Charting Your Path to Financial Success
April 20-22, 2015
Patricia Lawrence, CMA
Principal & Consulting CFO
©2015 Turbo Execs LLC
BONUS MATERIAL
©2015 Turbo Execs LLC
Financial Statements
 Balance Sheet – cumulative accounts of the company
 P&L (Income Statement) – profit/loss over period of time
 Cash Flow – where the money comes from/goes to
Cash is King!
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Financial Statements
Income Statement (P&L) - measures the profit and
loss of a business over a period of time
 Revenue
 Expenses
 Margin/Gross Profit
 Operating Income
 EBITDA – Earnings before interest, taxes, depreciation,
amortization
 EBIT – Earnings before interest & taxes
 Net Income/Loss
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Financial Statements
Interest
Depreciation
Amortization
EBITDA
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EBIT
Financial Statements
Balance Sheet – cumulative accounts of the
company
 Assets
 Liabilities
 Owner’s Equity
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Financial Statements
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Financial Statements
Cash Flow – where the money comes from and
goes to
 Operating Activities
 Investing Activities
 Financing Activities
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Financial Statements
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Financial Statements
Cash Flow
vs
Profit
 Concerns the movement of
 Looks only at income and
money into and out of the
business
 Functions as the “gas” in
your business engine
 Where is cash tied up in
your business?
expenses
 Important to ensure you
make money on your sales
 Can be profitable, but cash
poor
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Financial Statements
How long is your cash cycle?
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Financial Statements
Departmental Expense Reports
 Measure spending vs benchmarks, typically budget & prior
year
 Accountability tool
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Financial Statements
Departmental Expense Reports
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Financial Statements
Accounts Receivable Aging
 Track slow paying customers
 Manage cash
Accounts Payable Aging
 Track future vendor payment obligations
 Manage cash
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Financial Statements
Accounts Receivable Aging
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Financial Statements
Accounts Payable Aging
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Financial Ratios
 Common Size Ratios
 Liquidity Ratios
 Operating Ratios
 Solvency Ratios
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Financial Ratios
Common Size Ratios
Calculate each line item as a percentage of the total, which
makes comparisons more meaningful.
 Common Size Ratios from the Balance Sheet
 Common Size Ratios from the Income Statement
Helpful in identifying trends
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Financial Ratios
Liquidity Ratios
Measure your company’s ability to cover its expenses.
 Current Ratio
 Quick Ratio
Indicators of financial strength
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Financial Ratios
Operating Ratios
Measure the efficiency of your company’s operations.
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Inventory Turnover Ratio
Inventory Days on Hand
Accounts Receivable Turnover Ratio
Accounts Receivable Days on Hand
Accounts Payable Turnover
Accounts Payable Days
Cash Cycle
Return on Assets
Key indicators to management running the business
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Financial Ratios
Solvency Ratios
Measure the stability of your company and its ability to
repay debt.
 Debt to Worth Ratio
 Working Capital
 Net Sales to Working Capital
 Z-Score
Indicators of the company’s viability and financial health
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Performance Metrics
 Manufacturing Productivity (cost of production)
 Pieces per hour
 Yield & Waste
 Machine Throughput
 Sales per labor hour
 Sales Inquiries (customer service department)
 Calls per day
 Conversion rate
 Sales Productivity (sales force)
 Sales per employee
 Sales/wages paid
 Turns (days)
 Inventory
 Receivables
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ACME INC.
BALANCE SHEET
Fiscal Year Ending December 31, 2014
Balance Sheet
Assets
Cash
Accounts Receivable
Inventory
Furniture & Equipment
Vehicles
Accumulated Depreciation
2014
40,443
84,686
17,451
75,770
76,155
(53,795)
2013
65,034
46,840
10,000
55,962
21,230
(29,692)
Total Assets
240,710
169,374
100,400
Liabilities & Shareholder's Equity
Accounts Payable
Deferred Revenue
Payroll Liabilities
Sales Tax Payable
Line of Credit
Long-Term Debt
10,000
57,627
15,998
620
1,618
110,503
19,352
10,000
4,958
922
22,156
108,912
13,897
5,000
2,659
776
15,325
59,501
Total Liabilities
196,366
166,300
97,158
44,344
3,074
3,242
240,710
169,374
100,400
Shareholder's Equity
Total Liabilities & Shareholder's Equity
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2012
26,396
30,231
17,307
0
27,216
(750)
ACME INC.
INCOME STATEMENT
Fiscal Year Ending December 31, 2014
Income Statement
2014
Revenue
Cost of Goods Sold
2013
2012
1,354,589
614,420
916,148
374,454
777,054
340,825
Gross Profit
740,169
541,694
436,229
General & Administrative
Selling/Advertising
Compensation/Benefits
Travel
Rent
Insurance
Utilities
Depreciation & Amortization
236,069
124,938
195,690
8,885
14,273
65,849
19,358
24,103
98,160
84,359
246,760
5,600
21,497
41,915
11,466
28,942
20,983
57,661
291,784
4,351
10,913
28,321
14,448
0
Total Operating Expenses
689,165
538,699
428,461
(80)
0
(572)
0
(30)
0
Income Before Taxes
51,084
3,567
7,798
Taxes
NET INCOME
9,814
41,270
3,735
(168)
10,590
(2,792)
Other Income/(Expense):
Interest Expense
Gain/(Loss) on Investments
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About the Presenter
Patricia I. Lawrence, CMA – Principal, Turbo Execs
Patty works with results-oriented small and medium business owners who are struggling with financial chaos,
such as out-of-control growth, sudden terrifying decline in revenues or profits, or people problems that are
having a negative impact on the business.
She reveals the “story behind the numbers” with financial tools and systems that quickly skyrocket productivity
and remove barriers to growth and profitability. As a result, her clients typically increase the bottom line by at
least 15% and feel in control of their finances and results.
Patty got her first taste of entrepreneurial life in the office of her father’s well drilling business in her teens. With
her first accounting class in high school, she’d found the professional outlet for her problem-solving skills.
In her free time, Patty enjoys playing competitive tennis. Her husband and two sons hope she’ll renew her old
passion for baking again soon.
plawrence@ImplementationMG.com
©2015 Turbo Execs LLC
(717) 917-0342
About Turbo Execs
Driving Companies Toward Profitable Growth through:
• Empowering Financial Systems
• Eliminating HR Headaches
• Engineered for Profits
• Additional Executive Horsepower
In the midst of chaos, Turbo Execs get things back on track
and put you in the driver’s seat. With more management
horsepower for your business – when you need it.
©2015 Turbo Execs LLC