Nedbank june 2011 thayn n_iemand

transcript

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

OthersFuture

• Compare

• Sacrifice

• Risk

• Viability

• Expansion

• Exit

• Security

• Net Asset Value

• Ability To

• Credit

Worthiness

How To MonitorHow To MonitorHow To MonitorHow To Monitor

• 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?

PricingPricingPricingPricing

• Factors determining

your correct hourly

• Factors determining

the correct price for

your product?

GrossGrossGrossGross ProfitProfitProfitProfit

• What can gross profit

tell you?

• Mark-ups and

discounts

Net ProfitNet ProfitNet ProfitNet Profit

• What can net profit

tell you?

• Some important ratio

calculations

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

�100

�110

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!

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!

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

Nedbank june 2011 thayn n_iemand

Economy & Finance