The American University in Cairo

Engineering and Science Services

Professional Program in Project Management

PRMG30: Project Budgeting & Financial Control

Course Coordinator: Prof. Dr. A.Samer Ezeldin

Course Instructor: Dr. Eng. A.Salah Awad

Business Goals Business Activities

Profitability Financing Operating

Liquidity Investing

Dr. Eng. Ahmed Salah

Business Decision
Activities Makers

Data Information

Measurement Processing Communication

Accomplished Accomplished Accomplished
by recording by storage by reporting
of data and
preparation of
data

Dr. Eng. Ahmed Salah

 Decision Makers

Management Those with Direct Those with Indirect

Finance Financial Interest Financial Interest
Operations and Investors Tax authorities
Production Creditors Regulators
Marketing Labor unions
Human Customers
Resources
Economic Planners
Information
systems
Accounting

Dr. Eng. Ahmed Salah

 Accounting Equation Terminologies
Assets
Are all resources found in the business that can give a valuable
return to the business.

Liabilities
Are all obligations on the business like creditors, suppliers, and
sub-contractors.

Owners’ Equity
Are the remaining residuals in the business that will return on the
investors and the business owners after paying off all debts.
Dr. Eng. Ahmed Salah
 Types Of Accounts
Assets:-
 Current Assets:-  Fixed Assets:-
 Cash  Land
 Accounts Receivable  Building
 Notes Receivable (Interest Receivable)  Equipment
 Marketable Securities  Furniture
 Material  Vehicles
 Supplies
 Inventory
 Prepaid Accounts
 Prepaid Payment (DP Paid)
 Prepaid Rent
 Prepaid Insurance
**DP: Down Payment
Dr. Eng. Ahmed Salah
 Types Of Accounts
Liabilities:-
 Short-term Liabilities:-  Long-term Liabilities :-
 Accrual (Salaries-Utilities)  Bank Loans
 Accounts Payable  Mortgage
 Notes Payable (Interest Payable)
 Unearned Revenue (DP Received)
 Provisions (Taxes)
 Reserves (Risks)

**DP: Down Payment

Dr. Eng. Ahmed Salah

 Types Of Accounts
Owners’ Equity
 Capital:
 Beginning Capital
 Investment
 Ending Capital
 Revenues:
Is the sales that a company receives from its normal business activities,
and from the services it provides.
 Expenses:
Is the economic costs that a business incurs through its operations to
earn revenue.
 Withdrawals:
Is money withdrew and spent on personal issues not on the business.
Dr. Eng. Ahmed Salah
The Accounting Equation for Corporations:-

Assets = Liabilities + Owners’ Equity (1)

Owners’ Equity = Capital + Revenues – Expenses – Withdrawals

Hence:-
Assets = Liabilities + {Capital + Revenues –
Expenses - Withdrawal} (2)

Dr. Eng. Ahmed Salah

 The Accounting Equation for Corporations:-
Whereas:-
Income = Revenues – Expenses
Taxes=Zero **(Fixed Assumption)
Net Income=Income – Taxes

Then:
Net Income = Income

 Therefore:
Assets= Liabilities+{Capital +/- Net Income – Withdrawal} (3)
**Positive Net Income = Net Profit
**Negative Net Income = Net Loss

Dr. Eng. Ahmed Salah