Do the numbers actually support your decisions? Do they actually confirm what you believe are the best performing parts of your business? Do you make numbers-based decisions? Unfortunately, personal preference and gut feel do not always produce the correct answer....
Just completing the rework of a client’s Board Reporting Pack. Moving this to a single A3 page containing all the key data related to the month’s result. This sheet contains key lines from the profit & loss report, the short-term cash flow forecast, key balance...
I was speaking to a Manager of a Private Equity firm last week. He previously worked for a larger fund but is now working for one that invests in smaller businesses. He said that one of the first things his previous fund did was to place a high level CFO into new...
Is your cash flow tighter than you would like? Do you understand why this is? Here are some areas to review. What is the business’: Profitability – past and more recent Working capital position – stock, debtors, WIP Status of major projects, any timing issues Growth...
I am just completing an update of a client’s financial forecast model. This occurs on a regular basis as we refine and extend it, as our knowledge and understanding of the business increases and strategy changes are incorporated. I have been involved with this client...
Do you fully understand the key drivers of your business? Do you measure and report on these? Are you making decisions supported by numbers? Is your in-house finance team providing you with the information that enables you to make informed decisions, do you feel you...
Product mix analysis is often overlooked as an analysis tool. It is relevant when a business’ revenue stream consists of different categories of products or a small number of individual products. This is a level of analysis below the traditional sales/GP$ variance...
These metrics are not the same. The markup % will always be a larger percentage than the GP%. A markup % is applied to the cost of a product to calculate an item’s sales price ie. cost multiplied by 1 + markup %. GP% is calculated by dividing the GP$ associated with...
Volume/Rate analysis is another tool for business’ whose revenue stream consists of different categories of products or a small number of individual products. This is an actual vs budget/forecast variance and looks at the level below Sales namely units and price and...
A frequent question from businesses who quote on and cost jobs is “what markup should I apply” to cover all overhead costs and generate a profit. This is not a difficult question to answer however it does require a clear understanding of the costs included within the...
How to calculate breakeven sales
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Do you have a full understanding of your business’ Financial Position. Think you could benefit from an independent high level review. We bring 30+ years of commercial experience and learnings to this review. Above is an example of a Summary page from a typical...
Looking for more direction/pro-activeness from your finance team. Would like to employ a CFO/ more senior finance person but can’t justify the cost. Have you considered accessing the knowledge of an experienced CFO on a part-time, ad-hoc basis. Bring in an experienced...
So, cash flow is tight. Some of the short-term levers to get through – seek extensions from creditors, look to improve your debtor’s collection rates, reduce stock levels, boost sales via discounting and/or increased advertising. In the longer term the only real way...
Do you sell a range of products that you manufacture or assemble. A well-constructed financial model driven by a sales unit forecast and fed by product price, component assembly lists and cost tables will output Sales $, component demand and individual product profit...
A financial forecast is a summation of your business plan and strategies in numbers. It charts your business’ profit, cashflow and overall financial health as reflected in the balance sheet. A properly constructed financial forecast should include all key business...