned with
quantitative information
• Types of information:
• Operating information
• Financial Accounting Information
• Management accounting Information
• Tax accounting information
The Need For Information
Type of Information Definition
Operating Information used to conduct day-to-day activities
Financial Intended both for managers and also for the use of parties external to the
organization, including shareholders (and trustees in nonprofit organizations),
banks and other creditors, government agencies, investment advisers, and the
general public
Management Accounting Information meant to aid managers. Used for:
• Planning
• Implementation
• Control
Tax Accounting Details used to determine taxes, and tax reporting
The Profession of Accounting
• People primarily involved with accounting:

Bookkeepers Staff concerned with data entry and maintaining details

operating records
Staff accountants Personnel who decide how items should be reported
Our Approach to Accounting
• Accounting can be approached from either of two directions:
• the viewpoint of the accountant
• the viewpoint of the user of accounting information

• Accountants need to know how information is to be used because

they should collect and report information in a form that is most
helpful to those who use it.
• Users need to know what the accountant does; otherwise, they are
unlikely to understand the real meaning of the information that is
provided
Our Approach to Accounting
Preconceptions about Accounting

• Accounting information is everywhere

• Examples of accounting information:
• Receipts
• Bank statements
• Bills
• Checks
• Some terms are used wrong
Ex.
Assets =/= Valuable things
Assets = A resource with economic value that an individual,
corporation, or country owns or controls with the expectation
that it will provide a future benefit
The Financial Accounting Framework
Accounting as a Language, and Principles

• Accounting is known as the Language of Business

• Principles are general laws or used as a guide to act
• Principles are taught because not all matters in accounting
practices are the same across businesses, and industries
The Financial Accounting Framework
Criteria of Accounting Principles
Criteria Definition
Relevance Extent it results in information that is meaningful and useful to users
Objectivity How the information is not influenced by external bias or judgement by
those providing it
Feasibility Extent a point can be implemented without undue cost or complexity
The Financial Accounting Framework
Source of Accounting Principles

• Sources of Accounting principles:

• Generally Accepted Accounting Principles (GAAP)
• Financial Accounting Standards Board (FASB)
• Companies are not legally required to adhere to GAAP as
established by the FASB. As a practical matter, however, there are
strong pressures for them to do so
• FASB and GAAP’s authority are limited in the US. But Philippine
principles are very similar
Financial Statements
An Introduction

• GAAP requires the preparation of three accounting documents:

• Statement of Financial Position (Balance Sheet)
• Income Statement
• Statement of Cash Flows
• Types of reports:
• Stocks or status – Balance Sheet
• Flow – Income Statement, and Cash flow
• Sources of reports:
• Company website
• Securities and Exchange Commission (SEC)
Financial Statements
Balance Sheet
 Financial Statements
Balance Sheet – Major points

Date is important since this is

a snapshot of the company’s
resources

Both sides of the Balance

Sheet are always equal
Financial Statements
Balance Sheet – Accounting Equation

Assets = Liabilities + Owner’s Equity

Assets - Liabilities = Owner’s Equity

 Financial Statements
Balance Sheet

Liabilities: Obligations
owed by the entity

Assets: Valuable resources

owned by the entity

Owner’s Equity:
The amounts the
owners have invested
into the entity
 Financial Statements
Balance Sheet: Assets

Current Assets: Items which

are expected to be realized in
cash, sold or consumed within
a company's operating cycle
(ex. 1 year)

Noncurrent assets: Items

which are expected to be
realized in cash, sold or
consumed after more than 1
year
Financial Statements
Balance Sheet

Current Liabilities:
Obligations to be
fulfilled within an
operating cycle

Current Liabilities:
Obligations to be
fulfilled after more
than 1 year
Financial Statements
Income Statement

Revenues – Expenses = Net Income

ANY QUESTIONS FOR ME?
Exercise 1
Exercise 2
Homework
1. Read Chapter 2 on the Balance sheet in Accounting: Text and
Cases
2. Solve Problems 2-1 to 2-6 individually
3. Prepare to submit a solution to Case 2-1: Maynard Company (A).
Team 1 will present the solution in class