Business acumen slides

Module One: Getting
Started
Many people believe you are born
with business acumen, which is
loosely defined as the ability to
assess an external market and make
effective decisions. Knowing what is
necessary to navigate and create a
successful business seems innate for
certain people.
Don’t be afraid
to get creative
and experiment
with your
marketing.
Mike Volpe

Workshop Objectives
Develop a
risk
management
strategy
Practice
financial
literacy
Key financial
levers

Module Two: Seeing the
Big Picture
Business acumen requires an
understanding of finance, strategy,
and decision making. Most managers
and employees, however, are
responsible for specific areas, and
they have little understanding of the
impact their decisions have on other
areas.
Details create
the big picture.
Sanford I. Weill

Short and Long Term Interactions
Build
relationships
Use
feedback
Offer value

Recognize Growth Opportunities
Identify market trends:
Actively research customer needs
Pay attention to competitors

Mindfulness of Decisions
Be in the moment
Be Clear
Make a choice

Everything is Related
Be Comprehensive
Be Balanced
Be Incorporated

Case Study
Angela had to decide which direction to take
the company to improve the profit margins
She could invest in employee training or cut labor
She learned that sales dipped when customer service
complaints increased
Her intuition told her that implementing a training
program would increase long term profits

Module Two: Review Questions
1. What is a definition of a short term interaction?
a) An immediate exchange
b)Building a relationship
c) Growth
d)Interest
2. What is essential to growth?
a) Short term interactions
b)Events
c) Long term interactions
d)Financial interest

3. What happens when you do not see the big picture?
a) Opportunities are focused
b)Opportunities are overlooked
c) Nothing
d)Growth is enhanced
4. What will market research provide?
a) Investment opportunities
b)Long term interactions
c) Short term interactions
d)Information on customer needs

5. What do experts in mindful decision making recommend?
a) Meditation
b) Exercise
c) Opportunity
d) Attending events
6. Which of the following should not induce stress?
a) Operational decision
b) Neutral decision
c) Important decision
d) Strategic decision

7. What do most people focus their energy on at work?
a) Big picture
b)Interests
c) Specific roles
d)Company roles
8. What is necessary for being comprehensive?
a) Make adjustments
b)Job descriptions.
c) Training programs.
d)Monitor every aspect

9. What happened when Angela thought about cutting labor?
a) Nothing
b) She became nauseated
c) She was comfortable with the idea
d) She knew it was the right decision
10.What feedback did Angela receive from employees?
a) They were not interested in training
b) The employees were
c) They were interested in training
d) There was none

1. What is a definition of a short term interaction?
a) An immediate exchange
b) Building a relationship
c) Growth
d) Interest
Short term interactions are immediate exchanges. They are singular
events.
2. What is essential to growth?
a) Short term interactions
b) Events
c) Long term interactions
d) Financial interest
Long term interactions are relationships. These are essential to the growth
of a company.

3. What happens when you do not see the big picture?
a) Opportunities are focused
b) Opportunities are overlooked
c) Nothing
d) Growth is enhanced
Growth requires recognizing opportunities. Not seeing the big picture will result in
overlooked opportunities.
4. What will market research provide?
a) Investment opportunities
b) Long term interactions
c) Short term interactions
d) Information on customer needs
Recognizing opportunities for growth requires monitoring customer needs. Market
research will help provide this information.

5. What do experts in mindful decision making recommend?
a) Meditation
b) Exercise
c) Opportunity
d) Attending events
Mindful decision making requires connecting with intuition. Experts
recommend taking up meditation to improve mindful decision making.
6. Which of the following should not induce stress?
a) Operational decision
b) Neutral decision
c) Important decision
d) Strategic decision
It is important to identify the types of decisions that you have to make. A
neutral decision should not be stressful.

7. What do most people focus their energy on at work?
a) Big picture
b) Interests
c) Specific roles
d) Company roles
Most people only focus on their specific roles, without considering how
they affect the other departments. This can distract from the big picture.
8. What is necessary for being comprehensive?
a) Make adjustments
b) Job descriptions.
c) Training programs.
d) Monitor every aspect
It is necessary to be comprehensive when examining how the aspects of
the business are related. This requires monitoring every aspect of the
business.

9. What happened when Angela thought about cutting labor?
a) Nothing
b) She became nauseated
c) She was comfortable with the idea
d) She knew it was the right decision
Angela physically reacted to the decision. She became nauseated with the
idea of cutting labor.
10.What feedback did Angela receive from employees?
a) They were not interested in training
b) The employees were
c) They were interested in training
d) There was none
Angela gathered information to make her decision. She learned that the
employees were interested in training.

Module Three: KPIs (Key
Performance Indicators)
Understanding when goals are
reached is a necessary aspect of
business acumen. Key performance
indicators (KPIs) are metrics that
show when goals are met. Each
company will have a different set of
KPIs, depending on individual
business needs.
The price of
light is less than
the cost of
darkness.
Arthur C.
Nielson

Decisiveness
Define areas to monitor
Identify criteria
Define the measurements

Flexible
Change as goals change
Review and alter
Employee buy in is essential

Strong Initiative
Recognize spots for improvement
Show some confidence
Look for solutions, not problems
Offer to fill in when gaps occur
Learn from mistakes

Being Intuitive
Which
questions
need answers?
Who is
affected?
Actions
needed?

Case Study
Lee needed to increase customer satisfaction
He planned a customer survey initiative to improve
service
The metric established was total complaints to
customer service
Customer complaints to customer service dropped 7%

Module Three: Review Questions
1. What type of goals need to be established?
a) Reasonable
b) SMART
c) New
d) Established
2. Which areas of business need to be monitored?
a) Successful
b) Unsuccessful
c) Successful and unsuccessful
d) None

3. Why needs to change with goals?
a) Nothing
b) Intuition
c) KPIs
d) Interest
4. How should implementation of KPIs be determined?
a) By department
b) As a whole
c) Singularly
d) It does not matter

5. What do KPIs determine about initiatives?
a) They come to work even if they are sick
b) They take a lot of vacation time
c) They are liked by everyone
d) Their success
6. What is an acceptable target based on?
a) Research
b) Goals
c) Objectives
d) Interest

7. How are KPIs created for dashboard?
a) Easily
b) Top down
c) With difficulty
d) Bottom up
8. Who needs to be involved in establishing dashboard KPIs?
a) Management
b) Employees
c) All users
d) Customers

9. What was the initial target?
a) 7%
b) 10%
c) 3%
d) 17%
10.How long did Lee time his objective?
a) One year
b) 6 months
c) 3 months
d) One month

1. What type of goals need to be established?
a) Reasonable
b) SMART
c) New
d) Established
When establishing KPIs, you need clear goals and objectives. The goals need to be
SMART.
2. Which areas of business need to be monitored?
a) Successful
b) Unsuccessful
c) Successful and unsuccessful
d) None
The first step of creating KPIs is determining the areas of business that need to be
monitored. This requires identifying successful and unsuccessful areas that require
monitoring.

3. Why needs to change with goals?
a) Nothing
b) Intuition
c) KPIs
d) Interest
KPIs need to be flexible and change when necessary. They should change
when the goals change.
4. How should implementation of KPIs be determined?
a) By department
b) As a whole
c) Singularly
d) It does not matter
Flexibility should be given when implementing KPIs. The timing should be
left to each department based on specific needs.

5. What do KPIs determine about initiatives?
a) They come to work even if they are sick
b) They take a lot of vacation time
c) They are liked by everyone
d) Their success
KPIs are used to measure results. These help determine the success of an
initiative.
6. What is an acceptable target based on?
a) Research
b) Goals
c) Objectives
d) Interest
Targets are necessary for creating KPIs. These targets need to be based on
research.

7. How are KPIs created for dashboard?
a) Easily
b) Top down
c) With difficulty
d) Bottom up
KPIs are created from the top down or the bottom up. When using a
dashboard, KPIs are created from the top down.
8. Who needs to be involved in establishing dashboard KPIs?
a) Management
b) Employees
c) All users
d) Customers
Dashboard KPIs are focused on operational goals. This requires
interviewing the users.

9. What was the initial target?
a) 7%
b) 10%
c) 3%
d) 17%
Lee created an initial target to improve customer service. The initial target
Lee set was 10%.
10.How long did Lee time his objective?
a) One year
b) 6 months
c) 3 months
d) One month
Lee timed the objective for one month. It was not based on any reliable
data.

Module Four: Risk
Management Strategies
Risk management involves different
strategies. The purpose is to identify
and assess risks and prioritize them
in order to monitor and reduce
threats to the company.
Implementing risk management
requires looking at the big picture in
the future and taking the proper
steps for the good of the
organization.
The first step in
the risk
management
process is to
acknowledge
the reality of the
risk.
Charles
Tremper

Continuous Assessment
Recognize objectives
Identify potential events
Determine the probability and impact of risks
Determine the impact and possibility

Internal and External Factors
Internal
Cash flow
Employees
External
Taxes
Suppliers

Making Adjustments and
Corrections
Constant monitoring
Improve performance
Risks change

Knowing When to Pull the Trigger
or Plug
Not every
program will
succeed
Opportunity
Costs
Selected action -
Alternative decision

Case Study
Kay created a financial risk strategy for her
young company
Her objective was to increase profits
She created a strategy based cash flow and liquidity
After careful monitoring, she realized that the strategy
was unsuccessful

Module Four: Review Questions
1. What determines the type of risk assessment besides the
business need?
a) Risk
b) Objective
c) Opportunity
d) Strength
2. What do risk assessments identify besides risks?
a) Objectives
b) Interest
c) Opportunity
d) Nothing

3. What is an internal financial risk?
a) Interest rate
b) R&D
c) Cash flow
d) Credit
4. A product falls under which type of risk?
a) Internal and external
b) Internal
c) External
d) It is not a risk

5. What do unsuccessful risk management strategies require?
a) Amount of personal photos.
b) Personal information.
c) Amount of personal blogs.
d) Adjustment
6. A change for a competitor alters which of the following?
a) Risk
b) KIP
c) Strategy
d) Action

7. What occurs when you cut a potentially successful project?
a) Nothing
b) Loss in potential profits
c) Saves money
d) Technology skills
8. What is a useful way to measure opportunity cost?
a) Make accurate plans
b) Only use it for financial plans
c) Convert everything to dollar amounts
d) It is not useful

9. What did Kay examine?
a) Nothing
b) Internal factors
c) External factors
d) Internal and external factors
10.What did Kay overlook?
a) Internal factors
b) Cash flow
c) Liquidity
d) Interest rates

1. What determines the type of risk assessment besides the business need?
a) Risk
b) Objective
c) Opportunity
d) Strength
There are different types of risk assessments. The type of risk assessment you use
should be based on the needs of the business as well as the objectives addressed.
2. What do risk assessments identify besides risks?
a) Objectives
b) Interest
c) Opportunity
d) Nothing
Risk assessments obviously assess different risks. They also identify opportunities
or risks that can be transformed into opportunities.

3. What is an internal financial risk?
a) Interest rate
b) R&D
c) Cash flow
d) Credit
Financial risks may be internal or external. Cash flow is an internal
financial risk. Credit and Interest rates are external financial risks.
4. A product falls under which type of risk?
a) Internal and external
b) Internal
c) External
d) It is not a risk
A product is a hazard. It may be both an internal risk and an external risk.

5. What do unsuccessful risk management strategies require?
a) Amount of personal photos.
b) Personal information.
c) Amount of personal blogs.
d) Adjustment
Monitoring and assessment determines which strategies are effective.
Unsuccessful strategies require making an adjustment.
6. A change for a competitor alters which of the following?
a) Risk
b) KIP
c) Strategy
d) Action
Changes in risks need to be monitored closely. A change with a competitor alters
the risk, which requires adjustments to objectives, strategy, and action.

7. What occurs when you cut a potentially successful project?
a) Nothing
b) Loss in potential profits
c) Saves money
d) Technology skills
Allocating resources is an important skill. Cutting a project that could be successful
risks the company profits.
8. What is a useful way to measure opportunity cost?
a) Make accurate plans
b) Only use it for financial plans
c) Convert everything to dollar amounts
d) It is not useful
Opportunity costs are not always clearly financial. The best method for
determining opportunity costs is to convert everything to a dollar amount.

9. What did Kay examine?
a) Nothing
b) Internal factors
c) External factors
d) Internal and external factors
Kay examined cash flow and liquidity. These are internal factors. She
ignored the external factors.
10.What did Kay overlook?
a) Internal factors
b) Cash flow
c) Liquidity
d) Interest rates
Kay overlooked external financial factors. Interest is an external factor that
she overlooked in her assessment.

Module Five: Recognizing
Learning Events
Every day is an opportunity to learn
something new. Individuals with
business acumen are able to recognize
learning events and take advantage of
these opportunities. To be successful,
you must always be learning. As you
gather knowledge, you will find yourself
learning from your mistakes and
improving your decision making
process.
Live as if you
were to die
tomorrow.
Learn as if you
were to live
forever.
Mahatma
Gandhi

Develop a Sense of Always
Learning
• We learn from observing
Imitation
• Practice create learning
experiencesExercise
• Different possible outcomes
Experiment
• Interactions with others
Debate

Evaluate Past Decisions
What was the outcome?
Did it meet expectations?
Would you repeat the same
decision?

Problems Are Learning
Opportunities
Identify the
problem
Previous
solutions
Make a
decision

Recognize Your Blind Spots
Request
Feedback
Reflect Study

Case Study
Craig felt like he was running in circles at
work
He was always putting out fires that came from his
past decisions
The first 2-3 hours of the workday were unproductive
Craig chose to learn from this mistake and alter the
pattern

Module Five: Review Questions
1. Which of the following requires individual initiative?
a) Imitation
b) Exploration
c) Exercise
d) Creation
2. At which point is reflection possible?
a) After a decision
b) During a decision
c) Before a decision
d) Before, during, and after a decision

3. What should you do after each decision?
a) Crunch numbers
b) Determine if it is successful
c) Ask questions
d) Brainstorm
4. Which decisions do you need to evaluate?
a) Successful and unsuccessful
b) Successful
c) Unsuccessful
d) None

5. What must you do to identify opportunities and solutions?
a) Solve the problem
b) Embrace mistakes
c) Consider options
d) Identify problem
6. What occurs when you make a mistake addressing a
problem?
a) You learn what to avoid
b) You learn what is successful
c) You create a new problem
d) Nothing

7. What is necessary for recognizing blind spots?
a) Data
b) Honesty
c) Creativity
d) Learning
8. What is not an example of a blind spot?
a) Fears
b) Annoying habits
c) Persistence
d) Judgmental attitudes

9. How many hours a day did Craig spend putting out fires?
a) 1-2
b) 2-3
c) 3-4
d) 2-4
10.What mistake did Craig keep making?
a) Lack of interest
b) Lack of funding
c) Over confidence
d) Lack of communication

1. Which of the following requires individual initiative?
a) Imitation
b) Exploration
c) Exercise
d) Creation
All of the answers are different ways that we learn. Exploration is
discovery. It requires individual initiative.
2. At which point is reflection possible?
a) After a decision
b) During a decision
c) Before a decision
d) Before, during, and after a decision
Reflection is an opportunity for learning. It can take place, before during,
and after a decision or action.

3. What should you do after each decision?
a) Crunch numbers
b) Determine if it is successful
c) Ask questions
d) Brainstorm
You need to evaluate each decision. This requires you to ask a few questions about
the decision.
4. Which decisions do you need to evaluate?
a) Successful and unsuccessful
b) Successful
c) Unsuccessful
d) None
All decisions provide learning opportunities. You need to evaluate your successful
decisions as well as your unsuccessful decisions, which allow you to learn from
your mistakes and victories.

5. What must you do to identify opportunities and solutions?
a) Solve the problem
b) Embrace mistakes
c) Consider options
d) Identify problem
You need to identify learning opportunities and solutions. However, this
first requires identifying the problem.
6. What occurs when you make a mistake addressing a problem?
a) You learn what to avoid
b) You learn what is successful
c) You create a new problem
d) Nothing
Mistakes will be made when addressing problems. These mistakes,
however, teach you what actions to avoid in the future.

7. What is necessary for recognizing blind spots?
a) Data
b) Honesty
c) Creativity
d) Learning
Blind spots are hidden from us. In order to identify them, we need to be
honest with ourselves and accept honesty from others.
8. What is not an example of a blind spot?
a) Fears
b) Annoying habits
c) Persistence
d) Judgmental attitudes
Blind spots are hidden aspects of personality that can have negative
consequences. Persistence is not a blind spot, but the other answers are.

9. How many hours a day did Craig spend putting out fires?
a) 1-2
b) 2-3
c) 3-4
d) 2-4
Craig spent the first few hours of each day handling problems. They
averaged to 2-3 hours each morning.
10.What mistake did Craig keep making?
a) Lack of interest
b) Lack of funding
c) Over confidence
d) Lack of communication
Craig finally examined his past decisions and actions. He discovered a lack
of communication lead to repeated mistakes.

Module Six: You Need to Know
These Answers and More
Running a business is a complex
enterprise. In order to look at the big
picture in your business, you need to
know the answers to some basic
financial questions. It is not enough for
your accountant to know this
information. Business acumen requires
you to be aware of these answers so
that you will be able to guide your
company to success.
Without
knowledge
action is useless
and knowledge
without action
is futile.
Abu Bakr

What Makes My Company Money?
Examine
your
products
Services
Influence
the
future

What Were Sales Last Year?
Identify growth
Essential information
Current status of company

What is Our Profit Margin?
How well is the
company running?
13% net profit margin
Gross and net

What Were Our Costs?
COGS
Operating
expenses
Interest
and other
Taxes
Costs

Case Study
Shelly’s company profit margin of 7%, was
2% lower than last year
She decided to improve her finances by cutting costs
She cut labor in half
Customers complained about longer wait times

Module Six: Review Questions
1. What must you examine to determine how your company is making
money?
a) Products
b) Products and services
c) Services
d) Cash flow
2. Which product made the most money in the example?
a) Cookie
b) Cake
c) Croissant
d) Cupcake

3. What is the difference between last year’s sales and this year’s
sales?
a) Rate of change
b) The last step in the rate of change
c) First step in the rate of change
d) The second step in the rate of change
4. What do you divide the increase or decrease to determine the rate
of change?
a) Last year’s sales
b) Current sales
c) Total sales
d) You do not divide

5. What is the average net profit margin for a large company?
a) 12%
b) 33%
c) 10%
d) 13%
6. Gross profit margin does not include which of the following?
a) Operating cost and taxes
b) Taxes
c) Operating costs
d) Revenue

7. How do many companies attempt to increase profits?
a) Increase costs
b) Cut costs
c) Avoid taxes
d) Improve operating costs
8. What must stay below the sale price?
a) Interest
b) Operating Expense
c) COGS
d) Taxes

9. What was the profit margin the previous year?
a) 7%
b) 9%
c) 2%
d) 11%
10.What happened to the profit margin after Shelly implemented
changes?
a) It dropped 2%
b) It increased 2%
c) It fell 7%
d) It remained the same

1. What must you examine to determine how your company is making money?
a) Products
b) Products and services
c) Services
d) Cash flow
You make money by selling your products and services. They need to be examined
to determine which ones are making money.
2. Which product made the most money in the example?
a) Cookie
b) Cake
c) Croissant
d) Cupcake
The croissants make up 80% of the bakery’s sales. This product makes the
company the most money.

3. What is the difference between last year’s sales and this year’s sales?
a) Rate of change
b) The last step in the rate of change
c) First step in the rate of change
d) The second step in the rate of change
You need to compare sales for two years in the rate of change. The first step is to
determine the difference between the sales.
4. What do you divide the increase or decrease to determine the rate of change?
a) Last year’s sales
b) Current sales
c) Total sales
d) You do not divide
The rate is determined using last year’s sales. This is what you divide into the
increase or decrease.

5. What is the average net profit margin for a large company?
a) 12%
b) 33%
c) 10%
d) 13%
Profit margin shows you how well the business is running. The average net profit
margin for a large organization is 13%.
6. Gross profit margin does not include which of the following?
a) Operating cost and taxes
b) Taxes
c) Operating costs
d) Revenue
You can determine gross and net profit margins. Gross profit margins to not
include operating costs and taxes when establishing the amount of profit.

7. How do many companies attempt to increase profits?
a) Increase costs
b) Cut costs
c) Avoid taxes
d) Improve operating costs
Many companies cut costs to improve profits. This strategy, however, will backfire
when customers are affected by the cuts.
8. What must stay below the sale price?
a) Interest
b) Operating Expense
c) COGS
d) Taxes
Costs of goods sold must stay below the sale price. Going above the sale price will
affect profits.

9. What was the profit margin the previous year?
a) 7%
b) 9%
c) 2%
d) 11%
The profit margin was down 2%. It is 7%, making the previous profit margin 7%.
10. What happened to the profit margin after Shelly implemented changes?
a) It dropped 2%
b) It increased 2%
c) It fell 7%
d) It remained the same
Shelly’s decision decreased vendor costs, but increased hiring costs. The profit
margin remained unchanged.

Module Seven: Financial
Literacy (I)
Financial literacy is essential to business
acumen. In order to see the big picture,
you have to understand every aspect of
the company’s finances. Fortunately,
anyone can improve financial literacy
with some basic instruction and
practice. This module and the next will
provide you with information to
improve your understanding of financial
literacy.
To succeed, you
will soon learn,
as I did, the
importance of a
solid foundation
in the basics of
education –
literacy both
verbal and
numerical, and
communication
skills.
Alan
Greenspan

Assets
Anything of value
Creates a profit
Use cash to invest in other assets

Financial Ratios
ROA • Net income/Total assets x 10
Inventory
turnover
• Cost of Goods Sold/
Inventories
Revenue
sales
growth
• This year’s revenue/ last year’s
revenue -1 x 100

Liabilities
Money
owed
Debt
Financial
health
Short or
long term

Equity
Assets Liabilities Equity

Case Study
Tim is considering a small business loan to
purchase some new equipment
He estimates that the equipment will improve
productivity by 10%
Liquid assets are$100,000. Liabilities are $85,000
The loan amount that he applies for is $25,000

Module Seven: Review Questions
1. What do assets determine?
a) Profits
b) Company strength
c) Interest
d) Cash flow
2. What is the most important asset a company has besides
customers?
a) Cash
b) Buildings
c) Employees
d) Machinery

3. Where do you find the information to create financial ratios?
a) Balance statement
b) Interest earnings
c) Financial statement
d) Income statement
4. Besides the inventory, what is necessary for an inventory ratio?
a) Cost of goods sold
b) Total revenue
c) Net income
d) Total assets

5. What indicates that the company is in trouble?
a) Nothing
b) Assets are greater than liabilities
c) There are no liabilities.
d) Liabilities are greater than assets
6. What will be paid within a year?
a) Short term liabilities
b) Assets
c) Long term liabilities
d) Equity

7. Which action will increase equity?
a) Remove stock options
b) Issue stock
c) Increase inventory
d) Stop marketing
8. What is used to determine equity besides liabilities?
a) Ratios
b) Liquidity
c) Assets
d) Income

9. What are Tim’s assets?
a) $25,000
b) $100,000
c) $85,000
d) $15,000
10. What is Tim’s equity?
a) $25,000
b) $100,000
c) $85,000
d) $15,000

1. What do assets determine?
a) Profits
b) Company strength
c) Interest
d) Cash flow
Company strength is determined by its assets. Liquid assets prepare the
company for times of trouble. Utilized assets increase productivity.
2. What is the most important asset a company has besides customers?
a) Cash
b) Buildings
c) Employees
d) Machinery
Not every asset appears on the balance sheet. Employees and customers
are considered to be the greatest assets a company can have.

3. Where do you find the information to create financial ratios?
a) Balance statement
b) Interest earnings
c) Financial statement
d) Income statement
Financial statements include the different elements of finance. The information on
a financial statement is used to create financial ratios.
4. Besides the inventory, what is necessary for an inventory ratio?
a) Cost of goods sold
b) Total revenue
c) Net income
d) Total assets
All of the answers are found on the financial statement. The cost of goods sold is
necessary for an inventory ratio.

5. What indicates that the company is in trouble?
a) Nothing
b) Assets are greater than liabilities
c) There are no liabilities.
d) Liabilities are greater than assets
Liabilities and assets work together to determine the health of an
organization. When liabilities are greater, the company has too much debt.
6. What will be paid within a year?
a) Short term liabilities
b) Assets
c) Long term liabilities
d) Equity
Liabilities are financial debts. Short term liabilities are typically paid within
a year.

7. Which action will increase equity?
a) Remove stock options
b) Issue stock
c) Increase inventory
d) Stop marketing
Stocks and equity are tied together. Issuing stocks will actually increase
equity in the company.
8. What is used to determine equity besides liabilities?
a) Ratios
b) Liquidity
c) Assets
d) Income
Assets and liabilities are used to determine equity. Equity = Assets –
liabilities.

9. What are Tim’s assets?
a) $25,000
b) $100,000
c) $85,000
d) $15,000
Tim’s liquid assets equal $100,000. His liabilities equal $85,000.
10. What is Tim’s equity?
a) $25,000
b) $100,000
c) $85,000
d) $15,000
Tim’s liquid assets equal $100,000. His liabilities equal $85,000. This
makes his equity $15,000.

Module Eight: Financial
Literacy (II)
Financial literacy requires you to read
and understand different reports
such as the income statement,
balance sheet, and cash flow
statement. These internal reports
along with external information that
you gather, will help you lead a
financially stable business.
Knowledge is
the
fundamental
factor – the
major enabler –
of enterprise
performance.
Karl M. Wiig

Income Statement
Revenue COGS
Gross
profit
Operating
expenses
Net
income
EPS

Balance Sheet
Current assets
Total assets
Current liabilities
Total liabilities
Stockholders’ equity

Cash Flow Statement
Cash generated
How it is used
Operating, investing, and
financing expenses

Read, Read, and Read
Periodicals
Trade publications
Blogs

Case Study
Brie prepared her balance sheet at the end
of the quarter
She had $10,000 in equity and considered it healthy
She did not compare it to previous statements
Brie realized that her equity had been falling. It was
currently $8,500.

Module Eight: Review Questions
1. What is another name for an income statement?
a) Balance sheet
b) Profit and loss statement
c) Cash flow statement
d) There is no other name
2. How often do you typically update an income statement?
a) Monthly
b) Semi-annually
c) Quarterly
d) Weekly

3. What does a balance sheet determine?
a) Profits
b) Cash flow
c) Financial health
d) Loss
4. How many past balance sheet statements should be in a report?
a) 2
b) 0
c) 1
d) 3

5. How many past cash flow statements should appear with the
current statement?
a) 2
b) 0
c) 1
d) 3
6. What begins the cash flow statement?
a) Net income
b) Gross income
c) Cash equivalent
d) Balance sheet

7. What is the benefit of trade publications?
a) They are timeless
b) They are current
c) They are frequent
d) They entertaining
8. What is the purpose of studying financial literacy?
a) Understand income
b) Determine profits and loss
c) Integrate it into the financial strategy
d) Understand cash flow

9. What was Brie’s equity at first?
a) $2,500
b) $10,000
c) $1,500
d) $8,500
10.How many balance sheets showed a trend?
a) 1
b) 4
c) 2
d) 3

1. What is another name for an income statement?
a) Balance sheet
b) Profit and loss statement
c) Cash flow statement
d) There is no other name
Income statements show income over a time period. It is also referred to as a
profit and loss statement.
2. How often do you typically update an income statement?
a) Monthly
b) Semi-annually
c) Quarterly
d) Weekly
Income statements are typically updated quarterly. They may be updated yearly
for smaller organizations.

3. What does a balance sheet determine?
a) Profits
b) Cash flow
c) Financial health
d) Loss
A balance sheet shows the financial health of an organization. It includes the
assets, liabilities, and equity.
4. How many past balance sheet statements should be in a report?
a) 2
b) 0
c) 1
d) 3
A balance sheet needs to include to past statements. This will show the
progression of the company.

5. How many past cash flow statements should appear with the current statement?
a) 2
b) 0
c) 1
d) 3
Cash flow statements should include past statements. They need to require 3 past
statements.
6. What begins the cash flow statement?
a) Net income
b) Gross income
c) Cash equivalent
d) Balance sheet
Cash flow statements begin with the net income from an income statement. They
end with the cash equivalent.

7. What is the benefit of trade publications?
a) They are timeless
b) They are current
c) They are frequent
d) They entertaining
Periodicals and trade publications are useful sources of information. They are
typically current.
8. What is the purpose of studying financial literacy?
a) Understand income
b) Determine profits and loss
c) Integrate it into the financial strategy
d) Understand cash flow
Financial literacy finds information. This is incorporated into the financial strategy.

9. What was Brie’s equity at first?
a) $2,500
b) $10,000
c) $1,500
d) $8,500
When Brie prepared her balance sheet, she had equity of $10,000. She
believed it was healthy.
10.How many balance sheets showed a trend?
a) 1
b) 4
c) 2
d) 3
The accountant showed the current balance sheet along with the two
previous. This is a total of three different statements.

Module Nine: Business
Acumen in Management
Business acumen requires careful
cultivation of resources, specifically
one of the most important resources,
employees. Managing people is a
complex process, but developing
your management skills will help you
become an effective manager who
achieves significant results.
Good managing
consists of
showing
average people
how to do the
work of
superior people.
John D.
Rockefeller

Talent Management
Mentor Invest
Communicate Evaluate

Change Management
Prepare
Define
Sponsor
Manage
Plan
Act
Reinforce
Analyze
Praise

Asset Management
Involve the departments
Create a list
Identify assets to manage
Develop a plan

Organizational Management
Unique to each company
Requires planning
Structured
Linked together

Case Study
Angela decided to update the IT system for
her company
She was sure that her employees would be thrilled
No one seemed excited, and some employees vocally
complained
One month after the change was made, productivity
dropped by 7%

Module Nine: Review Questions
1. What does investing in employees accomplish?
a) Nothing
b) They feel valued
c) They feel undervalued
d) They leave quickly
2. What is the product of a successful talent management program?
a) Improved culture
b) Decreased productivity
c) Increase productivity
d) Increased hiring

3. What do surveys accomplish?
a) Allow people to vent
b) Implement change
c) Analyze change
d) Identify resistance
4. What occurs in every phase of the change management process?
a) Communication
b) Action
c) Analysis
d) Planning

5. What will make an asset management plan easier?
a) Financial statements
b) Staffing
c) Practice
d) Software
6. Who is responsible for individual assets?
a) Departments
b) CEO
c) Manager
d) Everyone

7. What will determine if a company has a district manager?
a) Organizational management
b) Organizational structure
c) Asset management
d) P&L
8. How do you begin a plan for organizational management?
a) Specific
b) On an individual level
c) Broadly
d) You do not

9. How did employees initially react?
a) They were excited
b) They complained
c) They supported the decision
d) It is not clear
10.What occurred one month after the changes?
a) It is not clear
b) Productivity increased 7%
c) Productivity remained the same
d) Productivity dropped 7%

1. What does investing in employees accomplish?
a) Nothing
b) They feel valued
c) They feel undervalued
d) They leave quickly
Investing in employees shows them that they are valued. This should decrease
turn over and improve retention.
2. What is the product of a successful talent management program?
a) Improved culture
b) Decreased productivity
c) Increase productivity
d) Increased hiring
Talent management develops employee skills. This helps increase productivity.

3. What do surveys accomplish?
a) Allow people to vent
b) Implement change
c) Analyze change
d) Identify resistance
Surveys and feedback help analyze change. This is essential to the success of
change management.
4. What occurs in every phase of the change management process?
a) Communication
b) Action
c) Analysis
d) Planning
Communication needs to occur in all three phases of the process. This prevents
confusion during the change.

5. What will make an asset management plan easier?
a) Financial statements
b) Staffing
c) Practice
d) Software
You must create lists for an organizational management plan. There is software
that makes the process easier.
6. Who is responsible for individual assets?
a) Departments
b) CEO
c) Manager
d) Everyone
Different assets belong to different departments. Each department is responsible
for caring for its own assets.

7. What will determine if a company has a district manager?
a) Organizational management
b) Organizational structure
c) Asset management
d) P&L
The organizational structure is the breakdown of positions. Organizational
management involves organizational structure in the planning process.
8. How do you begin a plan for organizational management?
a) Specific
b) On an individual level
c) Broadly
d) You do not
Organizational management involves planning. The planning begins at a broad,
holistic level. It then moves down to the employee level.

9. How did employees initially react?
a) They were excited
b) They complained
c) They supported the decision
d) It is not clear
The employees did not react to the news well. The vocal employees
complained about the change being implemented.
10.What occurred one month after the changes?
a) It is not clear
b) Productivity increased 7%
c) Productivity remained the same
d) Productivity dropped 7%
Angela hoped the changes would increase productivity. A month after the
change, productivity decreased by 7%.

Module Ten: Critical
Thinking in Business
In business, you are constantly
bombarded with information. You
rely on this information to make
important decisions. Business
acumen requires that you do more
than absorb information. You need to
think critically to about information
and make your decisions accordingly.
The essence of
the independent
mind lies not in
what it thinks
but how it
thinks.
Christopher
Hitchens

Ask the Right Questions
Identify assumptions
Explore perspectives
Examine evidence
Consider different implications

Organize Data
Makes it
easier
See trends
emerge
Group
similar data

Evaluate the Information
Evaluate before deciding
Is it facts or opinion?
Is there bias?

Make the Decision
The effects of your
decision
Options
Your feelings

Case Study
Doug was considering joining forces with a
startup
The preliminary data and financial statements were
positive
One day he read a negative exposé
He decided that he would not go through with the
business deal.

Module Ten: Review Questions
1. How often should you question information?
a) Once
b) Continually
c) Daily
d) Weekly
2. Why ask questions?
a) Learn more information
b) To be annoying
c) Identify useful information
d) Find new ideas

3. What will organizing data help you find?
a) Information
b) Decisions
c) Trends
d) Groups
4. What makes data analysis easier?
a) Conclusion
b) Data
c) Trends
d) Organization

5. What will the right questions identify?
a) Interest
b) Decisions
c) Timing
d) Opinions
6. You need to evaluate the information for signs of _______.
a) Bias
b) Opinion
c) Interest
d) Conclusions

7. What do you Not need to think about when considering the effect
of your decision?
a) Yourself
b) Other companies
c) Company
d) Others
8. What do you need to consider after making a complete evaluation?
a) Wait
b) Reevaluate
c) Act
d) Nothing

9. Who is the source of the negative information?
a) Doug
b) Competitor
c) Business partner
d) Uncertain
10.What is a source or positive information?
a) Business partner
b) Competition
c) Agreement
d) Financial statement

1. How often should you question information?
a) Once
b) Continually
c) Daily
d) Weekly
It is important to question all information. You must do so continually to
think critically.
2. Why ask questions?
a) Learn more information
b) To be annoying
c) Identify useful information
d) Find new ideas
Questions weed through information. They identify useful information
from useless information.

3. What will organizing data help you find?
a) Information
b) Decisions
c) Trends
d) Groups
Organization is part of data analysis. When data is organized, you identify
trends, which help you reach conclusions.
4. What makes data analysis easier?
a) Conclusion
b) Data
c) Trends
d) Organization
Organization groups data together. This makes data analysis easier
because trends are apparent.

5. What will the right questions identify?
a) Interest
b) Decisions
c) Timing
d) Opinions
When evaluating information, you need to separate fact from opinion. The
right questions will help identify opinions.
6. You need to evaluate the information for signs of _______.
a) Bias
b) Opinion
c) Interest
d) Conclusions
Information and conclusions are at risk of bias. It is important to evaluate
the information and conclusions for signs of bias.

7. What do you Not need to think about when considering the effect of your
decision?
a) Yourself
b) Other companies
c) Company
d) Others
You need to consider the effects of your decision. Consider how it will affect you,
the company, and others.
8. What do you need to consider after making a complete evaluation?
a) Wait
b) Reevaluate
c) Act
d) Nothing
Once you have evaluated everything necessary to make your decision, you need to
act. You have already considered all the options; so do not wait.

9. Who is the source of the negative information?
a) Doug
b) Competitor
c) Business partner
d) Uncertain
The negative information came from a competitor. Doug did not evaluate
it.
10.What is a source or positive information?
a) Business partner
b) Competition
c) Agreement
d) Financial statement
The financial statement encouraged Doug. It is not clear if he evaluated
the statement.

Module Eleven: Key
Financial Levers
There are key financial levers that
drive any business. These financial
levers may be overlooked, but you do
so to the detriment of the business.
Identifying the levers is the first step
to addressing them correctly. Once
you understand these key levers, you
will increase your business acumen.
Many small
businesses
would rather
face an angry
barbarian
horde than
tackle their cash
flow statement
or price a new
product.
Nicole Fende

Investing in People
Employees
Training
Salary
Customers
Products
Experience

Effective Communication
Honest Clear
Polite Friendly

Process Improvement
Identify
Measure
Support
Implement

Goal Alignment
All employees
Individuals and teams
Cascade down from the top

Case Study
The board of directors of Market Chain
approved a plan to decrease labor
The company initially saved $5 million
After six months, however, turnover increased and
sales began to fall
Turnover cost the company $3 million, and the
estimated sales loss was also $3 million

Module Eleven: Review Questions
1. What is your greatest asset?
a) Cash
b) People
c) Property
d) Stock
2. What do you risk by not investing in employees?
a) Decreased productivity
b) Increased productivity
c) Loss of employee
d) Retained employees

3. How do you begin effective communication?
a) Questions
b) Answers
c) Listening
d) Tone
4. Communication should always be clear and ______.
a) Concise
b) Rambling
c) Dull
d) Fun

5. What is the last step of process improvement?
a) Implement
b) Revise
c) Identify
d) Evaluate
6. What is the first step of process improvement?
a) Identify
b) Evaluate
c) Implement
d) Revise

7. Which goals begin at the top and work their way down?
a) Aligned
b) Cascading
c) SMART
d) None
8. What is not included in a SMART goal?
a) Measurable
b) Specific
c) Attitude
d) Timely

9. How much did the company save?
a) $2 million
b) $5 million
c) $3 million
d) $6 million
10.How much did the company lose over 6 months?
a) $2 million
b) $5 million
c) $3 million
d) $6 million

1. What is your greatest asset?
a) Cash
b) People
c) Property
d) Stock
People are the greatest asset of your company. The people who are company
assets are customers and employees.
2. What do you risk by not investing in employees?
a) Decreased productivity
b) Increased productivity
c) Loss of employee
d) Retained employees
Employers should invest in their people. Not investing in your employees means
that you risk losing them.

3. How do you begin effective communication?
a) Questions
b) Answers
c) Listening
d) Tone
Communication begins with listening. Active listening is necessary for
active communication.
4. Communication should always be clear and ______.
a) Concise
b) Rambling
c) Dull
d) Fun
How you communicate will determine its effectiveness. The
communication need to be both clear and concise.

5. What is the last step of process improvement?
a) Implement
b) Revise
c) Identify
d) Evaluate
All of the answers are steps to process improvement. The last step is to
evaluate the process’ success.
6. What is the first step of process improvement?
a) Identify
b) Evaluate
c) Implement
d) Revise
All of the answers are steps to process improvement. The first step is to
identify processes and changes.

7. Which goals begin at the top and work their way down?
a) Aligned
b) Cascading
c) SMART
d) None
Cascading goals begin at the top of the organization. They cascade down
to the lower positions of the company.
8. What is not included in a SMART goal?
a) Measurable
b) Specific
c) Attitude
d) Timely
SMART goals are specific, measurable, attainable, relevant, and timely.
Attitude is not included in SMART goals.

9. How much did the company save?
a) $2 million
b) $5 million
c) $3 million
d) $6 million
The company cut investments in customers and employees. The company saved $5
million initially.
10. How much did the company lose over 6 months?
a) $2 million
b) $5 million
c) $3 million
d) $6 million
The company lost $3 million from each cut. This is a total of $6 million.

Module Twelve:
Wrapping Up
Although this workshop is coming to a
close, we hope that your journey to
improve your Business Acumen skills is
just beginning.
Please take a moment to review and
update your action plan. This will be a
key tool to guide your progress in the
days, weeks, months, and years to
come.
We wish you the best of luck on the rest
of your travels!
There’s no such
thing as
knowledge
management;
there are only
knowledgeable
people.
Peter Drucker

Words from the Wise
Sven Goran
Eriksson
• The greatest barrier to success is the
fear of failure.
Isaac
Mophatlane
• If you did not look after today’s
business then you might as well forget
about tomorrow.
William
Edwards
Deming
• If you do not know how to ask the
right question, you discover nothing.

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