Financial Analysis for Trainee Millionaires Buzz Ventures Ratio Analysis Types of Finance...
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Transcript of Financial Analysis for Trainee Millionaires Buzz Ventures Ratio Analysis Types of Finance...
Financial Analysis for Trainee Millionaires
Buzz Ventures
Ratio AnalysisTypes of Finance
Definitions:http://www.accountrain.com/definitions.html
Financial Statements from SEDARwww.sedar.com/issuers/company_issuers_a_en.htm
Income Statement & Balance Sheet
Income Statement Aka Profit and Loss Account, it has two sections:
Revenue (or Income) and Expenses. Income – Expenses = Profit Profit can be added to the Retained Earnings section
of the Balance Sheet and/or distributed directly to the shareholders as a Dividend payment
Balance Sheet consists of two sections: Assets and Liabilities
A = L Assets can be Fixed or Current Liability can be LT, Current or Equity
Aastra Technologies Limited www.sedar.com/DisplayCompanyDocuments.do?lang=EN&issuerNo=00001712
FISCAL 2011 FINANCIAL HIGHLIGHTS ACHIEVED SALES OF $693.0 MILLION.
CLOSED THE YEAR WITH 55 CONSECUTIVE QUARTERS OF PROFITABILITY.
GENERATED $70.4 MILLION OF CASH FLOW FROM OPERATIONS.
CLOSED THE YEAR WITH $134.1 MILLION IN CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS
Aastra Annual Balance Sheets 2011, 2010, 2009
All Figures $'000 2011 2010 2009
Current Assets $418,620 $424,852 $399,834
(Including Cash of) $129,933 $90,704 $113,596
Fixed Assets $148,905 $167,142 $190,834
Total Assets $567,525 $591,994 $590,668
Current Liabilities $195,787 $235,419 $220,717
Long Term Liabilities
$49,515 $40,000 $66,621
Total Liabilities $245,302 $275,419 $287,338
Equity $94,917 $94,653 $90,488
Retained Earnings $227,306 $221,922 $212,842
Total Equity $322,223 $316,575 $303,330
Aastra Annual Income Statements
Income Statements 2011 2010
Sales $692,994 $716,936
Cost of sales $399,786 $405,926
Overhead Costs $368,807 $375,027
Operating Profit $30,979 $30,899
Corporate Taxes $4,807 $5,511
Profit for Distribution $26,172 $25,388
Worked Examples
Use the spreadsheet Aastra Financials 2011.xls Follow the demonstration of a ratio analysis for
2011 as it is demonstrated. THEN practice by doing the same ratio analysis for
2010.
Ratio Analysis
Useful with comparisons of results for the same company down time.
Very useful when comparing one company with its competitors OR with the industry.
BUT you will need to adjust each set of accounts to use the same accounting assumptions or systems.
Sources of Finance
Angel Investors Friends Family Fools
Early stage to Very early stage investment. Exit Strategy Dorm room to Board Room to an IPO in 7 years.
Venture Capital
Expect 15 times return on investments ON AVERAGE.
Pressure to perform Will take majority shareholding (allows control) Ruthless
Bank Loans
Will almost always ask for a personal guarantee of a business loan.
If the company defaults they may sell your home. High interest charge but no share in the profits Need to see growth in sales income over time.
MicroFinance
Canadian Youth Business Foundation Up to $25,000 loan Low interest rates. Provide mentoring & support Can be matched with a $25,000 loan from BDC.