1. Calculate Financial Position
Principles of Cost Analysis and Management
Show Slide #1: Calculate Financial Position
Title: Calculate Financial Position
References: Excel spreadsheets, lesson created notes.
Instructor Material: Each primary facilitator should possess a lesson plan, slide deck, course handouts, practical exercises, access to Bb.
All required references and technical manuals will be provided by the local Command.
Learner Material: Learners should possess course handouts, practical exercises, access to Bb
and standard classroom supplies.

2. Why is it useful to know an entity’s financial position?
Show Slide #2: Concrete Experience
Facilitator’s Note: (Concrete Experience 5 minutes) Discuss with the Learners “Why is it useful to know an entity’s financial position. Ask Learners what their thoughts of the question.
Facilitator’s Note: (Publish and Process 5 minutes) The critical portion of this part of the ELM process is to force the Learners to reflect. Ask a series of thought influencing questions, for example:
Q1: Would the Financial Position of a company determine whether or not you apply there?
Q2: Could “Corporate Espionage” play a factor in a company’s financial standing?
Q3: As per the books, “an insane amount of money in a short amount of time” Red flags or not?
Facilitator’s Note: Accounting information should be useful. What is useful about an entity’s financial position?
In one sense, it is like GPS. It tells where we are now. If we don’t know where we are now, we won’t know how to get to where we want to be, or how far we have come at a future date.
It also gives a snapshot of our financial ability to continue into the future. What resources do we have available? What obligations do we have?

3. Terminal Learning Objective
Action: Calculate Financial Position
Condition: FM Leaders in a classroom environment working 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 80% accuracy (70% for international students) you must:
Define / Explain Financial Position
Demonstration problem – Classify Assets and Liabilities
Reporting Financial Position
Show Slide #3: TLO
Action: Calculate Financial Position
Conditions: FM Leaders in a classroom environment working 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 80% accuracy (70% for international students) you must:
Define / Explain Financial Position
Demonstration problem – Classify Assets and Liabilities
Reporting Financial Position
Safety Requirements: In a training environment, leaders must perform a risk assessment in accordance with DA PAM , Risk Management. Leaders will complete a DD Form 2977 DELIBERATE RISK ASSESSMENT WORKSHEET during the planning and completion of each task and sub-task by assessing mission, enemy, terrain and weather, troops and support available-time available and civil considerations (METT-TC). Local policies and procedures must be followed during times of increased heat category in order to avoid heat related injury. Consider the work/rest cycles and water replacement guidelines IAW TRADOC Regulation
Environmental Considerations: Environmental protection is not just the law but the right thing to do. It is a continual process and starts with deliberate planning. Always be alert to ways to protect our environment during training and missions. In doing so, you will contribute to the sustainment of our training resources while protecting people and the environment from harmful effects. Refer to FM Environmental Considerations and GTA ENVIRONMENTAL-RELATED RISK ASSESSMENT.
INSTRUCTIONAL LEAD-IN. Accounting information should be useful. What is useful about an entity’s financial position?
In one sense, it is like GPS. It tells where we are now. If we don’t know where we are now, we won’t know how to get to where we want to be, or how far we have come at a future date.
It also gives a snapshot of our financial ability to continue into the future. What resources do we have available? What obligations do we have?

4. Meet the Simmons Family
Gomer, Madge and kids:
Bert, Lacy and baby Maddie
Stunt doubles for a popular cartoon family
Task: Calculate the family’s Financial Position
Show Slide #4: Meet the Simmons Family
1. Learning Step Activity 1 – Define / Explain Financial Position
Method of Instruction: DSL: Discussion (Small or Large Group)
Instructor to Learner Ratio: 2:25
Time of Instruction: 20 minutes
Media: Slides, Printed Reference Material
Facilitator's Note: Before facilitating this lesson, ask the students which of the 21st Century Soldier Competency do they think pertain to this lesson? Facilitate a discussion on the answers given and at the end of the lesson revisit it and see if the students still believe their choice are the same.
Facilitator's Note: For this lesson these competencies should be talked about.
Communication and Engagement (Oral, written, and negotiation)
Critical thinking, intergovernmental, and multinational competence
Tactical and Technical Competence
Throughout the lesson discussion seek opportunities to link the competencies with the lesson content through the Learner’s experiences.
Facilitator's Note: We will use a fictional family example to demonstrate the concept of financial position. That family is the “Simmons” family, Gomer, Madge, Bert, Lacy and baby Maddie.
They are stunt doubles for a popular cartoon family who is unavailable due to contractual obligations (and legal copyright reasons as well!)
Facilitator's Note: Hopefully the instructor and Learners will make the connection. Calculators (personal or CPU) will need to be used.

5. What is Financial Position?
Financial position is represented by the equation:
Assets – Liabilities = Financial Position Or
Assets = Liabilities + Financial Position
Financial Position may also be called Equity or Net Assets
Show Slide #5: What is Financial Position
Facilitator's Note: Define terminology used in basic accounting (Facilitate discussion using the slide)
Financial position is represented by the equation:
Assets – Liabilities = Financial Position
Or (by adding Liabilities to both sides of the equation)
Assets = Liabilities + Financial Position
**Financial Position may also be called Equity or Net Assets

6. What’s an Asset? An Asset is: What kinds of assets might the Simmons
Something you OWN
Represents FUTURE BENEFIT
What kinds of assets might the Simmons
What kinds of assets might the Simmons family own?
ilywn
OWN
FUTURE BENEFIT
Show Slide #6: What is an Asset?
Facilitator's Note: Define terminology used in basic accounting. The Learners should have a fill-in-the-blanks version. Blanks would be “OWN” and “FUTURE BENEFIT” (Facilitate discussion on answers given)

7. What’s a Liability? A Liability is:
Something you OWE
Represents FUTURE SACRIFICE
A creditor’s CLAIM ______against your assets
What kinds of Liabilities might the Simmons family have?
OWE
FUTURE SACRIFICE
CREDITOR’S CLAIM
Show Slide #7: What is a Liability?
Facilitator Note- Define terminology used in basic accounting. Learners would have the fill-in version. Blanks are OWE, FUTURE SACRIFICE, and CREDITOR’S CLAIM (Facilitate discussion on answers given)
What kinds of Liabilities might the Simmons family have?

8. LSA #1 Check on Learning
Q1. What is the equation to represent financial position? A1. Assets – Liabilities = Financial Position Or Assets = Liabilities + Financial Position Q2. Which element of the equation represents future benefits of the entity? A2. Assets
Show Slide #8: LSA#1 Check on Learning
Facilitator’s Note: Ask check on learning question, facilitate discussion on answer given.
Q1. What is the equation to represent financial position?
A1. Assets – Liabilities = Financial Position Or
Assets = Liabilities + Financial Position
Q2. Which element of the equation represents future benefits of the entity?
A2. Assets

9. LSA #1 Summary
For this learning step, we spoke of the Simmons Family Budget and covered some basic acronyms such as assets and liabilities.
Show Slide #9: LSA#1 Summary
Facilitator’s Note: Class, for this learning step, we spoke of the Financial concept of Financial Position, The Simmons Family Budget and covered some basic acronyms such as assets and liabilities.

10. Sorting the Data Madge’s stack of papers contains the following:
Deed to the house $230,000
Mortgage note on house ,000
Title to the car ,000
Grocery receipts
Furniture receipts ,000
Credit card statements ,300
Property tax bill ,500
The kids’ birth certificates
Hospital bill for Maddie
Clothing receipts
Bank Statement (reconciled balance)
Cash in Madge’s purse
Task: Calculate the Simmons’ Net Worth
Show Slide #10: Sorting the Data
2. Learning Step Activity 2: Demonstration problem – Classify Assets and Liabilities
Method of Instruction: DSL: Discussion (Small or Large Group)
Instructor to Learner Ratio: 2:25
Time of Instruction: 20 min
Media: Slides, Printed Reference Material
Facilitator's Note: Go over the data with the class, making sure to identify the task. (Facilitate discussion using the slide)
Go through the list and ask the class to identify each as an asset or a liability
Deed to the house $230,000 (A)
Mortgage note on house ,000 (L)
Title to the car ,000(A)
Grocery receipts
Furniture receipts ,000(A)
Credit card statements ,300(L)
Property tax bill ,500 (L)
The kids’ birth certificates
Hospital bill for Maddie (L)
Clothing receipts (A)
Bank Statement (reconciled balance) (A)
Cash in Madge’s purse (A)
Facilitator's Note: Go on to the next page, or work the example on the board or overhead projector

11. Sorting the Data (Cont.)
Madge’s stack of papers contains the following:
Deed to the house $230,000
Mortgage note on house ,000
Title to the car ,000
Grocery receipts
Furniture receipts ,000
Credit card statements ,300
Property tax bill ,500
The kids’ birth certificates
Hospital bill for Maddie
Clothing receipts
Bank Statement (reconciled balance)
Cash in Madge’s purse
Task: Calculate the Simmons’ Net Worth
Show Slide #11: Sorting the Data (Cont.)
Facilitator's Note: Look the this Demonstration problem – Classify Assets and Liabilities (Facilitate discussion using the slide)
The green-highlighted items are assets:
Deed to the house $230,000 (A)
Title to the car ,000(A)
Furniture receipts ,000(A)
Credit card statements ,300(A)
Clothing receipts (A)
Bank Statement (reconciled balance) (A)
Cash in Madge’s purse (A)

12. Sorting the Data (Cont.)
Madge’s stack of papers contains the following:
Deed to the house $230,000
Mortgage note on house ,000
Title to the car ,000
Grocery receipts
Furniture receipts ,000
Credit card statements ,300
Property tax bill ,500
The kids’ birth certificates
Hospital bill for Maddie
Clothing receipts
Bank Statement (reconciled balance)
Cash in Madge’s purse
Task: Calculate the Simmons’ Net Worth
Show Slide #12: Sorting the Data (Cont.).
Facilitator's Note: Look at the demonstration problem – Classify Assets and Liabilities (Facilitate discussion using the slide)
The red-highlighted items are liabilities:
Mortgage note on house ,000 (L)
Property tax bill ,500 (L)
Hospital bill for Maddie (L)

13. Classifying Assets & Liabilities
Assets: House $230,000 Car 6,000 Furniture 3,000 Clothing 750 Cash (Bank + purse) Total $240,077.47
Liabilities: Mortgage $225,000 Credit Card 2,300 Property Tax 2,500 Hospital 950 Total $230,750
Show Slide #13: Classifying Assets and Liabilities
Facilitator's Note: Conduct demonstration problem – Classify Assets and Liabilities
Here the Assets are listed in one column and the Liabilities are listed in another. The difference between the two columns is the Simmons’ family’s net worth or financial position. (Facilitate discussion using the slide)
Assets:
House $230,000
Car $6,000
Furniture $3,000
Clothing $750
Cash (Bank + purse) $327.47
Total $240,077.47
Liabilities:
Mortgage $225,000
Credit Card $2,300
Property Tax $2,500
Hospital $950
Total $230,750
Financial Position or Net Worth
$240, $230,750 = $9,327.47
Financial Position or Net Worth =
$240, $230,750 = $9,327.47

14. Graphic Solution Show Slide #14: Graphic Solution
Facilitator's Note: Demonstration problem – Classify Assets and Liabilities. Explain how this graph allows us to visualize the proportion of total assets that are actually “owned” by Gomer & Madge. (Facilitate discussion using the slide)

15. LSA #2 Check on Learning
Q1. Which of the following would be considered a liability: Checking account $327; Credit card account $246; Groceries $50 A1. The Credit Card account is the liability Q2. Assuming these are the only relevant items, what is the financial position? A2. Checking account 327 – credit card account 246 = financial position $81
Show Slide #15: LSA #2 Check on Learning
Facilitator’s Note: Ask check on learning question, facilitate discussion on answer given.
Q1. Which of the following would be considered a liability?
Checking account $327
Credit card account $246
Grocery receipts $50
Q2. Assuming these are the only relevant items, what is the financial position?
A2. Checking account 327 – credit card account 246 = financial position $81

16. LSA #2 Summary
In this activity, we discussed the classification of assets and liabilities, used several examples with formula(s) and a graphic representation.
Show Slide #16: LSA #2 Summary
Facilitator’s Note: In this activity, we discussed the classification of assets and liabilities, used several examples with formula(s) and a graphic representation.

17. Reporting Financial Position
The Statement of Financial Position presents the financial position of a government entity as of a SINGLE DATE.
May also be called:
Balance Sheet (for-profit entity)
Statement of Net Assets (not-for-profit entity)
Statement of Net Worth (individual or family)
Show Slide #17: Reporting Financial Position
3. Learning Step Activity #3 – Reporting Financial Position
Method of Instruction: DSL: Discussion (Small or Large Group)
Instructor to Learner Ratio: 2:25
Time of Instruction:
Media: Slides, Printed Reference Material
Facilitator's Note: The Statement of Financial Position presents the financial position of an entity as of a SINGLE DATE. As such it can be somewhat limited, the very next day the financial position of an entity can change drastically (an earthquake destroys the family home, for example. Or, a rich uncle dies and leaves Gomer a million dollars.) But, the statement of financial position is a standard measure and a should be a truthful picture of the entity’s financial position on the specified date.
The same statement might have a different name depending upon the entity. It may also be called:
Balance Sheet (for-profit entity)
Statement of Net Assets (not-for-profit entity)
Statement of Net Worth (individual or family)
In the federal government, entities where the Liabilities routinely exceed the Assets report a Statement of Net position. The term “net position” indicates that the entity has a negative net worth.
(Facilitate discussion using the slide)

18. Statement of Financial Position
Assets: House $230,000 Car 6,000 Furniture 3,000 Clothing 750 Cash (Bank + purse) Total $240,077.47
Liabilities: Mortgage $225,000 Credit Card 2,300 Property Tax 2,500 Hospital 950 Total Liab. $230,750 Net Worth 9, Total $240,077.47
Show Slide #18: Reporting Financial Position
Facilitator's Note: Here is the Statement of Financial Position for the Simmons’ family as of the current date. Notice that the Total of Assets is equal to the Total of Liabilities and Net Worth. (Facilitate discussion using the slide)
Assets:
House $230,000
Car ,000
Furniture ,000
Clothing
Cash (Bank + purse)
Total $240,077.47
Liabilities:
Mortgage $225,000
Credit Card ,300
Property Tax ,500
Hospital
Total Liab $230,750
Net Worth ,327.47
Total $240,077.47

19. LSA #3 Check on Learning
Q1. What is the name of the report that presents a government organization’s financial position? An individual’s? A1. Statement of Net Assets / Statement of Net Worth Q2. What is the time frame of this report? A2. A single day
Show Slide #19: LSA #3 Check on Learning
Facilitator’s Note: Ask check on learning question, facilitate discussion on answer given.
Q1. What is the name of the report that presents a government organization’s financial position?
A1. Statement of Net Assets
Q2. What is the time frame of this report?
A2. A Single day

20. LSA #3 Summary
During this block, we discussed that the Statement of Financial Position has different names depending on the entity.
Show Slide #20: LSA #3 Summary
Facilitator’s Note: Give overview of LSA.
In this step, we discussed financial reporting, and the different statement names depending on the entity. Another example of a statement was shown to solidify the Assets Vs. Liability process.

21. Practical Exercise Show Slide #21: LSA#3 PE
Facilitator's Note: Ensure Learners follow along with the instruction. Ensures the content is enabled.

22. Financial Position Spreadsheet
Enter data in the white spaces
Show Slide #22: LSA#3 PE
Facilitator's Note: Ensure Learners follow along with the instruction. Ensures the content is enabled.
Practical exercises will use the Financial Position Spreadsheet.
The financial position spreadsheet will help Learners produce a Statement of Financial Position (also called Balance Sheet or Statement of Net Assets.)
The Statement of Financial Position presents financial position of an entity (individual or organization) as of a single date.

23. Financial Position Spreadsheet (Cont.)
Use Tabs to Navigate
Show Slide #23: LSA#3 PE
Facilitator's Note: Ensure Learners follow along with the instruction. Ensures the content is enabled.

24. Financial Position Spreadsheet (Cont.)
Show Slide #24: LSA#3 PE
Facilitator's Note: Ensure Learners follow along with the instruction. Ensures the content is enabled.
The spreadsheet uses the data you entered to produce the Statement of Financial Position and the pie graph

25. Practical Exercise Show Slide #25: LSA#3 PE
Facilitator's Note: Wrap-up. Trouble-Shoot

26. TLO Summary Action: Calculate Financial Position
Condition: FM Leaders in a classroom environment working 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 80% accuracy (70% for international students) you must:
Define / Explain Financial Position
Demonstration problem – Classify Assets and Liabilities
Reporting Financial Position
Show Slide #26: TLO Summary
Facilitator Note: Restate the TLO
Action: Calculate Financial Position
Conditions: FM Leaders in a classroom environment working 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 80% accuracy (70% for international students) you must:
Define / Explain Financial Position
Demonstration problem – Classify Assets and Liabilities
Reporting Financial Position
“Or”
Facilitator's at this time, have one learner from each group to explain the most important take away to them from this lesson. Facilitate a discussion on each answer.