DIFFERENTIAL ANALYSIS
CASH – FUTURE - DIFFERENT
1.Read thru the section first. Highlight qualitative points in text
2. Label section “Differential Analysis”
3. Label “Qualitative Analysis”
- 3 or 4 facts
- write in phrases in 2 levels – case fact then implication
1.“storage moving is less expensive than standard moving”
2. “that might open up a new area of the market for us”
- conclude with “qualitative analysis suggest this is a good idea to explore further”
4. Quantitative Analysis – numbers are new business only
- Lay out page with 4/5 lines for inflows, 12 for outflows, totals for each, a total cashflow and an
investments line
- circle numbers in case. Tick them off as you use them. Tick lines as you go
- for sales do a high and low scenario
- round to 1 decimal point
- investments – the obvious ones from case and A/R, A/P and Inventory (if there)
5. Calculate ROI
6. Calculate payback
7. Make decision: “I would do the new plan”