Terminology
Overall Process
Step 1: Strategic Alignment
Step 2: Strategic Areas
Step 3: Strategic Grids
Step 4: Measurements
Step 5: Targets
Step 6: Programs
Best Practices
Automation
Cross Functional Team Approach
Templates
Other Organizations
Additional Examples
Why use ratios?
Calculating Return on Equity = Thu nhập trên mỗi cổ phần = tỷ suất sinh lợi vốn chủ sở hữu
Components of Return on Equity
Current Ratio= khả năng thanh toán ngắn hạn
Acid Test or Quick Ratio = khả năng thanh toán nhanh
Defensive Interval
Ratio of Operating Cash Flow to Current Debt Obligations
Accounts Receivable Turnover = vòng quay các khảon phải thu
Days in Accounts Receivable = kỳ thu tiền bình quân
Inventory Turnover – Vòng quay hàng tồn kho
Days in Inventory = Số ngày một vòng quay hàng tồn kho
Operating Cycle = vòng quay hoạt động
Capital Turnover = Doanh lợi tổng vốn
Operating Income to Sales = lợi nhuận hoạt động doanh thu
Return on Assets
Debt to Equity
Debt Ratio
Times Interest Earned
Earnings Per Share
P / E Ratio
Book Value per Share
Dividend Yield
Vertical Analysis
Horizontal Analysis
Introduction
Start with Strategic Planning
The Sales Forecast
Percent of Sales
The Cash Budget
Summary of the Budgeting Process
Quantitative and Qualitative Techniques
Smoothing out the Numbers
Regression Analysis
Sensitivity Analysis
Financial Models
Automate the Process
Ten Best Practices in Budgeting
Prepared by: Matt H. Evans, CPA, CMA, CFM
The Overall Process
Capital Expenditures
The Three Stages of Capital Budgeting Analysis
Stage 1: Decision Analysis
Stage 2: Option Pricing
Stage 3: Discounted Cash Flows
Exhibit 1 — Present Value of $ 1.00, year = n, rate = k
Example 1 — Calculate the Present Value of Cash Flows
Exhibit 2 — Present Value of Annuity for $ 1.00, year = n, rate = k
Year (n) k = 10% k = 11% k = 12%
Understanding "Relevancy"
Example 3 — Make or Buy Decision
Example 4 — Discontinue a Product
You are considering dropping product GX-4 from your product line because the Income Statement for GX-4 shows the following: Traditional Relevant
Example 5 — Accept a Special Offer
Example 6 — Calculate Relevant Cash Flows for Capital Project
Example 7 — Calculate Terminal Cash Flow for Capital Project
Calculating the Present Value of Cash Flows
Example 8 — Calculate Present Value of Cash Flows
Calculating Net Investment
Net Present Value
Example 10 — Calculate Net Present Value
Modified Internal Rate of Return
Example 11 — Calculate Internal Rate of Return
Internal Rate of Return = 6.43%
Example 12 — IRR Distortions from Reinvestment Rate Assumption
Cash Inflows
Example 13 — Calculate Modified IRR Using Microsoft Excel
Discounted Payback Period
$ 24,100 / $ 5,788 = 4.2 years
Example 14 — Calculate Discounted Payback Period
Adjusting for Risk
International Projects
Post Analysis
Course Summary
Final Exam
Prepared by: Matt H. Evans, CPA, CMA, CFM
Cash Flow Cycles
Introduction
Two Cycles: Disbursements and Receipts
Measuring Cycle Times
Cash Flow Forecasting
Example 7 — Monthly Cash Flow Forecast
January
Special Bank Accounts
Bank Financing
Receivable Financing
Inventory Financing
Unsecured Financing
Collection Practices
Disbursement Practices
Warning Signs
Summary
Final Exam
Prepared by: Matt H. Evans, CPA, CMA, CFM
Basic Concepts and Theories
Introduction
The Economics of Capital
Basic Considerations in Managing Capital
Approaches to Managing Capital
Cost of Equity and Risk
Refinancing Risk
Inflation
Floatation Cost
Marginal Cost of Capital
EBIT / EPS Comparison
Assessing Risk
Targeted Debt Levels
The Overall Process
Investment Bankers
Initial Public Offerings (IPO's)
Private Placements
Course Summary
Final Exam
Prepared by: Matt H. Evans, CPA, CMA, CFM
Basic Concepts
M & A Defined
Reasons for M & A
The Overall Process
A Reality Check
M & A Agreement
Representations
Indemnification
Confidentiality
M & A Closing
The Regulatory Environment
Anti-Trust Laws
Notifying the FTC and USJD
Security Laws
Accounting Principles
Making Due Diligence Work
What Can Go Wrong
Reworking the Financials
Going Beyond the Financials
Reverse Mergers
Course Summary
Final Exam
Prepared by: Matt H. Evans, CPA, CMA, CFM
The New Role of Finance
Real Financial Management
Breaking the Accounting Habit
Financial Restructurings
Beware of Mergers
Recapitalizations (Recaps)
Spin Offs
Monitoring Value-Creation
Problems with Stock Price Valuations
Economic Value Added (EVA)
EVA Adjustments
Using EVA
Some Problems with EVA
Cash Flow Return on Investment (CFROI)
Calculating CFROI
Using CFROI
Some Problems with CFROI
Residual Cash Flow
Doing at least one thing right!
The Need to Change & Strategize
Course Summary
Final Exam
What is Strategic Planning?
Why do Strategic Planning?
Limitations of Strategic Planning
Specific Problems Associated with Strategic Planning
Start Organizing
Situational Audits
Making Situational Analysis Work
Evaluation and Control
Contingency Plans
Updating the Plan
Three examples of strategic objectives
Over the next six months, delivery times will decrease by 15% through more localized distribution centers.
By the year 2003, customer turnover will decline by 30% through newly created customer service representatives and pro-active customer maintenance procedures.
Stakeholder Group Form of Communication
Shareholders
Financial
Revenue Growth
More Customers
Exhibit 4: Example of linking a strategic goal to a strategic area
Exhibit 5: Flowing strategic objectives within the Financial Perspective
Exhibit 6: Linking customer objectives to financial objectives
Financial
Shareholder Value
Grow Revenues
Customer
Acquire More Customers
Leader in Pricing
Financial
Shareholder Value
Grow Revenues
Customer
Become the Price Leader
Become the Price Leader
Exhibit 9: Summarize Phase I
Five Major Milestones – Phase I
Establish a clear strategy (objectives & targets)
Communicate the strategy
Strategic Objective =>
Describe the Measurement =>
Define Type / Formula =>
Sources =>
Lagging Indicators are desired results:
Leading Indicators – Value Attributes to Customers:
Perspectives
Measurements
A formal structured process of researching and analyzing the competition in an effort to identify strengths, weaknesses, opportunities, and threats.
A natural and intuitive process of seeing through the competition, anticipating future trends, and comprehending future changes required for the organization.
Cross Functional Development of the Balanced Scorecard
Executive Level
Middle Management
Lower Levels
5 Steps to Developing the Performance Prism
1st: Identify your stakeholders and determine their requirements.
2nd: Once you understand your stakeholders, develop strategies to meet their needs and requirements.
3rd: Next, identify the business processes to execute your strategies.
4th: Next, determine the required capabilities that must be developed for implementing the processes identified in step 3.
5th: Finally, align the organization around stakeholders, building alliances so that the organization can create the capabilities identified in step 4.
a. Financial
Prepared by: Matt H. Evans, CPA, CMA, CFM
Valuation Concepts & Standards
Income Streams
Free Cash Flow
Discount Rate
Basic Applications
Valuation Standards
Financial Analysis
Value Drivers
Forecasting Performance
Terminal Values
Special Problems
Managing the Process
Decision Making
People Issues
Managing Resistance
Closing the Cultural Gap
Specific Areas of Integration
Retaining Key Personnel
Retaining Customers
Measuring PMI
Poison Pills
Golden Parachutes
Changes to the Corporate Charter
Recapitalizations
Other Anti Takeover Defenses
Proxy Fights
Course Summary
Final Exam