Sequel to my last article on ‘’putting it all together at Lagos business school’’, I have learned and have started implementing what I have so far from corporate financial accounting at my workplace and my little business.
Remember I had told you I hated business studies, now, accounting as a child. But now, I feel the impulse of asking myself this question. ‘’Do I hate accounting or am I being mislead by own perceptions?
I learned that that there are different types of accounting, but our focus for now at Lagos Business School is on corporate financial accounting.
Corporate financial accounting usually involves the company’s financial statement, analysis and their interpretation. Primary users of this information as I have come to understand are the ‘’investors’’ according to our faculty in the person of ‘’Prof. Akintola Owolabi’’. I learned that there are different components of a good financial statement. These are
- Statements of financial position,
- Statements of profit or loss
- Statement of Cash flow
- Statement of change in equity
- Notes to financial statement / accounts which Prof has noted as a plus one to help us further.
Right then in class I understood the reason my business proposal was turned down by my potential investor. I honestly do not have the funds but according to my investor, my business idea was a fantastic one and for the bare fact that the business has been in a piloting stage for over a year; He would need a financial report to help him decide. I further as at then, consulted an accountant as I thought to help me out. He did help, but my report still got turned down by my potential investor and I do not even know why. At that moment I just concluded that he doesn’t want to invest.
To my later understanding now at LBS, I now know that some components of a good financial report was missing from what I had handed over to my potential investor as I only had the statement of profit or loss on the report. Are you kidding me!? Even I would have turned down such proposal (laughs; at ignorance of course). There are a lot to learn and unlearn at LBS. The ability to do this, is what makes a great leader.
APPLICATION OF COPORATE FINANCIAL ACCONTING
What makes me a an MBA student is not what I know but my ability to impact that which I know. Prof. Akintola Owolabi went on further to explain how these components of financial reports works and what makes them. I started putting together all my little company’s financial reports bearing in mind what I have learnt so far. I equally, at my workplace, requested for the company’s financial reports and found out that some components of it were missing and some statement wasn’t alright because some part of it wasn’t captured. So one cant actually say at what percent the company has grown from the previous year. I am now working with our accountant to get all those in place.
So, I ask myself again; do I really hate accounting? or was I mislead by my perception that so many illiterate business men were successful regardless.