Financial Statement performance videos

Financial Statement Story

The methodology used in this video supported by the key conservation topics listed below provide a guide for both the business manager and the internal business advisor to communicate how past and future strategies have impacted current and future financial performance.    



One Page Communication Platform

 

 1. Measure how effective you are at converting decisions and actions into financial performance

 2. Convert all the various financial statement documents into a One Page interactive Scorecard

 3. Do any form of "what if" .... KNOW BEFORE YOU DECIDE.

  a. What if we grow will this create more or less cash

  b. What if we add additional products or services will this improve our profit and cash to the point where the reward exceeds the risk

  c. What if we increase our staffing levels how much additional revenue do we need to do this

  d. What if we improve our supply chain will the benefit exceed the cost of doing it.

  e. What if we increase our marking spend how much additional revenue and cash do we need to make it happen.

  f. What if... create your own circumstance and GFB will measure the result

 4. Deliver the critical performance measures to your team that are aligned to the required financial statement performance

 5. Guides management as to what should be focused on.

 6. Quantifies where the inefficiencies are. "What's fat and what not"

 7. Automates the whole budget process producing the projected income statement, balance sheet and cash flow for one or multiple future periods.

 8. Stress test future strategies and modify any budgeted period which strategic changes.

 9. Deliver future assumptions that guide management performance

 10. Produce historical and future financial reports

 11. Create user defined performance measures that are applicable to your business model.

 12.  Provides a powerful way to deliver your performance in board meetings, senior management meetings and strategic planning meetings.

Other good to know stuff

 1. Imports directly from Quick Books® and excel

 2. Inquire about our 20 week video course on how to create the financial statement performance discipline

 3. Cost $600.00 per annum for the software management tool

 4. Training is $600.00 for a 2 x session in person web delivered course (each session is about 2 hours)

 5. Total online help video system

Please let us know how we can power your intuition with the rigor of evidence

 

Superior Financial performance

http://youtu.be/Ng498wKHSFw

Financial statements are the only business measurement system. How effective you are at using these documents to guide you towards doing the right things, can be the difference between failure or great results.

 

Return on Capital Employed

http://youtu.be/k_y0Sf5U0u8

The ROCE story creating performance based financial statements

How Return On Capital Employed (ROCE) can be a great way use your financial statements to evaluate how business outcome impact the ability to create wealth.

 

Creating Superior Profitability

http://youtu.be/owB4pUPym3g

Here we only focused on the income statement and how can instantly identify dysfunction between Vanity and Sanity. We will leave the interests of King for another day.

Vanity is REVEUNE, Sanity is PROFIT and CASH is King

We take a standard income statement and balance sheet actually about 30 numbers and convert them into an interactive one page financial scorecard.

 

 Are we cash absorbing when we grow our business

http://youtu.be/KkW47BEueGs

 Does your business absorb or generate cash when you grow

You are presented with a standard set of financials which contains the answer... so what is it. Well that the problem it's not easy to know let's see how we can instantly identify the answer in the One Page Financial Scorecard

Gain insight into as to how the combination of income statement and balance sheet management techniques work to answer this question

 

Good debt vs Bad debt -Considering how to formulate a corporate debt policy.mp4

http://youtu.be/JoUeFKTWHtg

Do we have good or bad debt

 

You must agree this is an interesting question... we think a lot about it but very seldom seek an answer.

 

Can debt be good and what is the conditions precedent for this to be the case?

 

Let's use Global Financial Bridge www.gfbridge.com  to see if there is an easy way to reveal the secrets between good and bad debt.

 

As a starter what is our strategy when dealing with how much debt we should or should not have... I will provide a prospective the end of the video

 

Financial statement communication and analysis

http://youtu.be/7OmgP4TBaqo

Using the one page scorecard to integrate the income statement and balance sheet with the 5key focus areas of growth, profitability, balance sheet management, cash and returns

 

Projecting the future

Measuring financial statements budgets and projections against profitability, cash and return on capital. Enabling the identification of where future value will be created using Global Financial Bridge www.gfbridge.com

http://youtu.be/S0DuCQx606I

Good Growth Part 2

http://youtu.be/Eo5uNVcZpRY

How growth can create or destroy value

A Company’s Financial Statements Tell an Important Story … Can Management Successfully Communicate That Story?

I.          Introduction

    

 

            The Key to a Company’s Survival … Sustainable Free Cash Flow & The Discipline of Financial Performance

 

At this time, company management is asking itself the obvious critical question: “what can we do going forward to maximize the company’s ability to weather this downturn and to thrive in better times?”  The not-so-obvious answer to this question is that the company should focus on achieving sustainable free cash flow.  A company can achieve sustainable free cash flow if it commits to and properly executes the discipline of financial performance (explained below). 

 

            Sustainable Free Cash Flow To Satisfy Banks’ Heightened Lending Standards

 

A company’s survival, let alone success, is tied largely to the ability to manage cash flow.  No doubt this axiom will be tested and reproved in spades as the current global financial and economic maelstrom runs its course.  Arguably, companies have a greater ability to increase cash flow from operations than they do from financing activities.  A company can, for example, take action to collect accounts receivable and improve inventory turnover (operations), but companies cannot force banks to loan money (financing).

 

 

 

II.        The Discipline of Financial Performance

 

            A Company’s Performance Gap (Gross Potential – Current Performance)

 

            “Gross potential” is a financial metric that can derived by management effectively communicating a company’s leading indicators or core competencies (read: how well a company can do). A powerful example of a core competency which is often neglected is what we call “common knowledge” which is founded on the principal that knowledge is power but if critical business knowledge is housed within select organizational functions automatically restricts the “knowledge power”. This common knowledge can be segmented into

• Business strategy knowledge
• Process knowledge
• Information access capabilities
• Policy knowledge
• Measurement and expectation knowledge
• Financial performance knowledge.

 

The greater the degree of common knowledge throughout the organization the more effective the business is in getting things done the right way. Creating a systemic way to maximize common knowledge is a critical foundation to all core competency development or enhancement and thus reducing the “blind spot risk”.

 

(Note:  The process for management’s communication of financial statements is discussed below.)  Financial statements, however, are a lagging indicator of a company’s current performance (read: how well a company is doing).  They essentially paint a backward-looking picture based on a company’s financial and operating performance during the most recent fiscal period.  The “performance gap” represents the difference between a company’s gross potential and its current performance. 

 

The Root Causes of the Performance Gap: A Company’s Organizational Blind Spot & Absence of Standardization in Financial Statement Analysis and Interpretation

 

The performance gap is attributable largely to a company’s organizational blind spot.  This organizational blind sport is rooted in the common practice (in many companies) of allocating management responsibilities among several individuals.  As a result, more often than not, senior managers:

 

·         cannot understand, individually, in any transparent manner how each of a company’s individual operational segments impact on the company’s aggregate financial and operational performance, and

·         do not have a clear understanding of how a company’s financial statements (i.e., balance sheet, income statement and statement of cash flows) interrelate with and impact on one another.   

 

There is no standardized way to analyze and interpret a company’s financial statements to communicate the company’s gross potential.  The absence of standardized financial communication tools, in turn, has, among other things, two notable adverse effects on a company:

 

·         it compounds the challenges of a company’s organizational blind spot fundamentally; and

·         it impairs management’s ability to gauge a company’s performance gap and to therefore develop and implement strategies (that would increase its profitability, cash flow and return on investment) to achieve financial performance.

 

To this point, in identifying a company’s organizational blind spot and performance gap we have (so-to-speak) diagnosed the problem.  Now we must now turn to the all-important next step – the solution – the roadmap for company management to overcome the organization blind spot and to achieve the company’s gross potential.

 

III.       The Discipline (of Financial Performance) to Achieve Gross Potential

 

Interactive Real-Time Financial Management Communication – The Performance Gap Cure

 

            At its core, the discipline of financial performance is about two things:

 

·         a powerful organizational learning platform that connects management to the company’s financial statements; and

·         company management (via this platform and connection) interactively and in real-time communicating the company’s financial statements to make optimal business and operational decisions.

 

In order to be effective, this organizational learning platform must include the following fundamental components:

 

·         relevance – people connect to learning that will enhance their ability to perform and their career;

·         real-time feedback – instantaneous feedback on potential strategic decisions;

·         interactivity – simulation of hypothetical scenarios without consequences, which promotes creativity and innovation;

·         simplicity – delivery of complex material and information easily understandable format;

·         familiarity – personalization through the use of a company’s current financial information.

 

The interactive and real-time communication of the company’s financial statements will, for example, significantly improve management’s ability to evaluate whether a strategic decision to create or destroy cash or reduce corporate waste.

Global Financial Bridge, LLC and the One-Page Scorecard

 

Global Financial Bridge, LLC has created such a platform in the form of a one-page scorecard (illustrated below), which among other things:

 

·         transforms a company’s standard financial statements into an integrated environment, and communicates all of the financial statement components in a single platform; 

·         provides for interactivity and real-time feedback through calculation and analysis of robust what-if scenarios and stress testing capabilities; and

·         incorporates a net change capability that isolates the financial impact of a strategic alternatives (or alternatives) and illustrates simply how the income statement, balance sheet and cash statement changed and what the drivers created the change.

 

In our experience, those companies that have truly committed to and properly executed the discipline of financial performance have overcome successfully their respective organizational blind spots and performance gaps and achieved their gross potential.

 

 

Vendor payment period

The last of the working capital trio. How to calculate your accounts payable days or vendor days outstanding

We take the amount we owe to our vendors at the end of the period and divide it by the COGS (including the direct shipment COGS)[i]. We then multiply the result with the trading days represented in the total COGS.

Accounts payable or vendor days outstanding are useful when wanting to compare your inventory holding with how quickly you pay your vendors. If you not taking settlement discount, your payable days should exceed your inventory days.

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[i] Remember when we calculate inventory days we exclude direct shipment COGS from our inventory