Welcome to
Make better, smarter, faster, business decisions!
•
“To empower individuals with the freedom to gain greater
control over their own health.”
Guided by…
 “The Most Influential Consultant Alive”
April 30, 2007, p.163, Fortune Magazine
 India  Harvard MBA Professor
 30 years consulting with Fortune 500
Company CEOs.
Important Question!
What’s your “Business Acumen”?
How much do you know about
Alere’s
Key Success Measures?
Let’s find out!
Pop Quiz!
Please use the following
customized questions
(Write your answers on Page 35)
For fiscal year:
1 - How much Cash was on hand?
2010
Its OK to guess! 
2 - How much cash was generated by core Operating Activities?
$ _____
$ _____
3 - What was our Gross Profit Margin?
_____%
4 - What was our Operating Income/EBIT Margin?
_____%
5 - What was our Net Income Margin?
_____%
6 - How was our Income per Common Share? (EPS)
$ _____
7 - What was our Net Revenue/Sales?
$ _____
8 - How much did we have in Total Assets?
$ _____
9 - What was our Return on Assets (ROA)?
_____%
10 - What was our Net Revenues/Sales growth rate? (Y/Y)
_____%
11 - What was our Operating Income/EBIT growth rate? (Y/Y)
_____%
12 - What was our Net Income growth rate?
_____%
35
Clear Learning Objectives:
1. List and describe the 12 key performance measures that are
important Ron Zwanziger and the Executive Team.
Cash
2. List and describe the 5 business drivers all
successful businesses must focus on.
Growth
People
Assets
Profit
®
3. Create a personal action plan that can positively impact personal
performance and company results.
4. Teach specific components of Alere’s financial statements.
5. Better articulate company performance & strategy.
Acumen means?
…the ability to make good business decisions
in a timely manner with an understanding of
how the decision should impact the business.
3
Cash
Definition: Cash & Cash Flow
Growth
People
Profit
Assets
®
DEFINITION
What is required to Grow and Maintain the business.
MEASURES
Cash
(Savings Account)
Cash:
Cash
“The bills and coins in the register,
cash, and
$5,000petty
On hand
cash in the bank. It also includes cash equivalents,
like CD’s and other highly liquid investments, that is
easily converted into cash within
days.”
Cash90Flow
 See Page 58
(Checking Account)
Cash Flow:
$100,000 Salary
“Cash generation or “cash flow” is the difference
- $90,000 Expenses
between the cash that flows into the business and the
$10,000 = Cash Flow
cash that flows out of the business in a given period
of time (month, quarter, annual)”  Put in Acct.
 Spend it
 Invest it
8
Cash
CASH
Growth
People
Profit
Assets
®
How to obtain Cash
1. Earn it
Pro: No Cost
Con: Not Immediate
2. Sell Assets
Pro: Immediate
Con: Reduce Assets
3. Borrow it
Pro: Immediate
Con: Cost (Interest)
Can a company have:
1. Too much Cash?  Yes! Not using cash wisely. Investors want:
Either invest it or return it to us in dividends!
2. To little cash?
 Yes! #1 reason why companies fail.
(#2 is cultural differences)
3. Too much Cash Flow?  No!
9
Cash
Key ways to increase
CASH and CASH FLOW:
Growth
People
Profit
Assets
®
(Take notes on Page 9)
To increase CASH:
 Paying slower
 Collecting faster
… with the same sales revenues and costs.
To increase CASH and CASH FLOW:
 Increase revenues/sales
 Reduce/cut costs
9
Cash
Cash
Growth
People
Profit
(Take notes on Page 9)
Assets
®
(in millions)
Total “Sales”
Net Sales
Cash Measures:
Alere
2010
Alere
2009
Alere
2008
Alere
2007
$ 2,155
$ 1,923
$ 1,583
$ 767
18.6%
25.6%
8.9%
45.1%
Cash
Cash and Equivalents
$ 401
$ 493
$ 141
$ 415
Cash Flow
Cash from Operations
$ 275
$ 288
$ 148
$ 89
Free Cash Flow
$ 179
$ 187
$ 82
$ 53
Days Sales Outstanding (DSO)
67.48
67.50
64.53
80.28
CASH: S&P 500 Average Cash: 6%
Why carry more cash?
• Acquisition?
• Uncertainty?
Cash Benchmarks
(Take notes on Page 9)
(in millions)
Total “Sales”
Net Sales
Cash Measures:
Alere
Beckman
Coulter
Meridian
Bioscience
Quidel
Corp
Abbott
Labs
2010
2010
2010
2010
2010
$ 2,155
3,663
$ 143
$ 111
$ 35,167
18.6%
10.2%
26.5%
.9%
10.3%
Cash
Cash and Equivalents
$ 401
$ 376
$ 38
$7
$ 3,648
Cash Flow
Cash from Operations
$ 275
$ 649
$ 31
$ (10)
$ 8,736
Free Cash Flow
$ 179
$ 333
$ 27
$ (21)
$ 7,721
67
79
56
70
75
Days Sales Outstanding (DSO)
CASH: S&P 500 Average Cash: 6%
Why carry more cash?
• Acquisition?
• Uncertainty?
Action Plan:
What Single Action are You Committed to do to
Positively Impact CASH and CASH FLOW?
Review:
(Page 9)
CASH:
12
Pay
slower
Collect faster… with the same sales revenues and costs.
CASH or CASH FLOW:
Increase revenues/sales
Reduce/costs
•
•
•
•
•
•
•
•
Increase collections
Increase retention
Increase sales
Increase customers
Increase data sales & features
Increase gross adds
Increase operational efficiencies
Collect as much as possible (Financial Services)
•
Have clear policies & procedures that
will enable better efficiencies
• Sell packages
• Decrease OT
• Decrease or better manage inventory
• Control expenses
• Reduce/conserve utilities
• Reduce conflicts (systems, people,
processes, IT technologies)
 Your own idea…
9
Definition: PROFIT
DEFINITION
Profit = Earnings = Income and is the money
made after expenses are subtracted from sales.
Can be expressed in dollars ($) or percent (%).
 Profit
= $
 Margin = %
#1 -
Profit
Increase price
#3 - Both!
#2 -
Lower costs
MEASURES
Gross Profit ($)
Gross Profit Margin (%)
EBIT ($)
EBIT Margin (%):
Net Profit ($)
Net Profit Margin (%):
10
Profit ($) / Margin (%)
(Take notes on Page 11)
Sales Price: $1.50
Water
Label
Bottle & cap
Packaging
Total:
- .04
- .11
- .15
- .20
( .50)
$1.50 - .50 =
$1.00 Gross Profit
Rent
Salaries, Gen, Admin. (SG&A)
Marketing
Shipping
Depreciation /Amortization
Total:
- .03
- .30
- .08
- .19
- .02
( .62)
$1.50 - $.50 - $.62 =
$.38 EBIT (Operating Income)
Interest Expense
Taxes
Total:
- .04
- .06
( .10)
$1.50 - $.50 - $.62 - $.10 =
$.28 Net Profit
COGS
 Direct Labor
66.7% Gross Margin
Controllables
25.3% Margin
Less-Controllables
18.6% Net Profit Margin
Life
Spring
Artesian Water
Profit
Gross Profit/Margin:
A good indication of how profitable a company is at the most fundamental level.
Companies with higher gross margins will have more money left over to spend
other business operations, such as research and development or marketing.
on
Operating Income or EBIT:
(Earnings Before Interest and Taxes)
EBIT is a good gauge of how well a company is being managed.
Net Profit/Margin:
The “Bottom Line”
11
High Margin vs. Low Margin
(Take notes on Page 11)
High Margins
Low Margins
32%
8.0%
28%
3.6%
22%
1.7%
WHY?
WHY?
They offer something Unique!
They sell commodities.
“If you’re not unique, you better be cheap!”
S&P 500 Averages: Net Margin = 11%
To drive Profit($) you need either: High Margin (%) or High Volume
11
Cash
Gross Profit/Margin & Net Profit/Margin
Growth
People
Profit
Assets
®
2010
(in thousands)
Net Revenue (Sales)
- Costs of Goods Sold (COGS)
= Gross Profit/Margin
Cost of Goods Sold (COGS)
• Cost of net product sales:
• Cost of service revenue:
• Cost of license & royalty revenue:
- Operating Expenses/Impairment
= Operating Income/EBIT
$2,155,347
- $1,020,760
$1.00
$1,134,587
52.64%
$688,325
$325,286
$ 7,149
$1,020,760
- $2,085,676
$(951,089)1
- Interest Expense & Taxes. Etc.
- $ 66,221
= Net Profit/Income/Margin
$(1,041,545)
Also called:
“Net Income” and “Net Earnings”
-44.12%
-48.32%
11
Cash
Profit
Growth
People
Profit
Assets
®
(in millions)
Net Revenue/Sales
Alere
2010
$ 2,155
Alere
2009
$ 1,923
Alere
2008
$ 1,583
$ 1,135
52.64%
$ (951)
$ (1,017)
-47.20%
$ (4.54)
$ 1,054
54.83%
$ 146
$ 34
1.75%
$ 0.30
$ 854
53.93%
$ 65
$ (22)
-1.38%
$ (0.14)
Profit
Gross Profit
Gross Margin
EBIT (Operating Income)
Net Income
Net Margin
EPS
S&P 500 Averages: Gross Margin = 32% Net Margin = 11%
Gross Profit/ Margin %
= [Net Revenue – COGS] ÷ Net Revenue x 100
EBIT/Operating Income = [Net Revenue – Operating Expenses] ÷ Net Revenue x 100
Net Income/Margin %
= [Net Revenue – All Expenses] ÷ Net Revenue x 100
Earning Per Share
= ($1,041,545)
(On Statement of Operations )
÷ 84,445
($12.33)
(Net Income available to common stockholders)
(Shares)
(“Adjusted” = Non GAAP)
•Profit is an opinion.
•Cash is a fact.
Profit Benchmarks
(Take notes on Page 11)
(in millions)
Element
Net Sales
Alere
2010
$ 2,155
Beckman Meridian
Coulter Bioscience
2010
2010
$ 3,663
$ 143
Quidel
Corp
2010
$ 111
Abbott
Labs
2010
$ 35,167
$ 58
51.47%
$ (11)
-9.94%
$ (15)
$ (0.34)
$ 20,502
58.30%
$ 4,626
13.15%
$ 6,088
$ 4.21
Profit
Gross Profit
Gross Margin
Net Income
Net Margin
EBIT (Operating Income)
EPS
$ 1,135
52.64%
$ (1,017)
-47.20%
$ (951)
$ (4.54)
$ 1,653
45.11%
$ 231
6.30%
$ 400
$ 3.58
$ 88
61.87%
$ 27
18.64%
$ 41
$ 0.65
S&P 500 Averages: Gross Margin = 32% Net Margin = 11%
Cash
Action Plan:
Growth
What Single Action
are You Committed to do to
(Personal action plan - page 11)
Positively Impact PROFIT?
People
Profit
Assets
®
Review:
Profit = Income = Earnings
Profit = $
Margin = %
Profit = Profitability: Increase price or decrease costs.
 Product Margin: Increase Price and/or Decrease costs or both
 Company Margin: increase Sales and/or decrease expenses or both
• Effective management of operational costs
Increase in
product
• Expressed
dollarssales
($) orprices
as a percent (%).
• Educate employees on company products to enhance
• Increase company sales
up-selling
cross-selling
Gross• Margin
= Sales
 A good
indicationand
of how
profitable a company is at the
Increase accessory sales
(higher margin sales)
• Manage/Reduce
- COGS
most
fundamental level.OCC’s (Other Credits & Charges)
• Reduce/eliminate color
copies
• Decrease delinquent customers
• Reduce expenses
Operating
Profit (EBIT) = Sales
 Earnings
Before
Interest
Taxes (non-controllables)
• Book
flights
4 wksand
in advance
• Decrease utilities
- COGS
 EBIT
is a good
gauge of how well a company is being managed.
• Faster
on-boarding
• Decrease equipment returns
- Controllables
• Reduce 0 – 12 month turnover ($24,000)
• Decrease equipment replacement
• Reduce overall company turnover
• Decrease
Net Profit
Margindiscounting
= Sales
• Effective training
• Decrease credits - COGS
- Controllables
- Non-Controllables
(All Expenses)
11
Definition: Assets
Cash
Growth
People
Profit
Assets
®
DEFINITION
Assets
What we have and how well we use what
we have.
Asset Strength
(Have)
Asset Utilization
(Use)
• People:
Increase employee
productivity.
• Property:
increase usage with
lower number of
buildings.
• Cash:
Buy back stock, acquire
another company, invest
in higher returns.
• Inventory:
“just in time” inventory
increasing inventory
turnover.
• Plant &
Equipment:
Decrease cycle time.
• Information:
Increase number of
patents per year.
12
Asset
(Take notes on Page 13)
(in millions)
Alere
2010
Alere
2009
Alere
2008
-16.07%
0.49%
-0.37%
Inventory Turnover
3.96
3.92
4.20
Quick Ratio
1.54
3.06
1.54
Current Ratio
1.53
2.89
2.29
Debt to Equity Ratio
1.46
0.97
0.82
40.68%
50.80%
55.06%
Assets
Return on Assets (ROA)
Equity Ratio
ROA =
Net Income
Total Assets
Inventory Turnover =
Debt to Equity Ratio = Total Liabilities
Shareholders Equity
Sales
Inventory
Current assets – inventory
(Ready Cash/Acid Test)
Current liabilities
Quick Ratio =
A high debt/equity ratio generally means that a company has
been aggressive in financing its growth with debt.
Auto Manufacturers: >2 Computer companies: < .5
Equity Ratio =
Shareholder Equity
Total Assets
(Greater than 1)
Current Ratio =
(Greater than 1)
Current Assets
Current Liabilities
13
Asset Benchmarks
(Take notes on Page 13)
(in millions)
Alere
2010
Return on Assets (ROA)
Quidel
Corp
2010
Abbott
Labs
2010
-16.07%
4.72%
17.22%
-5.25%
7.78%
Inventory Turnover
3.96
3.19
1.95
2.97
4.60
Quick Ratio
1.54
1.72
6.91
2.24
0.94
Current Ratio
1.53
2.15
6.64
3.55
1.29
Debt to Equity Ratio
1.46
1.29
0.13
0.91
1.66
40.68%
43.65%
88.75%
52.43%
37.65%
Equity Ratio
ROA =
Beckman Meridian
Coulter Bioscience
2010
2010
Net Income
Total Assets
Inventory Turnover =
Debt to Equity Ratio = Total Liabilities
Shareholders Equity
Sales
Inventory
Current assets – inventory
(Ready Cash/Acid Test)
Current liabilities
Quick Ratio =
A high debt/equity ratio generally means that a company has
been aggressive in financing its growth with debt.
Auto Manufacturers: >2 Computer companies: < .5
Equity Ratio =
Shareholder Equity
Total Assets
(Greater than 1)
Current Ratio =
(Greater than 1)
Current Assets
Current Liabilities
13
Action Plan:
What Single Action are You Committed to do to
Positively Impact ASSETS?
Cash
Growth
People
Profit
Assets
®
(page 13)
REVIEW:
ASSETS
= Efficiencies, productivity, speed,
making assets work harder
•
•
•
•
•
•
•
•
•
•
•
Increase efficiencies (employee/company)
Increase employee productivity
Increase performance
Increase process efficiencies
Increase cross-training
Decrease travel distance for US Trainers
Increase multi-sales
Increase smart road mapping
Increase outbound calls/hour (CS employees)
Increase call efficiencies
Increase and promote self serve options
•
•
•
•
•
•
•
•
•
•
•
Decrease customer churn
Increase FCR (First Call Resolution)
Decrease average handle time (AHT) per call
Use resources better within the company
Least cost network design
Schedule more efficiently
Encourage web meetings
Least cost routing
Cross train employees
Reduce unplanned absences
 Your own idea…
13
Cash
Definition: Growth
Growth
(Page 14)
People
Profit
Assets
®
Notes
Growth
Business growth:
1) Sales (Top-line)
2) Profit (Bottom-line)
3) Earnings per share growth (EPS)
Two types of growth:
1) Organic growth
2) Inorganic growth
 New companies:
(Sales -or- Profit)
 prefer to grow _____ fastest?
 Mature companies:
 prefer to grow _____
faster than _____ .
14
Why is Growth so important?
Cash
Growth
People
Profit
(Page 15)
Assets
®
“Change is a constant in today’s business world so you are either
growing with it or dying from it. Growth forces a company to
change and adapt, to anticipate customer needs, and to look for
new opportunities.”
 Investors expect it
 Employees are more energized
 Growth provides opportunities for employees
 Customers are generally more attracted to it
 Attracts better suppliers
 Executives are measured by it.
 It takes 5 times as much to win a new customer as it does to
keep an existing one.
14
Business in Rapid Decline…
(Take notes on Page 15)
Cash
Growth
People
Profit
Assets
®
• Best & brightest leave first.
• Productivity goes down.
• Morale goes down.
• Costs are cut, which limits ability to grow,
company becomes less profitable.
Studies Show:
It usually takes 4 or 5 years for the company
to recover.
14
Cash
Business in Rapid Growth…
Growth
(Take notes on Page 15)
People
Profit
Assets
®
• Attracts/Retains the best & brightest!
• Productivity goes up = more profit = more
cash = more ability to grow!
• Morale is high.
• You have the ability to grow in your career!
Growth gets more time & attention than any
of the 5 elements in a public company.
14
Growth
2001
 Nov: Split from IMT upon acquisition by J&J
 Feb: First Check Diagnostics
 Dec: Unipath
 Jun: QAS; Biosite
2007
2002
2003
2004
 Mar: IVC Industries
 Nov: Hemosense; Alere Medical
 Dec: Wampole Laboratories
 Dec: Paradigm Health; Redwood Toxicology
 Sep: Abbot Rapid Test Business
2008
 Jan: PanBio (Aus); BBI Holdings (UK)
 May: Matria Healthcare
 Sep: Opened first Chinese manufacturing site
 Jun: Concateno
 Feb: Binax
2005
 Sep: Cholestech
 Jun: Determine line from Abbott
2009
 Jul: Free & Clear
 Nov: Tapestry Medical
 Sep: Biostar product line; IDT product line
 Feb: ACON Laboratories; Clondiag Chip Tech
2006
 May: 49% Interest in TechLab
 Dec: Joint Venture with P&G
2010
 Jan: Epocal; Standard Diagnostics (Korea)
Global Orientation

Manufacturing: California, Maine, UK, Germany, Israel, Japan, China, Australia, South Africa, Spain

Research & Development: California, Maine, China, England, Germany, Israel, Scotland

Sales: United States (AZ, CA, FL, GA, IL, ME, MA, NV, NJ, OH, WA), Australia, Austria, Brazil,
Canada, China, Colombia, France, Germany, India, Israel, Italy, Japan, Korea, Netherlands, South
Africa, Spain, Switzerland, Taiwan, United Kingdom
Growth
Cash
(Take notes on Page 15)
Growth
People
Profit
Assets
®
(in millions)
Alere
Alere
Alere
2010
2009
2008
$ 2,155
$ 1,923
$ 1,583
Net Revenue Growth
12.10
21.49
106.41
Net Income Growth
-3,116.93
254.89
1024.25
EPS Growth
-1,613.33
314.29
814.29
Net Revenue
Growth Benchmarks
Cash
(Take notes on Page 15)
Growth
People
Profit
Assets
®
(in millions)
Alere
Beckman Meridian
Coulter Bioscience
Quidel
Corp
Abbott
Labs
2010
2010
2010
2010
2010
$ 2,155
$ 3,663
$ 143
$ 111
$ 35,167
Net Revenue Growth
12.10
12.35
-3.55
-31.95
14.31
Net Income Growth
-3,116.93
56.83
-18.65
134.28
-19.49
EPS Growth
-1,613.33
-10.28
-18.75
130.09
8.79
Net Revenue
Action Plan:
Cash
Growth
What Single Action are You Committed to do to
Positively Impact GROWTH?
People
Profit
Assets
®
(page 15)
GROWTH = Increase:
-Sales, and/or
-Profits, and/or
-Earnings per share (EPS) for public companies.
 Quarter over quarter, or year over year increases
 Organic growth: comes from a company’s existing business
 Inorganic growth: comes from merger and acquisitions.
•
•
•
•
•
•
•
•
Increase: customers, revenues,
and product offerings
Up sell product sales
Increase R2B sales
Reduce churn (retain customers!)
Increase subscribers/customers
Increase add-a-line sales
Sell value
Create customer loyalty
•
•
•
•
•
•
•
•
•
•
Increase global services
Increase network forecasting
Provide exceptional service (Int’l & Ext’l)
Increase open protocol
Invest in employees
Better utilize marketing utilization
Play a part in culture shaping and acquisition
integration
Hire talent that is strong and adaptable
Develop great leaders
Anticipate employee needs that will support a
growth strategy
14
Definition: People
(page 16)
People
People:
The “external customer” or
consumer of your product.
The “internal customer” or
employees.
“Communicate a persons potential
so clearly that they are inspired to
see it within themselves.”
16
Definition: PEOPLE
(Take Notes on Page 17)
External Customers:
1.Have a formal process for listening to your customers
2.Anticipating customer needs is critical!
Internal Customers:
1.Meet with them monthly and ask:
•Are there any gaps in my performance, and
•Have my priorities changed?”
Top 2 Reasons Why Companies Fail:
#1 reason: (Too little Cash)
#2 reason: cultural differences.
17
Customers:
Cash
Growth
People
Profit
(Take notes on Page 17)
Assets
®
What’s more important than meeting Customer Expectations?
Exceeding?
Anticipate Customer Needs & Expectations!
 Henry Ford:
“If I would have asked my customers what they wanted, they would have
said a faster horse.”
 Wayne Gretzky:
“I skate where the puck is going to be.”
17
People Benchmarks
Cash
(Take notes on Page 17)
Growth
People
Profit
Assets
®
Business Driver
Inverness Inverness Inverness
Beckman Meridian
Coulter Bioscience
Quidel
Corp
Abbott
Labs
2009
2008
2007
2009
2009
2009
2009
9,802
4,852
4,034
11,800
442
331
83,000
People
Number of Employees*
Through 10/31/10
 Total Employees NOT including temps in China:
 Total Employees including temps in China:
*Numbers do not include our temporary workers in China.
10,211
11,882
Action Plan:
What Single Action are You Committed to do to
Positively Impact PEOPLE?
Cash
Growth
People
Profit
Assets
®
(page 17)
REVIEW:
People: Internal & External
1)External: Meet  Exceed  Anticipate!
3)Internal: Meet monthly: ask,
“Are there any gaps in my performance and have my priorities
changed?”
INTERNAL:
EXTERNAL:
•
•
•
•
•
•
•
•
•
•
• Listen with empathy to resolve unhappy customers
• Ensure equipment functionality before customer takes
it home
• Possess good product knowledge when selling
• Qualify each customer
• Better educate customers
• Set up customer phones
• Increase customer negotiations
• Increase customer awareness
17
• Accurately set customer expectations
Develop teams into leaders
Invest in employees
Develop a learning culture
Exceed deadlines
Be positive
Always follow through
Increase vision
Anticipate needs and expectations
Increase employee education
HR: Hire the best!
5 Business Acumen Elements:
 Can you ignore any of these over time and still be successful?
Elements are Inter-dependent
18
Financial Statements:
-Training, Teaching Module-
Financial Statements
 Statement of Operations
 Balance Sheets
 Statement of Cash Flows
(Take lots of notes!)
1. What is the basic equation for each statement?
2. What is the purpose of the statement?
3. What are the key numbers and how are they trending?
4. How can you impact each statement?
Equation:
Sales – Expenses = Income
INVERNESS MEDICAL INNOVATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
REVIEW  Teach  1 Question
(in thousands, except per share amounts)
• P&L (Profit & Loss)
Indicates:
• Income Statement
Profitability
• Statement of Earnings
Gross Profit ($)
$1,134,587
= Top Line
Gross Margin (%)
$1,134,587
÷
COGS
2,155,347
52.60%
Gross Margin
S&P 500 Ave = 32%
SG&A:
SG&A
(G&A)
Non-GAAP
= $55,268
EBIT
• Salaries
• Advertising
• Sales commissions
• Call center costs
• Benefits/Severance
• Rent
• Bad debt charges
• Merger integration costs
• Professional services:
Attorney fees, Accounting
EBIT
(operating Income)
($951,089)
EBIT Margin
($951,089)
÷
$2,155,347
-44.13%
Net Profit
($1,041,545)
Net Profit Margin
(1.041,545)
÷ 2,155,347
Net Profit Margin
= Bottom Line
-48.32%
S&P 500 Ave = 11%
Equation:
Assets = Liabilities + Equity
INVERNESS MEDICAL INNOVATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
REVIEW  Teach  1 Question
Indicates:
Financial Strength
Most Liquid
Becomes Cash < 1 year
Current Ratio: 1,194,257 ÷ 782,858 = 1.53
(Greater than 1)
Least Liquid
Due First
Due in < 1 year
Debt-to-Equity Ratio:
(782,858 + 2,969,790) ÷ 2,577,726 = 1.46%
Due Last
Balance
Equity Position:
40.71%
(2,577,726 ÷ 6,330,374)
S&P 500 Ave = 20%
Assets =
Liabilities
+ Equity
6,330,374 = (782,858 + 2,969,790) + 2,577,726
Equation:
INVERNESS MEDICAL INNOVATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Cash In – Cash Out = Net Change in Cash
(in thousands)
Purpose:
Cash Management
Earn it
Cash flowing in
Cash flowing out
Healthy operating cash flow means that the
company can finance more of its growth
internally, without borrowing or selling stock
or assets.
Most important number!
Sell Asset
Spending on investments suggests
management is investing in the future.
Borrow it
?
Shows the dependency of the company on
outside investing. You can also see if the
company has been selling new shares to
outside investors or buying back its won
stock.
Net Change in Cash (+/-) 
Started Year 
Ended Year 
?
Management Module
-Navigating the Financials-
(GAAP)
401,306
275,424
1,134,587
2,155,347
52.64
0 - (951,089)
2,155,347
(44.13)
0 - (1,041,545)
2,155,347
(48.32)
(12.33)
2,155,347
6,330,374
0 - (1,041,545
6,330,374
(16.45)
2,155,347
1,922,641
12.10
0 - 951,089)
0 - (1,041,545)
146,050
(751.20)
10,744
(9,794)
(Non GAAP)
401,306
275,424
1,134,587
2,155,347
1,427,396
2,155,347
1,280,367
2,155,347
1,280,367
Net Income
÷
84,445
Total Weighted Shares
52.64
66.23
59.40
15.16
2,155,347
6,330,374
1,280,367
6,330,374
2,155,347
1,922,641
1,427,396
146,050
1,280,367
10,744
20.23
12.10
877.33
11,817.04
Management Module
-Action Planning-
Changing Behaviors: Study
*Based on a 1993 Brigham Young University Study
When a Person Says …
Chances of the idea being
incorporated into their life is...
“That’s a good idea”...
10%
“I’ll do it!” and commits...
25%
Says when they’ll do it…
40%
Plans how to do it…
50%
Commits to another…
60%
Sets a future specific
appointment with the
person they committed to...
95%
Where to Find Information
(Page 55)
Web Sites:
•
www.nasdaq.com
•
www.finance.google.com
•
www.reuters.com
•
www.hoovers.com
•
www.yahoo.com
•
www.smartmoney.com
Go to: Investor Relations
One Final Thought…
“People will work
hard for a paycheck,
harder for a person, and
hardest for a reason.”
~T. S. Monson
(Multi-national Leader)
(Life = Risk Video)