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Welcome to Day 2

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Lesson:

Welcome to Day 2

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Course: Finance for Absolute Beginners
Module: Day 2
Lesson Type: Video
Lesson Duration: 2:39

Lesson Content

We are now ready to begin Day 2 of our Lemonade Stand business. Let’s check the weather forecast.

Before we buy supplies, let’s check the weather forecast.

There is a 30% chance of rain. Demand may be 5-10 cups less.

We are at the grocery store. The cost of supplies to make 1 cup of lemonade is $.40.

With the expected weather forecast, we decide to buy supplies for only 20 cups of lemonade. We pay $8 in cash.

How does this impact our financial results?

When we buy supplies and pay cash at the time of purchase and with our assumption of no inventory, one side of the transaction is, cash is decreased. The other side of the transaction is, expenses are increased.

Let’s see how this transaction maps on the financial statements.

This is our income statement and the balance sheet with the numbers from Day 1. Purchasing supplies for $8 is reflected as a negative $8 under cash reflecting decrease in cash and as a positive $8 under expenses reflecting increase in expenses.

Let’s find out the demand for our lemonade on Day 2! How many cups did we sell?

We sold 20 cups of lemonade!

Our price was $1 per cup of lemonade. We sold 20 cups for a total of $20 in cash. How does this impact our financial results?

When we sell lemonade and receive cash at the time of sale and with our assumption of no inventory, one side of the transaction is, cash is increased, the other side of the transaction is, sales are increased.

Let’s see how this transaction maps on the financial statements. Selling $20 worth of lemonade is reflected as $20 increase in cash and $20 increase in sales.

Instructor:

Anna Samorukova

Anna designs and delivers learning and change facilitation experiences that speak to the learner and inspire people and organization reach for potential and create an impact with. She applies engaging,...

Anna's Full Bio

Module 1 0/5

Setting The Foundation

Introduction & Course Overview

What is Business and Financial Acumen?

Welcome to the Lemonade Stand Business

How Does it Work in My Organization?

Key Concept on all Financial Transactions

Module 2 0/2

Day 1

Starting a Lemonade Stand Business

Drivers of Demand

Module 3 0/1

Day 2

Welcome to Day 2

Module 4 0/1

Day 3

Welcome to Day 3

Module 5 0/4

Accounts Receivable, Accounts Payable and Inventory

Module 6 0/1

Interpreting Financial Statements

Summarizing All Financials

Module 7 0/5

Conclusion

Lemonade Stand Grows into a Nationwide Company

How Do HR professionals Impact Performance of Their Organizations?

How Do You in Your HR Role Impact Your Organization?

Course Wrap Up

Quiz

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