GAINING FINANCIAL INSIGHTS.

I will never forget when I received my admission letter from the Lagos Business School. I was happy. Due to the delays experienced, I was already preparing my mind for the worst news – that I would not be given admission. So, it was a huge relief and a joyous moment for me when I saw that email. 

I had recently completed a master’s programme; however, everyone I talked to about my plans for the MBA at the Lagos Business School gave the same feedback – the programme is rich but demanding. With the brush-up class already on, when I got my letter, I had to psyche myself up, “You are in Martha; you need to give it your best”.

The brush-up sessions were meant to introduce us to the MBA programme and prepare us for the work ahead. I also had the opportunity to meet with some of my colleagues during the programme. It was an exciting experience for me. 

After about a week’s break, school resumed. My MBA journey started. One of the courses we considered during the brush-up was Corporate Financial Accounts. We were back on it at a greater depth. I can already see myself as a manager in a Fortune 500 company (my dream), interpreting financial data and making informed decisions. These are some of the things I have learned about the components of financial statements.

• Financial positioning, also known as the balance sheet. This statement reveals the assets, liability and the owners’ capital of the company as at a particular period of time. The assets must be equal to the addition of the liability and owners’ equity.
• The statement of profit and loss is also called the income statement. This statement shows how profit or loss is derived from revenue and expenses incurred. Profit or loss must be equal to revenue minus the expense.
• The statement of cash flow. This statement gives clarity to how the finance gotten for the business is invested in the assets of the company. These assets contribute to the smooth operation of the business, and profit is made. A portion of the profit made is paid as dividends to the company’s shareholders, and the balance is reinvested back into the company.
• The statement of change in equity. This statement describes the changes in the company’s share capital, the accumulated reserves and the retained earnings over the reporting period.
• Notes to the accounts. This information gives more details to the transactions reported in the financial statements.

The above statements are essential as they provide information to traders on the status of a company’s financial strength and a clear vision of its financial health and value. 

With what we have done so far, I started to think, “This is not as difficult as I thought”. I only really understood how much I had learnt when we were asked to review any recently published financial statement. That was my “ah ha” moment. 

I downloaded a financial institution’s 2022 annual statement, and for the first time in my life, I was not just seeing numbers. Seriously, they were not appearing as raw data as they used to. I could suddenly interpret. Yippee, I yelled. I went through the financial statements one after the other, got a comparison of the present and preceding year for the statement of financial position, read through the notes to the accounts and also went through the directors’ speech. I was delighted. This is making sense, I uttered. I’m sitting tight, eager to see what more corporate financial accounting has for me.

#MMBA5.