1. Interpret Change in Financial Position Over a Period of Time
Principles of Cost Analysis and Management

2. Terminal Learning Objective
Action: Interpret Change in Financial Position over a period of time.
Condition: FM Leaders in a classroom environment working individually and as a member of a small group, using doctrinal and administrative publications, self-study exercises, personal experiences, practical exercises, handouts, and discussion.
Standard: With at least an 80% accuracy (70% for international Learners):
Identify Changes in Financial Position
Analyze Financial Activity; Detailed Breakdown

3. What if Gomer inherits $1,000,000?
Changes in Financial Position
What if Gomer inherits $1,000,000?

4. Changes in Financial Position (Cont.)
The Statement of Financial Position (Balance Sheet) reflects the Assets, Liabilities and Net Assets as of a SINGLE DATE. (Like a snapshot)
Beginning
Financial
Position
Ending
Statement of Activities

5. Changes in Financial Position (Cont.)
The Statement of Activities, or Income Statement, reflects activity for a period of time. (Like a video)
Beginning
Financial
Position
Ending
Statement of Activities

6. Changes in Financial Position (Cont.)
Under the Cash Basis of Accounting:
Revenues:
Represent earnings received in cash
Increase Assets and Increase Financial Position sent earnings rec in cash
Costs:
Represent cash payments for goods and services received
Decrease Assets and Decrease Financial Position payments for goods and services ncial Position
Revenues – Costs =
Net Change in Financial Position

7. The Simmons: Statement of Financial Position 1/1/XX
Assets: House $230,000 Car 6,000 Furniture 3,000 Clothing 750 Cash 327 Total $240,077
Liabilities: Mortgage $225,000 Credit Card 2,300 Property Tax 2,500 Hospital 950 Total Liabilities $230,750 Net Assets: 9,327 Total $240,077
NOTE: ‘XX’ represents current FY

8. LSA #1 Check on Learning
Q1: What is the equation for the change in financial position? A1. Q2: What is the name of the statement that describes changes in financial position? A2.
Q1: What is the equation for the change in financial position?
A1. Revenues – Costs = Net Change
Q2: What is the name of the statement that describes changes in financial position?
A2. Statement of Activities

9. LSA #1 Summary
During this block, we discussed Financial Position, the various terms associated with Financial Position, along with changes. We also viewed a detailed breakdown of the Simmons family financial activities.

10. The Simmons: Financial Activity for January
Date Activity Cash Amount 2-Jan Madge puts gasoline in the car Jan Gomer buys doughnuts 35 7-Jan Gomer’s paycheck Jan Madge buys groceries Jan Lacy has a dentist appointment Jan Bert breaks a window Jan Madge babysits the neighbor kids Jan Gomer’s paycheck Jan Madge pays interest on mortgage 938
Task: Calculate the Net Change in Financial Position for January.

11. Changes in Financial Position (Cont.)
Q1. What are the Revenues? A1. Gomer’s gross pay and Madge’s babysitting Q2. What are the Costs? A2. Tax withholding , gasoline, doughnuts, groceries, dentist, window, and mortgage interest Q.3 What is the Net Change in Financial Position? A3. Revenues $1,875 – Costs $1,843 = 32 Increase Q4. What is the Ending Financial Position? A4. ?????Discuss?????

12. LSA #2 Check on Learning
Q1. Revenues are counted when they are? A1. ________ __ ____ Q2. Costs are counted when they are? A2. ____ __ ____
Q1. Revenues are counted when they are?
A1. Received in Cash
Q2. Costs are counted when they are?
A2. Paid in Cash
This is known as the Cash basis of accounting. We will look at other ways of counting revenues and costs in future lessons. 12

13. LSA #2 Summary
During this learning Activity, we delved a bit deeper into Activity sheets, discerning the difference between revenues and costs. Also covered is the “Net change in Financial Position” formula. 13

14. The Simmons: Statement of Activities for month of January 20XX
Revenues: Gomer’s Salary (Gross) $1,850 Madge’s babysitting 25 Total Revenues $1,875 Costs: Interest $938 Groceries 600 Gasoline 120 Dentist 100 Broken Window 50 Doughnuts 35 Total Costs 1,843 Net Change in Financial Position 32 Add: Financial Position January 1, 20XX 9,327 Financial Position January 31, 20XX $9,359

15. Graphic Representation of Net Change
$1875
$32
$1843

16. Graphic Representation of Net Change (Cont.)
$9359
$32
$9327

17. The Simmons: Statement of Financial Position 1/31/XX
Assets: House $230,000 Car 6,000 Furniture 3,000 Clothing 750 Cash (327+32) 359 Total $240,109
Liabilities: Mortgage $225,000 Credit Card 2,300 Property Tax 2,500 Hospital 950 Total Liabilities $230,750 Net Assets: 9,359 Total $240,109

18. LSA #3 Check on Learning
Q1. What activities will cause financial position to increase? A1. Q2. What activities will cause financial position to decrease? A2.
Q1. What activities will cause financial position to increase?
A1. Revenues
Q2. What activities will cause financial position to decrease?
A2. Cost

19. LSA #3 Summary
During this block of instruction, we discussed another Simmons “Statement of Activities” scenario and provided a graphic representation.

20. Practical Exercise / Review

21. Statement of Activities Spreadsheet
Enter Transaction Data into the register

22. Statement of Activities Spreadsheet (Cont.)
After entering Data,
Press button to
Create Statement
Of Activities

23. Statement of Activities Spreadsheet (Cont.)
Statement of Activities shows:
Total Revenues,
Total Costs ,
Change in Financial Position, and Ending Financial Position

24. TLO Check on Learning
Q1. The Statement of Financial Position can also be called this.
A1.
Q1. The Statement of Financial Position can also be called this.
A1. Balance Sheet

25. TLO Summary
Action: Interpret Change in Financial Position over a period of time.
Condition: FM Leaders in a classroom environment working individually and as a member of a small group, using doctrinal and administrative publications, self-study exercises, personal experiences, practical exercises, handouts, and discussion.
Standard: With at least an 80% accuracy (70% for international Learners):
Identify Changes in Financial Position
Analyze Financial Activity; Detailed Breakdown
Review the GFEBS Budget Reporter (Role)