Fundamental Concepts

Question 1

Revenues

Answer 1

What the company earns.

Question 2

Costs / expenses

Answer 2

What the company spends.

Question 3

Assets

Answer 3

What the company owns

Question 4

Liabilities

Answer 4

What the company owes.

Question 5

Receivables

Answer 5

Amount of money owed to us by our clients, but not yet paid.
Revenue recorded in PnL immediately.
But considered as an Asset in the Balance Sheet until ot gets paid.

Question 6

Effects of high receivables level

Answer 6

Very detrimental to the financial health of the company.

Limits the amount of cash available to invest for future growth.

It sits as Assets in the Balance Sheet, hence reducing the ROI.

Question 7

What are the types of revenue?

Answer 7

Service Revenue : generated from services performed to the clients. Transactions documented and tracked by numbered invoices.

Product Revenue : generated from the sale of products to the clients.

Question 8

What are the types of Field Expenses?

Answer 8

Compensation
Materials and Supply
Depreciation
Transportation and Mobilization
Lease and Rent
Office and Camp
Travel and Entertainment
SINET 
Field Segment Management Cost (shared costs of Area Business Managers, GeoMarket Managers, JFE)
Other (QHSE, Facilities, Insurance, Training and recruting…)

Question 9

Field Segment Contribution

Answer 9

Revenue minus the Total Field Cost

Question 10

Interactions between PnL, Balance Sheet and Cash Flow?

Answer 10

Picture