Welcome to the BEC St George & Sutherland Shire

Effective Financial Analysis Presentation?

Mark Holton

Introducing your presenter

Professional Accountant & Tax Agent for over 25 years.

MYOB Certified Consultant for over 10 years.

Director of Dynamic Taxation & Training Services.

Board Member and Honorary Treasurer of Ronald McDonald House.

Chairman NSW Central Coast Academy of Sport.

Member of TMSSRLFC - GBTB

The DTTS Business Analysis Exercise

Mind Reading

Please mentally select a card and concentrate on it.

Mind Reading

And now, shout the name of your card out loud. Please don't skip this part, it is very important.

Mind Reading

I have selected your card and have removed it from the pile.

Surprised?

How would you like to see the financial impact of every business

decision before you made it?

Effective Financial Analysis (EFA)

Effective financial analysis gives you the ability to:

• Locate your business strengths and develop strategies to enhance them

• Find, fix and fix fast your business weaknesses• Identify and improve the key drivers of profit,

cash flow and return • Plan your financial future knowing that the path

you travel is the absolute best• Understand financial statements in a graphical

format

What is Effective Financial Analysis?

What is the most effective way to improve my cash flow?

What is the maximum sales growth my business can realistically sustain in the coming year?

What financial performance indicators are required to improve my financial, marketing and operational performance.

EFA - Key Business Questions

Which products and customers are truly profitable?

What is the impact on price and volume changes on my business?

What is the effect of discounts, terms and stock levels on my business?

How will key business decisions affect my profitability, cash flow and financial return

EFA - Key Business Questions

How do we implement EFA

Strengths

Weaknesses

Opportunities / Threats

Scenario 1

The Demo Company is a manufacturer and retailer based in Sydney. Management has concerns over the levels of cash flow and profitability. The Board also wish to improve the cash flow and profitability.

The company’s current cash flow after operations is negative $120,332 with a operational profitability rate of 10.01%.

How can the cash flow and profitability position be improved?

3651

BuyStock

118

SellStock

44

Pay forStock

NegativeCashflow

245

GetPaid

201 Days Negative Cashflow!!

Cash flow cycle

74 Days 127 Days

NegativeCashflow

Scenario 2

The Demo company’s cash flow position is currently negative $217,342. Management is concerned with this level of debt and wishes to work on strategies to at least break even point.

How can the decrease in debt be achieved and what will the decrease impact upon?

Scenario 3

The Demo company wishes to implement a projected budget based on a decrease of 7 days in inventory, 14 days in receivables with a 5% price increase for the next financial year. The impact of this change must be reflected the profit and loss statement and balance sheet.

How can the this be achieved?

Effective Financial Analysis (EFA) is a simple to use, time saving procedure that

provides a strategic focus of your business performance.

EFA provides a total financial solution that displays what drives your business and the

numbers behind them

“ The successful person is the one who makes a habit of doing what the failing

person does not want to do ”

Thomas Edison

A final accounting joke

What is the definition of an Accountant?

Someone who solves a problem you did not know you had in a way you did not understand at a fee you did not expect

Questions & answers

Thank you