Reading the accounts
Income statement, balance sheet and cash flow.
Three and a half hours on reading the three statements that matter: whether you lived within your means, what reserves are free, and where cash runs short.
- Level
- Focus
- Learning time
- 3 hours 30 minutes
- Where
- Finance for Non Finance Professionals
- Price
- £69
When you step up to a higher level, what you paid in the last 12 months for lower-level courses inside the bigger course comes off its price, in proportion to how much of each is inside it, whichever topic it's from. Courses at the same or a lower level don't give credit against each other. A Focus course or above always costs at least £15. Read the full terms
Certificate of Completion, or Certificate of Completion and Assessment with a short assessment
Overview and Outcomes.
Who It's For
Councillors, trustees and board members reading accounts without an accounting background
Overview
This Focus gives board members firm footing in the three core financial statements. It starts with responsibility: stewardship of other people's money, the four financial duties, the section 151 officer and section 114 notice, five questions for any financial paper and the Northamptonshire County Council case. It then builds the language of finance, from cash and accruals and the accounting equation to going concern, prudence and depreciation, before reading an income statement through the illustrative Cwm Valley Trust and the FRS 102 and Charities SORP 2026 rules. The final part examines the balance sheet, overlooked liabilities and reserves through the Bryn Care Trust, then cash flow, working capital, a thirteen week forecast and the University of Dundee case from the Gillies Report.
Aims
The aim is to give board members the confidence to read an income statement, balance sheet and cash flow statement for themselves, judge whether reserves are genuinely free, and see a cash squeeze coming in time to act.
In summary, you will be able to:
- Explain the board's stewardship duties for money and use five plain questions to challenge any financial paper with scepticism rather than cynicism.
- Interpret an income statement and balance sheet to judge whether an organisation lived within its means and how much of its reserves is truly free.
- Assess cash flow, working capital and liquidity headroom to spot an approaching cash squeeze before it becomes a crisis.
What you'll develop
Through this Focus course, you will build the ability to:
- Apply five plain questions to any financial paper, testing income security, true cost, risk, cash timing and assumptions with professional scepticism rather than cynicism.
- Apply the concepts of going concern, prudence, materiality and consistency, and the revenue and capital distinction, as questions to put to your finance team.
- Use a structured reading order, from trend and quality of income to exceptional items and adjusted measures, to question a reported surplus or deficit.
- Distinguish endowment, restricted, designated and free reserves in charities, and usable from unusable reserves in councils.
- Assess whether reserves are too little, too much or about right against risk, and set out what a defensible reserves policy should contain.
- Use a thirteen week cash forecast, working capital measures and liquidity headroom to find the low point and test a delayed income scenario.
Built from 2 parts.
3 hours 30 minutes of learning.
- 01Did we live within our means?The language of finance and the income statementBitesize3 modules
- 02Reserves and cashThe balance sheet, reserves and cash flowBitesize2 modules
Keep going.
Part of the Finance for Non Finance Professionals topic, also sold whole as Follow the money.
Go deeper, and pay only the difference
- You are hereFocus, 3 hours 30 minutes, £69
- Next stepExplore, Financial literacy for leaders, 6 hours, £129. Already own the Focus? You pay £60.
- The whole topicImmerse, Follow the money, 11 hours, £249. Already own the Focus? You pay £180.
When you step up to a higher level, what you paid in the last 12 months for lower-level courses inside the bigger course comes off its price, in proportion to how much of each is inside it, whichever topic it's from. Courses at the same or a lower level don't give credit against each other. A Focus course or above always costs at least £15. Prices per person. Read the full terms
Also part of: Governing the money