#NedbankSBS june 2011 thayn n_iemand
-
Upload
thaynniemand -
Category
Economy & Finance
-
view
102 -
download
0
description
Transcript of #NedbankSBS june 2011 thayn n_iemand
What Is What Is What Is What Is
Financial Management?Financial Management?Financial Management?Financial Management?
• Budget Strategy
– Capital
Expenditure
– Operating
Expenditure
– Pricing
• Administration
Strategy
• Sales Strategy
Why The Need ForWhy The Need ForWhy The Need ForWhy The Need For
Financial Management?Financial Management?Financial Management?Financial Management?
Self
OthersFuture
• Compare
• Sacrifice
• Risk
• Viability
• Expansion
• Exit
• Security
• Net Asset Value
• Ability To
Repay
• Credit
Worthiness
How To MonitorHow To MonitorHow To MonitorHow To Monitor
Financial Management?Financial Management?Financial Management?Financial Management?
• Sales Needed To
Break Even
• Pricing
• Gross Profit
• Cash Flow
Projections &
Margin Of Safety
• Net Asset Value
Sales Needed To Break EvenSales Needed To Break EvenSales Needed To Break EvenSales Needed To Break Even
• What is break even
really?
• Service industry
• Product sellers
• How many “billable”
hours?
• How many correctly
priced items?
How To MonitorHow To MonitorHow To MonitorHow To Monitor
Financial Management?Financial Management?Financial Management?Financial Management?
PricingPricingPricingPricing
• Factors determining
your correct hourly
rate?
• Factors determining
the correct price for
your product?
How To MonitorHow To MonitorHow To MonitorHow To Monitor
Financial Management?Financial Management?Financial Management?Financial Management?
GrossGrossGrossGross ProfitProfitProfitProfit
• What can gross profit
tell you?
• Mark-ups and
discounts
How To MonitorHow To MonitorHow To MonitorHow To Monitor
Financial Management?Financial Management?Financial Management?Financial Management?
Net ProfitNet ProfitNet ProfitNet Profit
• What can net profit
tell you?
• Some important ratio
calculations
How To MonitorHow To MonitorHow To MonitorHow To Monitor
Financial Management?Financial Management?Financial Management?Financial Management?
ExampleExampleExampleExample
• Sales (A) 250
• Cost of Sales (B) 195
• Gross Profit (C) 55
• Expenses (D) 30
• Net Profit (E) 25• Are you drawing a salary?
• Debtors (F) 100
• Stock On Hand (G) 20
• Assets (H) 120
• Liabilities (I) 60
�265
�190
�75
�45
�15
�100
�30
�110
�70
Dare To CompareDare To CompareDare To CompareDare To Compare
(2009)(2009)(2009)(2009)
Gross Profit 28% 22%
Net Profit 11% 10%
Mark-Up 39% 28%
Break Even 159 136
Margin Of Safety 67% 83%
Stock Turnover 2.11 2.79
Nett Asset Value 60 60
Liquidity 1.14 1.67
Debtors Cycles 137 146
Creditors Cycles 18 36
Cash Flow Projections & Safety MarginCash Flow Projections & Safety MarginCash Flow Projections & Safety MarginCash Flow Projections & Safety Margin
• Cash Flow?
• I need a CASH FLOOD
to meet my
commitments!
How To MonitorHow To MonitorHow To MonitorHow To Monitor
Financial Management?Financial Management?Financial Management?Financial Management?
Six CriticalSix CriticalSix CriticalSix Critical
Cash Flow ElementsCash Flow ElementsCash Flow ElementsCash Flow Elements
• Budget
• Credit Terms
• Stock Levels
• Financing Options
• Debtors
Management
• Invoicing
Procedures
Net Asset ValueNet Asset ValueNet Asset ValueNet Asset Value
• Sell off everything you own. (Your business may or may not have a value)
• Pay off all you owe.
That Is How Wealthy You Are
Today!
How To MonitorHow To MonitorHow To MonitorHow To Monitor
Financial Management?Financial Management?Financial Management?Financial Management?
Service
Appear-ance
Admin & Finance
All Becomes Nil Without A All Becomes Nil Without A All Becomes Nil Without A All Becomes Nil Without A
Remarkable Attitude To…Remarkable Attitude To…Remarkable Attitude To…Remarkable Attitude To…
Are you and
your staff
“hungry” for
my business
Nuff said!
“Don’t judge a
book by its cover
but a book with a
good cover
deserves a second
glance”
Bill Gibson
And So…And So…And So…And So…
In SummaryIn SummaryIn SummaryIn Summary
Get To Know Your Financial Status
Implement A Financial Management System
Be Serious About All Aspects Of Your Business