Page 38 - Finance for Non-Financial Managers

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The Structure and Interrelationship of Financial Statements
then give you an income statement and statement of cash flow,
adding up the changes that happened during the month-long
activity, and a balance sheet, which shows where everything was 19
on that last day of the month, when they pressed the “freeze
frame” button. A quick look at the balance sheet shows you
exactly where everything was at month end: how much the com-
pany was owed, how much cash it had in the bank, how much it
owed to creditors at that exact moment, and lots more. In much
the same sense as in the football game, the balance sheet is a
snapshot of a single instant in the life of the company.
What’s the big difference here? For the football game, you
had to do your own analysis, using only your eyesight and your
knowledge of the game of football. Of course, you can get extra
value from hearing the announcers, particularly the ex-coach-
turned-announcer, because they always describe things that
their experience and keen eyes picked up that you didn’t. The
better you know the game, of course, the more useful informa-
tion you can get from what they say, although the vast majority
of listeners will miss most of the nuances.
In your company, by comparison, the accountants likely
have in-depth experience and analytical tools to look at the
data from different angles
and they can prepare The Inside Edge
reports that tell you and The more you know about
others what the analysis the game of football, the more valu-
reveals. Because you are able insights you will get from the
always using the recording game reports, even though the vast
and replay device, the majority of readers will miss most of
the nuances. Not surprisingly, the
“ATR,” you can study
analogy carries over.The more famil-
those reports at your
iar you are with the concepts of
leisure and even ask for
accounting and finance, the more of
clarification without losing the “hidden” information you’ll get
a minute of company from your company’s financial reports
“game time.” You could and the less time it will take you to
read the reports yourself get it, even though others may miss
without their help, but you the point entirely.