2. Read financial statements like a story in 5 minutes Mode 2 Making money and creating wealth

3. 2 Statements related by blood  The income statement showing how we make money  Balance sheet or how we create wealth

4. Income statement

5. Balance sheet

6. Can we make money and destroy wealth at the same time

7. Absolutely! Think about the story told in model 1 The business made money (operating profit = 5.5 per revenue dollar) Return on the invested $ went from 20 to 10 cents

8. Can we lose money and create wealth at the same time

9. Both yes and no Because the yes case happens in so few occasions can we leave this for a later date

10. The relationship Income statement Balance sheet Net profit after all deductions increases the equity value in the balance sheet The net profit per the income statement becomes a funding source for future investment requirements

11. The relationship Income statement Balance sheet Resources and funding The balance sheet provides resources (tangible and intangible) to enable the ability to make money.

12. The relationship Income statement Balance sheet Relationship based on dependency and accountability

13. Relationship dependency and accountability Income statementBalance sheet Dependency That the balance sheet will make the available resources required to continue to make money On the income statement to assist in the funding of future investment requirements Accountability To make as much money with the available resources To make wise investment and funding decisions. Funding decisions impact risk. Investment decisions impact wealth.

14. What's next  Module 3  Its time for a little fun  Did you know every set of financial statements has 3 characters  In module 3 you will get to know them  It’s a secret until we get there

15. Feedback please Please provide your feedback to either Mick Holly mickholly@finacialstatementstory.com or Andre Gien andregien@financialstatementstory.com or on the website www.finacialstatementstory.com mickholly@finacialstatementstory.com andregien@financialstatementstory.com www.finacialstatementstory.com Andre is our Evidence Wizard. He combines the Passion of intuition with the Power of Evidence to weave amazing stories that reveal the secrets and treasures that are locked within financial statements. He has deployed the financial statement story discipline in over 150 different companies releasing more than $500million in value and more importantly, demystifying the financial statements for thousands of people. Andre's favorite quote: "If you change the way you look at things, the things you look at change" Mick is Chief Treasure Hunter. Over the last 30 years Mick has consulted with the world’s leading companies to identify and implement performance improvements. He has discovered that behind every person and company is a story. Sometimes it’s a rocking adventure, sometimes a comedy, a mystery, a drama and on occasion, a tragedy. Going beyond mundane numbers and engaging in the story is the key to helping companies and individuals build corporate and personal wealth.