Workshop____Financial_analysis361___2006

Workshop____Financial_analysis361___2006 - Financial...

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    Financial Management for  Entrepreneurs II Business Innovation Competition Workshops TL Hill Enterprise Management Consulting Program
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Business plan workshops Idea Creation and Opportunity Assessment - February 2 Matching Products and Services with Markets February 9  Competitive Analysis February 16 February 23 Marketing and Sales Strategies March 2 March 16 Financial Projections and Funding Strategies March 23 Professional Presentations March 30
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Uses: Monitoring performance Analyzing performance  Planning and judging coherence of plans Selling business concepts and performance Financial statements
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Income Statement Definition: Profit or loss of a business over time Cash Flow Statement   Balance Sheet Definition: Snapshot of a firm’s wealth – and how it has funded that wealth so potential Financial statements
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Financial statement analysis Detective game Yields questions, not answers Comparative analysis Trends Industry standards  Critical analysis Garbage in garbage out Documentation Historical or prospective? Meaning
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    Retrospective Financial Statement  Analysis
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Ratio analysis Quality analysis Income Statement analysis Measures of efficiency DuPont analysis Returns on assets and equity “Strategic” ratios Balance Sheet analysis Measures of financial health Permanent working capital Operating cycle  Credit tests Creditworthiness, capital structure, ability to repay
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Numbers don’t lie but they can hide the truth Readable? Standard formats Consistent over time Timely? Well-documented? Narrative Notes Checked and double-checked? Compilation vs review vs audit Reflective of the business? Quality analysis
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Sales growth (decline) [Sales  n+1  – Sales n ]/[Sales n ] = % change in sales Compare to previous years, competitors, industry Control of direct costs COGS/Sales COSS for service companies Stable over time Definition of COGS must be consistent (check) Very sensitive! Small difference can make a big difference
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Workshop____Financial_analysis361___2006 - Financial...

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