Marketing bán hàng - Chapter 9: Financial statements

Copyright 2015 Jack M. Kaplan & Anthony C. WarrenResource ManagementPatterns of Entrepreneurship Management5th Edition, Chapter 11Chapter 9Financial StatementsFinancial AnalysisBudget ProjectionsCash Flow ForecastsManaging Money and PeopleBuilding the CultureHiring and FiringConflicts of Interest and EthicsLegal MattersCopyright 2012 Jack M. Kaplan & Anthony C. WarrenPresentation Outline Understanding Financial Statements The Value of the Balance Sheet The Value of the Income StatementThe Value of the Statement of cash flowsPreparing financial projectionsPreparing Budget projectionsPrepare a Forecast of cash FlowBuilding a Culture for InnovationHuman Resources ManagementHiring, Interviewing, Firing and Resignations Conflict of Interest Resolution Important Legal DocumentsChapter 9Financial StatementsFinancial AnalysisBudget ProjectionsCash Flow ForecastsBuilding the CultureHiring and FiringConflicts of Interest and EthicsLegal MattersCopyright 2015 Jack M. Kaplan & Anthony C. Warren The Three Basic Financial DocumentsThe balance sheet (also called the statement of financial position)An income statement or profit-and-loss (P&L) statement.The statement of cash flows (also called source and use of funds). Chapter 9Financial StatementsFinancial AnalysisBudget ProjectionsCash Flow ForecastsBuilding the CultureHiring and FiringConflicts of Interest and EthicsLegal MattersCopyright 2012 Jack M. Kaplan & Anthony C. WarrenBalance sheet = Liabilities + Shareholders equityBook Value = total of the tangible assets less subtracting all the liabilitiesBook value does not include intangible assets like Intellectual Property and goodwillGoodwill includes factors like brand, market share, and human capital Value of the Balance Sheet Chapter 9Financial StatementsFinancial AnalysisBudget ProjectionsCash Flow ForecastsBuilding the CultureHiring and FiringConflicts of Interest and EthicsLegal MattersCopyright 2015 Jack M. Kaplan & Anthony C. WarrenHow to use Ratios for Financial Analysis - 1Current Ratio  total current assets divided by the current liabilitiesQuick Ratio  Only liquid current assets such as cash and account receivables divided by current liabilitiFinancial Ratios are used by managers to monitor the health of the company and its operations. They are often used by bankers when lending to the company. These Two Ratios are used as a guide to the health of the company’s balance sheet:Chapter 9Financial StatementsFinancial AnalysisBudget ProjectionsCash Flow ForecastsBuilding the CultureHiring and FiringConflicts of Interest and EthicsLegal MattersCopyright 2015 Jack M. Kaplan & Anthony C. WarrenCurrent Liabilities to Net Worth Total Liabilities to Net WorthFixed Assets to Net WorthHow to use Ratios for Financial Analysis - 2Chapter 9Financial StatementsFinancial AnalysisBudget ProjectionsCash Flow ForecastsBuilding the CultureHiring and FiringConflicts of Interest and EthicsLegal MattersThese Three Solvency Ratios are used to gauge the sustainability and financial health of the company:Copyright 2012 Jack M. Kaplan & Anthony C. WarrenReturn on Investment (ROI) ratio compares the net profit of the business to the investment (net worth) of the business. It is calculated as net income after taxes (from the income statement) divided by total owner’s equity (from the balance sheet) ROI = Net Income Shareholders’ equity Chapter 9Financial StatementsFinancial AnalysisBudget ProjectionsCash Flow ForecastsBuilding the CultureHiring and FiringConflicts of Interest and EthicsLegal MattersHow to use Ratios for Financial Analysis - 3Copyright 2015 Jack M. Kaplan & Anthony C. WarrenEBITDA is the earnings before interest expense, interest income, income taxes, depreciation and amortization. It measures the profitability of a company’s operations without the impact of its debt, investments and long-term assets. It is the basic measurement of the day-to-day health of the company’s operations. Financial Definitions - 1Chapter 9Financial StatementsFinancial AnalysisBudget ProjectionsCash Flow ForecastsBuilding the CultureHiring and FiringConflicts of Interest and EthicsLegal MattersCopyright 2012 Jack M. Kaplan & Anthony C. WarrenA Break-even analysis is the point at which a given output results in neither profit or loss.It is a decision-making tool that helps the entrepreneur determine whether a certain volume of output will result in a profit or loss, or the minimum volume necessary to be just profitable.  Chapter 9Financial StatementsFinancial AnalysisBudget ProjectionsCash Flow ForecastsBuilding the CultureHiring and FiringConflicts of Interest and EthicsLegal MattersFinancial Definitions - 2Copyright 2015 Jack M. Kaplan & Anthony C. Warren The formula: the price per unit (P) multiplied by the number of units sold (X) is equal to the fixed costs (F) plus the variable costs (V) multiplied by the number of units produced expressed as the following formula: P(X) = F + V(X)The Break-even FormulaChapter 9Financial StatementsFinancial AnalysisBudget ProjectionsCash Flow ForecastsBuilding the CultureHiring and FiringConflicts of Interest and EthicsLegal MattersCopyright 2015 Jack M. Kaplan & Anthony C. Warren As an example, if fixed costs (F) are $40,000, the variable costs per unit (V) are $15 and the price per unit (P) is $20, the break-even point (X) can be calculated by plugging these values into the equation:20(X) = 40,000 + 15(X)20X – 15X = 40,0005X = 40,000X = 8,000 unitsExample of Break EvenChapter 9Financial StatementsFinancial AnalysisBudget ProjectionsCash Flow ForecastsBuilding the CultureHiring and FiringConflicts of Interest and EthicsLegal MattersCopyright 2015 Jack M. Kaplan & Anthony C. WarrenYoung companies are usually short of cash and therefore it is important to forecast cash needs long before starting to raise capital as equity or debt. A Forecast of Cash Flow is a month to month projection of receipts and disbursements activity including:Receipts from Sales. The detail from sales, the payment terms the company extends its customers, and the company’s collection history Other Receipts. Other receipts include bank loans, equity investments, tax refunds or any other inflows of cash Disbursements from Expenses. The detail from expenses and the payment termsOther Disbursements. This includes capital equipment acquisitions and payment of debt.Forecast of Cash FlowChapter 9Financial StatementsFinancial AnalysisBudget ProjectionsCash Flow ForecastsBuilding the CultureHiring and FiringConflicts of Interest and EthicsLegal MattersCopyright 2015 Jack M. Kaplan & Anthony C. WarrenThe annual budget presents a month-by-month projection of revenues.It is used for planning and control. Each month compare actual with budget and make adjustments as necessary. The budget is the foundation for projecting the other financial statements.An entrepreneur must always be aware of how long the current cash reserves will last..the cash “runway”. It always takes much longer to raise funds than planned.Annual BudgetChapter 9Financial StatementsFinancial AnalysisBudget ProjectionsCash Flow ForecastsBuilding the CultureHiring and FiringConflicts of Interest and EthicsLegal MattersCopyright 2015 Jack M. Kaplan & Anthony C. WarrenDeveloping a Culture for InnovationThe ability to lead an organization on a mission where everyone is involved everyday in moving forward toward clearly defined goals makes the difference between success and failure.There are 10 leadership attributes that, above all others, should be practiced within companies to insure successful innovation.Building a culture Is a top-down, everyday leadership responsibility.EVERY action must reflect the culture that you are building and there should be NO inconsistences in behaviors.Chapter 9Financial StatementsFinancial AnalysisBudget ProjectionsCash Flow ForecastsBuilding the CultureHiring and FiringConflicts of Interest and EthicsLegal MattersCopyright 2015 Jack M. Kaplan & Anthony C. Warren10 Attributes of a Successful Innovative Company-1AttributeDefinitionExampleHonestyDegree to which employee has confidence in integrity, ability, and character of others within the organization“I trust people I work with and find it easy to be open and honest with people from all over the company”AlignmentDegree to which the interests and actions of each employee support the clearly stated and communicated key goals of the organization“We have clear aims and objectives which everyone understands; we build consensus around key objectives; we recognize and reward loyalty”RiskDegree to which organization and individuals take risks“I am encouraged to experiment; we take calculated risks; we encourage and reward error”Chapter 9Financial StatementsFinancial AnalysisBudget ProjectionsCash Flow ForecastsBuilding the CultureHiring and FiringConflicts of Interest and EthicsLegal MattersCopyright 2015 Jack M. Kaplan & Anthony C. Warren10 Attributes of a Successful Innovative Company-2AttributeDefinitionExampleTeamsThe degree to which team performance is emphasized over individual performance“We promote teamwork, it’s the center of everything we do”EmpowermentThe degree to which each employee feels empowered by managers and the org.“As a manager I’m expected to delegate; we have a no-blame culture; we allow our staff to make decisionsFreedomThe degree to which self-initiated and unofficial activities are tolerated and approved throughout the organization“I’m allowed to do my own thing; we encourage people to take initiative; we recognize the individual”Chapter 9Financial StatementsFinancial AnalysisBudget ProjectionsCash Flow ForecastsBuilding the CultureHiring and FiringConflicts of Interest and EthicsLegal MattersCopyright 2015 Jack M. Kaplan & Anthony C. Warren10 Attributes of a Successful Innovative Company-3AttributeDefinitionExampleSupportThe degree to which new ideas are welcomed from all sources and responded to promptly and appropriately“We encourage fresh ideas; we reward innovative individuals and teams”EngagementThe degree to which all levels of the organization are engaged with the customer and the operations of the organization“Management understands the operations of the company; I can share my problems with my managers; I know my job is important”StimuliThe degree to which it’s understood that unrelated knowledge can impact product, service, and operations improvements“I am encouraged to search externally for information and obtain data from many sources; we listen to suppliers’ suggestions”Chapter 9Financial StatementsFinancial AnalysisBudget ProjectionsCash Flow ForecastsBuilding the CultureHiring and FiringConflicts of Interest and EthicsLegal MattersCopyright 2015 Jack M. Kaplan & Anthony C. Warren10 Attributes of a Successful Innovative Company-4AttributeDefinitionExampleCommunicationThe degree to which there is both planned and random interaction between functions and divisions at all levels of the organization“I am kept in the picture on how we’re performing; we have excellent formal channels of communication; we use best practice knowledge transfer between our departments; we actively manage our intellectual assetsDoes your leadership style exhibit these attributes?Work on demonstration each of these EVERY dayA vibrant culture results from top-down leadershipChapter 9Financial StatementsFinancial AnalysisBudget ProjectionsCash Flow ForecastsBuilding the CultureHiring and FiringConflicts of Interest and EthicsLegal MattersCopyright 2015 Jack M. Kaplan & Anthony C. WarrenHiringYour company is only as good as the people that you hireUse networks to access potential hiresBeware hiring friends and family membersHire to match your cultureValues are inherent, skills can be learnedIf in doubt, don’t hire for expediencyChapter 9Financial StatementsFinancial AnalysisBudget ProjectionsCash Flow ForecastsBuilding the CultureHiring and FiringConflicts of Interest and EthicsLegal MattersCopyright 2015 Jack M. Kaplan & Anthony C. WarrenInterviewingBe prepared and punctualRelax the candidate by telling YOUR storyClearly establish the cultural values of the companyInvite them to tell their story Explore values, creativity and ambitionsUse open-ended questions, challenge, change topicsInvite their questions before summarizingRecord impressions immediatelyAct promptly whether no or yes Check references if a hire is contemplatedSeek second opinion if possibleChapter 9Financial StatementsFinancial AnalysisBudget ProjectionsCash Flow ForecastsBuilding the CultureHiring and FiringConflicts of Interest and EthicsLegal MattersCopyright 2015 Jack M. Kaplan & Anthony C. Warren5 Reasons to Fire an EmployeeThe company is short of fundsThe company is changing direction and no longer needs their specific skillsRepeated poor performanceDisruptive behaviorFor actual causeChapter 9Financial StatementsFinancial AnalysisBudget ProjectionsCash Flow ForecastsBuilding the CultureHiring and FiringConflicts of Interest and EthicsLegal MattersCopyright 2015 Jack M. Kaplan & Anthony C. WarrenFiring ProceduresTry to avoid surprises. Have a warning system. It is better to help someone perform better than to fire themWhen there is no alternative, act promptlyRemind them of their contractual obligationsIf you have to fire someone, keep the discussions unemotional, and try to retain trustIf possible, allow them to preserve their self-esteem Offer to help if appropriateAsk them to leave the premises immediately“The day you enjoy firing someone, its time to leave yourself”Chapter 9Financial StatementsFinancial AnalysisBudget ProjectionsCash Flow ForecastsBuilding the CultureHiring and FiringConflicts of Interest and EthicsLegal MattersCopyright 2015 Jack M. Kaplan & Anthony C. WarrenDealing with a Key Person ResignationAgree the procedures for hand-overAvoid taking it personallyKeep the door open, you may want to re-hire them laterCelebrate and let everyone know that you regret the decision but you wish them successConduct an exit interviewRemind them of their contractual obligationsAnalyze what went wrong – learn.Chapter 9Financial StatementsFinancial AnalysisBudget ProjectionsCash Flow ForecastsBuilding the CultureHiring and FiringConflicts of Interest and EthicsLegal MattersCopyright 2015 Jack M. Kaplan & Anthony C. WarrenConflicts of InterestBe continually aware that you may slip into a “conflict of interest” situationCarefully analyze any situation where a conflict may ariseEven if there is no real conflict, others may not understand – make a point of explaining the issues and your positionTake steps to resolve any perceived or actual conflict quicklyChapter 9Financial StatementsFinancial AnalysisBudget ProjectionsCash Flow ForecastsBuilding the CultureHiring and FiringConflicts of Interest and EthicsLegal MattersCopyright 2015 Jack M. Kaplan & Anthony C. WarrenThree Steps to Resolve Ethical DilemmasThe “Gut-feel” test. If you have a feeling that there is a conflict or ethical issue, then there most likely is. Don’t try to hide it – deal with it.Stake-holder analysis. There are no GRAY or FUZZY LINES. Understand who is affected, how, and what obligations all parties have to each other.Full Disclosure. Expose and discuss the issues and concerns with ALL possible affected stakeholders. If in doubt, tell more parties than less, and provide more information, not less. Chapter 9Financial StatementsFinancial AnalysisBudget ProjectionsCash Flow ForecastsBuilding the CultureHiring and FiringConflicts of Interest and EthicsLegal MattersCopyright 2015 Jack M. Kaplan & Anthony C. WarrenKey Legal Documents -Employment AgreementEvery employee should execute this agreement which must contain at least these five obligations: - Confidentiality during and after employment - Return all company materials when they leave - Cannot work for another business - Cannot compete while employed or for an agreed period after leaving - All inventions must be assigned to the company Chapter 9Financial StatementsFinancial AnalysisBudget ProjectionsCash Flow ForecastsBuilding the CultureHiring and FiringConflicts of Interest and EthicsLegal MattersCopyright 2015 Jack M. Kaplan & Anthony C. WarrenKey Legal Documents -Consulting AgreementWork-for-hire requirementAll work output belongs to the companyConfidentiality is requiredProject is clearly definedConsultant must keep records of time spent and out-of-pocket expensesCompany is not responsible for insurances and taxes other than those required by the lawChapter 9Financial StatementsFinancial AnalysisBudget ProjectionsCash Flow ForecastsBuilding the CultureHiring and FiringConflicts of Interest and EthicsLegal MattersCopyright 2015 Jack M. Kaplan & Anthony C. WarrenKey Legal Documents –Separation AgreementUsed when an employee leaves voluntarily or is firedRe-define both parties obligations with regard to confidentialityRe-assert non-compete obligations with specific terms and conditionsAgree and define any public statements that either may makeGeneral release from all other future legal obligations by both partiesChapter 9Financial StatementsFinancial AnalysisBudget ProjectionsCash Flow ForecastsBuilding the CultureHiring and FiringConflicts of Interest and EthicsLegal MattersCopyright 2015 Jack M. Kaplan & Anthony C. WarrenKey Legal Documents –Sales and Marketing AgreementAn agreement between two companies, one of which will market and sell the products or services of the otherImportant to clearly define the responsibilities of both partiesExclusive or not?Define products, pricing, payments, regions, commissions, publicity, quality, support etc.State term, renewable options, and terminatioin proceduresChapter 9Financial StatementsFinancial AnalysisBudget ProjectionsCash Flow ForecastsBuilding the CultureHiring and FiringConflicts of Interest and EthicsLegal MattersCopyright 2015 Jack M. Kaplan & Anthony C. WarrenKey Legal Documents -Confidentiality AgreementEntered into between two or more parties to protect exchange of information needed to explore a possible business relationshipMay protect the information of one or more partiesDefines the information to be disclosed and procedures for its treatment and returnThe term for confidentiality must be stated together with legal ramifications if the confidentiality is breachedAlso known as a “Non-Disclosure Agreement”Chapter 9Financial StatementsFinancial AnalysisBudget ProjectionsCash Flow ForecastsBuilding the CultureHiring and FiringConflicts of Interest and EthicsLegal MattersKey Legal Documents – Stock Option AgreementUsed to incentivize key employeesComponent of compensation that can help preserve cash reservesOnly available to employees of the companyTwo forms, ISO and NSO – differ in their tax implicationsNeed to be approved by board and stock-holdersUsual to set aside 10-15% of the outstanding shares of the company held in a pool for future key employees – this must be disclosed and approved by potential investorsThe tax implications can be complex and the entrepreneur should get professional advice when setting up the plan.Copyright 2015 Jack M. Kaplan & Anthony C. WarrenChapter 9Financial StatementsFinancial AnalysisBudget ProjectionsCash Flow ForecastsBuilding the CultureHiring and FiringConflicts of Interest and EthicsLegal MattersCopyright 2015 Jack M. Kaplan & Anthony C. WarrenFinal PointsA young company should try to minimize its legal costs as they can rapidly escalateBut it is important that the legal affairs of the company are well managedLearn to use free legal documents whenever possible, but if in doubt, seek legal counselDevelop a relationship with a law firm that has experience with young companies – often they will reduce their fees in the hope that you will be a large client sometime in the futureA good law firm can be invaluable in providing sound advice and access to their networks.Chapter 9Financial StatementsFinancial AnalysisBudget ProjectionsCash Flow ForecastsBuilding the CultureHiring and FiringConflicts of Interest and EthicsLegal Matters