09. Deepen Skills with Full Financial Statements
Eliza Helweg-Larsen
Published Date
Choosing a Simulation That Includes Full Financials Builds Real Business Literacy and Financial Confidence
When financial statements are simplified too far—or worse, left incomplete—participants miss the chance to connect the dots between daily decisions and overall company performance. A strong simulation should provide the full story: how cash flow links to profit, how assets and liabilities balance, and how equity reflects long-term value.
Complete Picture: The Benefits of Full Financial Statements
The ability to read financial statements is a fundamental aspect of business acumen. Understanding how these statements are constructed further enhances this skill. When evaluating a business simulation, it’s essential to consider how well it supports the understanding of financial statement structures and purposes.
Key Questions to Ask
- How well does the simulation represent the structure and purpose of financial statements?
- If the balance sheet and profit & loss (P&L) statements are modeled in the game, is there a complete representation, or are some elements missing?
- Is there an easy transition between the simulation representation and the real-world client’s financial statements?
To ensure participants gain the ability to read financial statements, the model used in your business acumen simulation should represent all elements of the balance sheet and P&L. Simulations that use partial financial statements do not support this objective effectively. Instead, a comprehensive model is needed to represent all elements, allowing participants to understand the full picture.
The Income|Outcome game board gives financial statements a physical structure that clarifies the inherent relationships between different financial elements: Sales and Expenses, Assets and Liabilities, and Equity. This physical representation helps participants visualize and understand how financial statements are built and how they function.
Key Points to Consider
- Complete Representation: Ensure the simulation includes all elements of the balance sheet and P&L, providing a full understanding of financial statements.
- Transition to Real Financial Statements: The simulation should facilitate an easy transition from its representation to actual financial statements, ensuring participants can apply what they’ve learned to real-world scenarios.
By using a simulation that offers a complete and accurate representation of financial statements, participants will come away with a strong ability to read and understand these crucial documents. This understanding supports better decision-making and enhances overall business acumen.
The Bottom Line
To build a solid foundation in business acumen, choose simulations that fully represent financial statements. This approach ensures that participants gain a comprehensive understanding of financial structures, enabling them to read and interpret financial data effectively and make informed contributions to business decisions.
 | |
| Avoid: Partial Financial Statements Because… the game will provide an incomplete understanding of the business. | Look For: Full Financial Statements Because… the game builds a complete picture of the needs of the business (e.g., the need to manage for both Cash Flow and Profit). |
Ready to Learn More?
Sign up to receive the full guide to choosing a business acumen simulation and get a free personalized demo!
🎧 Listen to This Topic on the Podcast
Prefer audio? This episode covers the same topic as this article.
