How to Understand Business Finance, Second Edition_9 ppt

... to enough savings in dollars of overtime to pay for the small- run copier in nine months and still pay the salary and benefits of the clerk. Performance Measurement Systems CHAPTER 6 201 p03.qxd ... a continuous basis. This information may be plotted on a daily basis to accumulate historical information that could be used for planning, control, and budgeting. Often this information...

Ngày tải lên: 20/06/2014, 18:20

... outstanding costs 34 How to Understand Business Finance We start by adding up the assets of the business. There is £3,000 cash, £30,000 owed to us by customers, and no stock. This gives us total current ... goes on ‘customers 60 days’ according to the terms of the contract, as shown in Figure 2.15. 26 How to Understand Business Finance cash to pay for the equipment a...

Ngày tải lên: 20/06/2014, 20:20

... they have to do is have the stock manufactured to the 62 How to Understand Business Finance business it may be possible to go back to the owners and ask for more money (ie appeal to relatives). ... requirement will fi t into: a) Working Capital; that is to fi nance stock/raw material purchases or to provide the fi nance to allow customers to take extended credit...

Ngày tải lên: 20/06/2014, 20:20

... THIS PAGE IS INTENTIONALLY LEFT BLANK 98 How to Understand Business Finance Sales multiplier The sales multiplier uses a multiple of sales to assign a value to that company. This could be less than ... t multiplier, the multiplier used tends to be greater than 1 and will be based on how many years’ future profi t are to be factored into the value of a business as well a...

Ngày tải lên: 20/06/2014, 20:20

... be invested into, making a return for you. So, if we had £100 to invest today at a return of 30 per cent, Table 12.1 shows how we might expect it to grow in value if we continued to reinvest ... today’s money. 126 How to Understand Business Finance Or, if your prices come under pressure from competitors, how low can you let them go, and still make the profi t you want to...

Ngày tải lên: 20/06/2014, 20:20

... material stock and work in progress, as all their stock is now in fi nished goods. Debtors ‘Debtors’ refers to the amount of money owed to us by our customers. This is directly related to how long ... and used to carry on its business. Buildings and machines are usually fi xed assets, though not to the companies that make them. 148 How to Understand Business Finance mone...

Ngày tải lên: 20/06/2014, 20:20

... 152 How to Understand Business Finance It is only worth borrowing to expand a business if the internal return on investment (ORA or RONA) is expected to be signifi cantly higher ... costing inventory. See also FIFO. 158 How to Understand Business Finance payables’ days (US) See creditors’ days (UK). payback period The time needed for cash infl ows for a project to exc...

Ngày tải lên: 20/06/2014, 20:20

... much the same way. We will call it the business cycle. They produce and deliver a product or service, they invoice the customer, they pay their bills, they get paid by their customers, and they ... t, shown in Table 2.5. We have seen that cash and profi t are not the same, but do they change at the same time, and in the same way? Well, let’s look at the 25 The Business...

Ngày tải lên: 21/06/2014, 07:20

... 34 How to Understand Business Finance We start by adding up the assets of the business. There is £3,000 cash, £30,000 owed to us by customers, and no stock. This gives us total current assets ... on the right-hand side of our board – this is cash which has gone out of the business to pay the bills. We’re now ready to move on to the next business cyc...

Ngày tải lên: 21/06/2014, 07:20

... take them. Selling assets Clearly, we do not want to sell assets which we will need to run the business in the future. However, there are other assets which could be sold to generate cash. If there ... out the door. In other words, most companies get their suppliers to fund their business to a greater or lesser degree. This is why the US convention is to have...

Ngày tải lên: 21/06/2014, 07:20

... (8) 14 12 12 (14) 10 10 30 (20) 20 14 30 (12) 32 16 30 (14) 32 18 30 (18) 30 Fixed assets 20 25 30 30 35 35 Net assets 34 35 50 62 67 65 62 How to Understand Business Finance business it may be possible to go back to the owners and ask for more money (ie appeal to relatives). ... for all the funds on the bottom half of the balance sheet and in UK accounting is...

Ngày tải lên: 21/06/2014, 07:20

... because your bank manager is • not experienced enough to understand the nature of your business. The bank is helping you to refi nance because it wishes to • exit your industry sector. The bank ... in the future (hence the high share price), or perhaps the stock is overvalued for the current level of return. 86 How to Understand Business Finance conside...

Ngày tải lên: 21/06/2014, 07:20

... today’s money. 126 How to Understand Business Finance Or, if your prices come under pressure from competitors, how low can you let them go, and still make the profi t you want to achieve? 121 What ... all these options will have an impact on the bottom line, which of these actions is most eff ective depends on the dynamic of your business. You can test the sensitivit...

Ngày tải lên: 21/06/2014, 07:20

... goods. Debtors ‘Debtors’ refers to the amount of money owed to us by our customers. This is directly related to how long customers take to pay their bills. The longer we give them to pay, the more ... you are selling the least… 150 How to Understand Business Finance equity The net worth, or balance sheet value, of the business to its owners. If all th...

Ngày tải lên: 21/06/2014, 07:20

... usually controlled by the operating manager) and shows the ability of the business to cover interest charges and use loan fi nancing. It also shows the inherent profi tability of the business. See ... value of their shares. They risk not receiving dividends, and losing some or all the value of their investment, if the company performs badly. 156 How to Understand...

Ngày tải lên: 21/06/2014, 07:20