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How to Understand Business Finance, Second Edition 10 docx

How to Understand Business Finance, Second Edition_3 doc

How to Understand Business Finance, Second Edition_3 doc

... outstanding costs34 How to Understand Business FinanceWe 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 Financecash to pay for the equipment and install it in our factory (see ... to understand that the top half is what we have, and the bottom half is where it came from. These two halves have to be equal – they have to balance. So let’s call it a balance sheet.28 How...
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How to Understand Business Finance, Second Edition_5 ppt

How to Understand Business Finance, Second Edition_5 ppt

... 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 ie to fi nance debtors.b) Capital ... You need to be able to show your ability to repay, whether it is a short-term overdraft or a longer term loan.74 How to Understand Business FinanceReturn on Net Assets = PBIT × 100 % Net...
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How to Understand Business Finance, Second Edition_7 potx

How to Understand Business Finance, Second Edition_7 potx

... becomes zero.020406080 100 0246 810 YearAsset valueAsset value reducingby 10% per yearFigure 10. 2 Reducing balance depreciation 106 How to Understand Business FinanceTotal shareholder return ... situation. This can be a problem when a business has become accustomed to a 0 10 2030405060708090 100 0246 810 YearAsset valueAsset valueFigure 10. 1 Straight line depreciation113 The ... might include: 102 THIS PAGE IS INTENTIONALLY LEFT BLANK98 How to Understand Business FinanceSales multiplierThe sales multiplier uses a multiple of sales to assign a value to that company....
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How to Understand Business Finance, Second Edition_8 pptx

How to Understand Business Finance, Second Edition_8 pptx

... 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 ... particular rate to refl ect opportunity costs.Table 12.2 Cash fl ows showing paybackYear£000 1 2 3 4 5 6Cash fl ows (150) 50 50 100 100 100 Cumulative cash fl ows (150) (100 ) (50) 50 150 250131 Tools ... today’s money.126 How to Understand Business FinanceOr, 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?125 What...
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How to Understand Business Finance, Second Edition_9 ppt

How to Understand Business Finance, Second Edition_9 ppt

... 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 Financemoney quickly to repay ... implicationsStock (inventories) Decrease in stocks releases cashIncrease in stocks consumes cashDebtors (receivables)– money owed by customersDecrease in total value of debtors releases...
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How to Understand Business Finance, Second Edition_10 docx

How to Understand Business Finance, Second Edition_10 docx

... 152 How to Understand Business FinanceIt 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 Financepayables’ days (US) See creditors’ days (UK).payback period The time needed for cash infl ows for a project to exceed the ... liabilities.net assets Total assets less all non-interest-bearing debts. The total investment in the business fi nanced by shareholders’ equity and interest-bearing debt.164 How to Understand Business Financevariable...
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How to Understand Business Finance Understand the Business Cycle Manage Your Assets Measure Business Performance Sunday Times Creating Success_1 potx

How to Understand Business Finance Understand the Business Cycle Manage Your Assets Measure Business Performance Sunday Times Creating Success_1 potx

... adds up to £40,000. 10 How to Understand Business Finance90 DAYS 60 DAYS 30 DAYSFigure 2.1 An imaginary business start-upNext we’ll have an area representing the money owed to us by customers. ... from:Owners’ funds 30 30 30 30Profi t10Total 30 30 30 40The Moving Balance Sheet® is a registered trade mark of Profi tAbility Business Simulations14 How to Understand Business Financecarefulness, ... ‘liabilities’.24 How to Understand Business FinanceTable 2.5 Moving Balance Sheet® – Step 5What we have (Assets):Start business Buy equipmentBuy stockSell 5 units for 20Customer paysCash...
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How to Understand Business Finance Understand the Business Cycle Manage Your Assets Measure Business Performance Sunday Times Creating Success_2 docx

How to Understand Business Finance Understand the Business Cycle Manage Your Assets Measure Business Performance Sunday Times Creating Success_2 docx

... 34 How to Understand Business FinanceWe 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 ... losses) to date (goes to balance sheet)1426 How to Understand Business Financecash to pay for the equipment and install it in our factory (see earlier, Figure 2.3). Now we need to recruit ... days’, as shown in Figure 2 .10. Figure 2 .10 Receiving payment on 60 days30 How to Understand Business FinanceHaving done all this, we’d better pay the bills. First, we’ll need to pay our...
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How to Understand Business Finance Understand the Business Cycle Manage Your Assets Measure Business Performance Sunday Times Creating Success_3 potx

How to Understand Business Finance Understand the Business Cycle Manage Your Assets Measure Business Performance Sunday Times Creating Success_3 potx

... himself into a millionaire.You can even ‘sell’ your debtors (customers who owe you money) and turn money owed to you tomorrow into cash today. This is called factoring. You go to a factoring ... overheads evenly – Customer CCustomer ACustomer BCustomer CCustomer DCompany totalGross profi t 100 80 60 xxxx 240Overheads 70 70 70 xxxx 210 Net profi t 30 10 10 xxxx 30Table 3.4 ... precisely to individual customers. BusinessesTable 3.2 Consequences of ‘spreading’ overheads evenly – Customer DCustomer ACustomer BCustomer CCustomer DCompany totalGross profi t 100 80...
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How to Understand Business Finance Understand the Business Cycle Manage Your Assets Measure Business Performance Sunday Times Creating Success_4 ppt

How to Understand Business Finance Understand the Business Cycle Manage Your Assets Measure Business Performance Sunday Times Creating Success_4 ppt

... 6562 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). In a large company with shares quoted on the stock ... 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 ie to fi nance debtors.b) Capital Expenditure; that ... reasonably expect to be repaid. You need to be able to show your ability to repay, whether it is a short-term overdraft or a longer term loan.70 How to Understand Business FinanceWorking capitalWorking...
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