(2.1) Learning Goals

Module Goals

After completing Module 2, you will be able to:

1. Explain the bank’s fiduciary responsibility to depositors
2. Explain the entrepreneur’s role in monitoring small business profits
3. Explain why a small business must be profitable
4. Understand the difference between a personal entity and business entity
5. Explain why managing working capital is an essential daily activity
6. Explain FICO Scores and their impact on business loans
7. Understand the relationship between the three basic financial documents
8. Understand the purpose of a 1040 Federal Tax Return
9. Explain the components and purpose of the balance sheet
10. Diagram the effects of the nine transactions impacting the balance sheet
11. Explain the components and purpose of the income statement (P&L)
12. Demonstrate how to monitor revenues and expenses using the income statement (P&L)
13. Explain the impact of accounts receivable, inventory, and accounts payable on P&L
14. Demonstrate how to monitor expense data from P&L data that impacts the ‘bottom line’
15. Show how sales and expenses are reported on Schedule C (Form 1040)
16. Understand the relationship between 1040 Federal Tax Return and a Schedule C (Form 1040)
17. Explain the components and purpose of the cash flow statement
18. Illustrate how cash flow statements are used to manage revenues (sales) and expenses
19. Demonstrate how a cash flow statement is used to forecast business expansion
20. Explain the impact of accounts receivable, accounts payable, and inventory on the Cash Flow Statement