controlling in the wood products industry - boku.ac.at · log costs variable costs ts. 15 spring...
TRANSCRIPT
Controlling in the Wood Products Industry
SS 2018 Albert Sickl
Spring 20182
Module 2Take aways from Module 1
“FROM BEAN COUNTER TO BUSINESS PARTNER”
– Role of the controller is changing. More complexity in a fast moving
environment.
– From reporter of history to analyzer of the future.
– Four roles
– Accounting manager & part of Management Team
– Strategic controller (delivering the strategy)
– Impartial controller (protecting company values)
– Operational controller (month-end close, forecasting)
– Business partner who can still act as critical controller!
Spring 20183
Module 2Basic Tools
Financial Concepts:
– Efficiency in value creation (ROCE > WACC)
– Strength to cope with uncertainty (D/E, Equity ratio)
– Ability to reward stakeholders (Cash)
MUST REQUIREMENT: Ability to cope with all three dimensions
Spring 20184
Module 2Basic Tools
The magic triangle regarding the financial body:
Profit & Loss Statement (…the muscles)
Cash Flow (…the blood)Balance Sheet (…the bones)
KPIs
Spring 20185
Module 2Basic Tools – Income Statement or P&L
– One of the major financial statements beside Balance Sheet and Cash Flow Statement.
– “Muscles” of the financial body.
– Shows the profitability of a company during a PERIODE of time, i.e. information about a
company's ability – or lack thereof – to generate profit by increasing revenue, reducing
costs, or both.
– It does not show cash receipts (money you receive) nor cash disbursements (money
you pay out). The profit-&loss statement measures profitability, not cash flow!
– Prepared monthly, quarterly and / or annually.
– Two formats:
– Total Expenditure Format (Gesamtkostenverfahren)
– Cost of Sales Format (Umsatzkostenverfahren)
Spring 20186
Module 2Basic Tools – Income Statement or P&L
Total Expenditure Format (Gesamtkostenverfahren)
• Shows the total performance and all costs for a selected period with change in inventories
• Expenses are shown according to their origin (material, personnel, maintenance, etc.)
Regarding 1) Financial result, 2) extraordinary items and 3) taxes, both methods have the
same structure and results.
Log consumption (60.000fm) x Yield (50%) = Production of the period (30.000m³)
Invoicing of the period (25.000m³)
Change in Inventory (+5.000m³)
Log price 100€/fm 6.000.000€ Log costs
Spring 20187
Module 2Basic Tools – Income Statement or P&L
Cost of Sales Format (Umsatzkostenverfahren)
• Shows the cost of goods sold (COGS) for a selected period
• Expenses are shown according to functions (production, general & administration, sales)
Regarding 1) Financial result, 2) extraordinary items and 3) taxes, both methods have the
same structure and results.
Invoicing of the period (25.000m³)
NO change in Inventory
Yield (50%) Log consumption 50.000fm
Log price 100€/fm 5.000.000€ Log costs
Spring 20188
Module 2Basic Tools – Income Statement or P&L
Operative Income statement and Key figures
Brand Sawn (EUR)
Jan
Sales 1.000
Change in Finished Goods Inventory & WIP 50
Other Operating Income Ext
Wood costs, variable Total
Energy costs Total
End Product Purchases Total
Chemical & filler costs
Other operating variable costs Total
Variable Costs -500
Personnel costs
Maintenance materials & services costs
Other fixed costs
Fixed costs -100
EBITDA 450
Planned depreciations -50
Profit/Loss on Disposal
Operating Profit / Loss (EBIT) 400
Spring 20189
Module 2Basic Tools – Income Statement or P&L
– Contribution margin (Deckungsbeitrag):
The contribution margin is the amount that remains of our sales after deducting all
variable costs. It is used to cover fixed costs and eventually to make profits.
Gross Sales
- Sales deductions (rebates, cash discounts,..)
Net sales
- Freight costs, Commissions,..
- Variable Costs .
Contribution margin
– Can also be expressed as %-age of sales, i.e. a contribution margin of 15%
indicates that out of 1Euro sales, 15 cents remain for coverage of fixed costs
– Contribution margin can also be shown in several steps by allocating fixed costs to
articles, article groups, business areas,…
Contribution
Margin to
cover Fixed
costs
Gro
ss S
ale
s
(Re
ve
nu
es)
Rebates, CD
Energy, Freight
Log costs
Variable Costs
Spring 201810
Module 2Basic Tools – Income Statement or P&L
Practical Example VBW:
Opern- und Musicalproduktionen in drei Häusern: Theater a.d. Wien (TAW),
Raimund Theater (RAI), Ronacher (RON)
Besucher: RON: 150.000; RAI 250.000; TAW 80.000
Kosten Intendanz: Musical: 600.000€; Oper: 500.000€
Leading Team Kosten: RON: 300T€; RAI: 350T€; TAW: 500T€
Produktionsausstattung:
RON: Bühne (450T€); Ton (50T€); Licht (50T€); Kostüm (200T€)
RAI: Bühne (500T€); Ton (50T€); Licht (50T€); Kostüm (200T€)
TAW: Bühne (600T€); Ton (50T€); Licht (50T€); Kostüm (300T€)
Personalkosten Haustechnik: RON: 25 Personen; RTH: 30 Personen; TAW: 20
Personen (durchschnittliche Kosten: 60.000€ / Person)
Orchester: RON: 10 Personen; RAI: 15 Personen; TAW: 20 Personen
(Durchschnittskosten pro Person: 60.000€)
Spring 201811
Module 2Basic Tools – Income Statement or P&L
Practical Example VBW:
Opern- und Musicalproduktionen in drei Häusern: Theater a.d. Wien (TAW),
Raimund Theater (RAI), Ronacher (RON)
Technik (produktionsbezogene Überstunden): RON: 10.000h; RAI: 12.000h;
TAW: 6.000h (durchschnittliche Kosten: 30€/h)
Marketing (produktionsbezogen): RON: 300T€; RTH: 450T€; TAW: 600T€
Hausbezogener Materialaufwand: RON: 400T€; RTH: 350T€; TAW: 300T€
Durchschnittlicher Ticketpreis: RON: 45€; RAI: 50€; TAW 60€
Personalkosten FM Haus: RON: 25 Personen; RTH: 30 Personen; TAW: 20
Personen (durchschnittliche Kosten: 40.000€ / Person)
Cast: RON: 2.750T€; RAI: 3.125T€; TAW: 2.000T€
Overhead: Sonstiger Aufwand (Material, bezogene Leistungen): 2.500T€;
Zentrale Technik: 1.000T€; Zentrales FM: 700T€; Generaldirektion: 1.500T€
Spring 201812
Module 2Basic Tools – Income Statement or P&L
Ronacher Raimund Theater a.d. Wien TOTAL
Besucher
Gross Sales
Leading Team
Ausstattung
Cast
Orchester
Technik Produktion
Marketing
DB I (Produktion)
Erträge Haus 20.000 60.000 20.000 100.000
Materialaufwand
Technik Haus
Facility Management Haus
DB II (Haus)
Intendanz
DB III (Sparte)
Sonstiger Aufwand
Technik zentral
Facility Management zentral
Generaldirektion
DB IV (Betriebserfolg)
Finanzerfolg 200.000
Profit / Loss
200.000
Musical Opera
Ronacher Raimund Theater a.d. Wien TOTAL
Besucher 150.000 250.000 80.000
Gross Sales 6.750.000 12.500.000 4.800.000 24.050.000
Leading Team -300.000 -350.000 -500.000 -1.150.000
Ausstattung -750.000 -800.000 -1.000.000 -2.550.000
Cast -2.750.000 -3.125.000 -2.000.000 -7.875.000
Orchester -600.000 -900.000 -1.200.000 -2.700.000
Technik Produktion -300.000 -360.000 -180.000 -840.000
Marketing Produktion -300.000 -450.000 -600.000 -1.350.000
DB I (Produktion) 1.750.000 6.515.000 -680.000 7.585.000
Erträge Haus 20.000 60.000 20.000 100.000
Materialaufwand -400.000 -350.000 -300.000 -1.050.000
Technik Haus -1.500.000 -1.800.000 -1.200.000 -4.500.000
Facility Management Haus -1.000.000 -1.200.000 -800.000 -3.000.000
DB II (Haus) -1.130.000 3.225.000 -2.960.000 -865.000
Intendanz -300.000 -300.000 -500.000 -1.100.000
DB III (Sparte) -3.460.000 -1.965.000
Sonstiger Aufwand -2.500.000
Technik zentral -1.000.000
Facility Management zentral -700.000
Generaldirektion -1.500.000
DB IV (Betriebserfolg) -7.665.000
Finanzerfolg 200.000
Profit / Loss -7.465.000
Musical Opera
-7.665.000
1.495.000
-2.500.000
-1.000.000
-700.000
-1.500.000
200.000
-7.465.000
Spring 201813
Module 2Basic Tools – Income Statement or P&L
Practical example – Stora Enso:
1) How big is the contribution
margin?
2) How big is the margin %-age?
Operative Income statement and Key figures
Stora Enso GmbH
Sales 102.421
Change in Finished Goods Inventory & WIP 411
Other Operating Income Ext 29
Wood costs, variable Total -64.226
Energy costs Total -2.119
End Product Purchases Total -869
Chemical & filler costs 0
Other operating variable costs Total -420
Variable Costs -69.289
Personnel costs -10.576
Maintenance materials & services costs -1.551
Other fixed costs -5.448
Fixed costs -17.575
EBITDA 7.971
Planned depreciations -901
Profit/Loss on Disposal 0
Operating Profit / Loss (EBIT) 7.070
Spring 201814
Module 2Basic Tools – Income Statement or P&L
– Break-Even Analysis: The break-even point defines the sales
volume which is needed to cover all costs, i.e. neither produces a
profit nor a loss.
Break Even Point means:
Profit = 0
Fixed costs = Total contribution margin
Revenues = Total costs
Profitability increase by:
– Increase of Sales
– Improvement of Contribution Margin (price increase, reduction of
variable costs, improved product mix)
– Reduction of Fixed costs
Fixed costs
Gro
ss S
ale
s
(Re
ve
nu
es)
Rebates, CD
Energy, Freight
Log costs
Variable Costs Tota
l Costs
Spring 201815
Module 2Basic Tools – Income Statement or P&L
– Break-Even Analysis:
Break Even Point (Vol) = Fixed costs / Contribution margin per piece
Break Even Point (Value) = Fixed costs / Contribution margin %-age
Safety margin [value] = (Planned sales-Minimum sales) / Planned sales * 100
Safety margin [volume] = (Planned volume-Minimum volume) / Planned volume * 100
Targeted Turnover = (Fixed costs + Profit) / Contribution margin %-age
Spring 201816
Module 2Basic Tools – Income Statement or P&L
Example 2:
A company has the following planned parameters:
Sales volume: 2.000 bicycle shoes
Production volume: 2.300 shoes
Variable costs/shoe: 120EUR
Net sales / shoe: 180EUR
Fixed costs: 110.000EUR
1) How big is the minimum sales value?
2) How big is the minimum sales volume?
3) What are the safety margins?
4) Return of Sales?
5)The owner's target is a profit of 9TEUR. Which turnover is necessary?
6) How much additional sales are necessary if a new sales rep is employed for 25.000EUR p.a.?
7) The head of sales suggests a 5% price decrease. How many % more sales is the minimum requirement?
Spring 201817
Module 2Basic Tools – Income Statement or P&L
Sales 2.000
Production 2.300
Kvar/piece 120
Net sales 180
Fixed costs 110.000
BEP val 330.000 EUR
BEP vol 1.833 shoes
Safety margin val 8,33 %
Safety margin vol 8,33 %
ROS 2,78 %
Q5: 357.000 EUR
Q6: 75.000 EUR
Q7: value-wise 11,76 %
Q7: volume-wise 17,65 %
Spring 201818
Module 2Basic Tools – Income Statement or P&L
Practical example – Stora Enso:
1) Minimum sales value?
2) Minimum sales volume?
3) Safety margins?
4) ROS?
Wages and Salaries, Production
Wages and Salaries, Maintenance
Wages and Salaries, Admin
Personnel costs
Maintenance Materials Total
Maintenance Services
Maintenance materials & services costs
Other fixed costs, excl. production cost Total
Other fixed costs, incl. in production cost Total
Contractors costs (log/truck/other)
Other fixed costs, admin
Other fixed costs, cost pool
Bad debts and credit losses
Wood proc related fixed
Other fixed costs total
Total fixed costs, CUR
-254
-44
-27
-324
-45
-3
-48
-8
-257
0
-8
-115
-66
0
-454
-826
Total invoicing, m3 6.814
Mill net price Total wo hedging CUR/m3 (ext) 429,38
Total variable costs, CUR -306,69
Spring 201819
Module 2Basic Tools – Income Statement or P&L
Plan P&L Example 3:
A company has the following planned parameters:
Production volume: 8.100 aero-helmets
Sales volume: 8.000 aero-helmets
Net sales / helmet: 240EUR
Production time / helmet: 15min
Production wages / hour: 130EUR
Overhead production costs: 100%
Production materials / helmet: 28EUR
Overhead production materials / helmet: 3EUR
Basis for overhead material costs are production materials and for overhead production
costs the production wages.
Fixed costs: Personnel 150.000EUR
Other fixed costs 100.000EUR
Depreciation 190.000EUR
Interest costs 60.000EUR
1)Establish a plan P&L (Gesamtkostenverfahren)
2)Calculate the ROS
Spring 201820
Module 2Basic Tools – Income Statement or P&L
Spring 201821
Module 2Basic Tools – Kostenarten (Cost elements), Kostenstellen (Cost centers), Kostenträger (Cost unit)
Konten / Kostenarten (Cost Elements): Kategorisierung nach der Natur der Kosten
Exkurs: Österreichischer Kontenrahmen
Kontenklasse:
0 Anlagevermögen
1 Vorräte und unfertige Aufträge Bestandskonten
2 Sonstiges UV und RAP
3 Verbindlichkeiten, RSt, RAP
4 Betriebliche Erträge
5 Materialaufwand und Aufwand für bez Leistungen
6 Personalaufwand Erfolgskonten
7 Abschreibungen und sonst betr Aufwendungen
8 Finanzkonten, Ao Erträge / Aufwendungen, Steuern
9 Kapitalkonten, Abschlußkonten
Spring 201822
Module 2Basic Tools – Kostenarten (Cost elements)
Konten / Kostenarten (Cost Elements): Kategorisierung nach der Natur
Spring 201823
Module 2Basic Tools – Kostenarten (Cost elements)
Konten / Kostenarten (Cost Elements): Kategorisierung nach der Natur
Spring 201824
Module 2Basic Tools – Kostenarten (Cost elements)
Konten / Kostenarten (Cost Elements): Kategorisierung nach der Natur
Spring 201825
Kostenträger (Cost Units): Wofür sind die Kosten angefallen?
RON
Produktion mit der Endung
12 - bis zur Premiere inkl. Audition
13 - ab (einschließlich) Premiere
51 - Premieren- und Dernièrefeiern
52 - Merchandising
54 - Tonträger
z.B. Tanz der Vampire 3310512
Profit Center Mapping
Stora Enso Wood Products CEU
SAP Company code Profit Center
160 68037 Brand Mill
68038 Brand Post
68237 Ybbs Mill
68238 Ybbs Post
68239 Ybbs CLT
68537 Sollenau Mill
68780 Wood Products Head Office
161 68837 BSL Sawn
68838 BSL CLT
162 68938 SE WP Holzverarb.
Module 2Basic Tools – Kostenarten (Cost elements), Kostenstellen (Cost centers), Kostenträger (Cost unit)
Spring 201826
Kostenträger (Cost Units): Wofür sind die Erträge / Aufwendungen angefallen?
Module 2Basic Tools – Kostenträger (Cost unit)
Kostenträger 1 Kostenträger 2
Spring 201827
Module 2Basic Tools – Kostenarten (Cost elements), Kostenstellen (Cost centers), Kostenträger (Cost unit)
Kostenstellen (Cost Centers): Wo sind die Kosten angefallen?
6871206 Management
6871211 Construction
6871212 Post & Beam
6871213 Sales office CE
6871214 Light Frame
6871215 Joinery
6871216 Sales SEA
6871217 BL Trading
6871218 Sales administration team
2600 Marketing
2612 Publikationen (Printwerbung)
2613 Aussenwerbung (Plakate)
2614 Medien
2601 Grafik
2604 Kooperationen
2605 Hilfskräfte / Verteiler
2606 Marktforschung
Spring 201828
Module 2Basic Tools – Kostenstellen (Cost centers)
Kostenstellen (Cost Centers): Wo sind die Kosten angefallen?
Spring 201829
Module 2Basic Tools – Income Statement or P&L – Value Creation and Value Capturing
Perceived Value Costs Value Comp.
benefit created created discount
Quality
Functions/
Reliability
Services
Logs
Personnel
Maintenance
Other
Profit
Price
Company's ability –
or lack thereof – to
generate profit by
increasing revenue,
reducing costs, or
both.
Spring 201830
Module 2Basic Tools – From Operations to Profits
Business Model
Income Statement or P&L
Spring 201831
Module 2Basic Tools – Balance Sheet (B/S)
– One of the major financial statements beside Income Statement
and Cash Flow Statement.
– “Bones” of the financial body.
– Shows the assets and liabilities of a company at a single POINT of
time. “Snapshot of a company's financial condition.”
– Prepared monthly, quarterly and / or annually.
– A standard B/S has three parts:
– Assets
– Liabilities
– Equity
Spring 201832
Module 2Basic Tools – Balance Sheet (B/S)
– ASSETS:
– The left-hand side of a B/S shows how a company uses the
capital given by owners (equity) or external sources (debt). The
assets represent things of value that a company owns and has
in its possession or something that will be received.
– Fixed assets are expected to remain in the use of the
company for a longer period of time (> 1 year).
– Current assets are not expected to remain long in the use
of the company (consumed within 1 year).
Spring 201833
Module 2Basic Tools – Balance Sheet (B/S)
– EQUITY & LIABILITIES:
– The right-hand side of a B/S shows where the capital of a
company comes from or in other words how the assets are
financed (equity, debt).
– Liabilities are those funds that a company owes to other
external sources. They are used to finance operations and
pay for expansions.
– Equity represents retained earnings and funds contributed
by the company's shareholders.
Spring 201834
Module 2Basic Tools – Balance Sheet (B/S)
The fundamental B/S equation:
ASSETS = EQUITY + LIABILITIES
– The equation HAS to be always in balance!
– A reasonable mix of equity and liabilities is a must for a financially
healthy company.
Example: Components of the Balance Sheet
Spring 201835
Module 2Basic Tools – Balance Sheet (B/S)
Current
Assets
Invest-
ments
Fixed
Assets
Current
Liabilities
Lt
Liabilities
Equity
How we use our money Where the money comes from
Land
Plant
Equipment
Replacement / Development
Strategic
Accounts receivables
Inventories
Cash
Share Capital
Retained Earnings
Lt Accruals (Pensions,..)
Lt Loans
Accounts payables
St Borrowings
Spring 201836
Module 2Basic Tools – Balance Sheet (B/S)
– Working Capital:
Delta between current assets and current liabilities.
Liquidity indicator: Shows the ability of a company to cover current liabilities
out of its current assets.
– Management approach:
Inventories
+ Accounts receivables
- Accounts payables
Working Capital
Lean working capital management means among others:
decreased costs (inventory space,…)
reduced bad debts
increased cash flow
Inventories:
Finished
Goods and
Work in
Progress
Operating
Working Capital
Accounts
Receivables
Accounts
Payables
Spring 201837
Module 2Basic Tools – Balance Sheet (B/S)
– Working Capital / Inventories:
“Trade-off Model“,
=> while focusing on one item, e.g. Lead Time, another item might be
impacted as a result of the previous change
Inventory InformationCapacity
Lead Time
Demand
Spring 201838
Module 2Basic Tools – Balance Sheet (B/S)
– Working Capital / Inventories:
Spring 201839
Module 2Basic Tools – Balance Sheet (B/S)
– Working Capital / Accounts receivables:
– A tight receivables management is more than ever important to
prevent revenue leakage and bad debts to occur!
– Sales is interested in selling (and not in administration of
outstanding receivables…).
– Payment terms need to be managed efficiently and reviewed
periodically.
– Cash discounts are expensive tools and need to be handled
restrictively.Example:
Effective cash discount rate = Cash discount rate * 360 / (Term for payment – Cash discount period)
Spring 201840
Module 2Basic Tools – Balance Sheet (B/S)
– Working Capital / Accounts receivables:
WP overdues by days31.12.2017 € thousand
Month 1 - 3 4 -14 15 - 30 31 - 60 61 - 90 91 - 120 120 Total O/D All rec O/D %Dec 16 3.998 4.897 1.138 524 79 2 32 10.673 107.093 9,97%
Jan 17 2.934 1.774 1.847 1.818 142 54 22 8.590 117.010 7,34%
Feb 17 1.011 2.133 854 217 21 56 39 4.333 128.606 3,37%
Mar 17 1.911 2.251 1.085 307 25 1 31 5.619 147.932 3,80%
Apr 17 3.809 2.850 1.164 356 92 13 30 8.320 150.334 5,53%
May 17 2.047 2.431 895 282 150 2 38 5.851 154.476 3,79%
Jun 17 3.075 2.304 808 360 100 0 28 6.686 155.978 4,29%
Jul 17 4.985 2.663 1.320 483 201 50 27 9.725 141.490 6,87%
Aug 17 2.249 2.205 1.558 693 243 135 26 7.118 131.362 5,42%
Sep 17 3.059 2.181 2.647 179 72 60 13 8.216 146.278 5,62%
Oct 17 3.235 2.835 799 1.108 91 23 65 8.166 153.172 5,33%
Nov 17 1.968 2.860 812 590 231 63 84 6.619 153.019 4,33%
Dec 17 6.011 3.360 2.233 521 337 3 131 12.603 128.930 9,78%
AVG 17 3.025 2.487 1.335 576 142 38 45 7.654 142.382 5,38%
AVG 16 3.259 2.572 1.425 527 122 55 97 8.063 132.370 6,09%
AVG 15 3.018 3.381 1.834 1.479 723 578 636 11.649 137.512 8,47%
AVG 14 4.075 4.735 3.563 1.768 917 229 216 15.102 155.478 9,71%
Spring 201841
Module 2Basic Tools – From Operations to Profits
Business Model
Income Statement or P&L and
Balance Sheet
Spring 201842
Module 2Basic Tools – Cash Flow (CF)
– One of the major financial statements beside Income Statement
and Balance Sheet.
– “Blood” of the financial body.
– Shows the flow of cash in and cash out of the business. It reflects
a company's liquidity during a PERIODE of time.
– Prepared monthly, quarterly and / or annually.
– A standard Cash Flow statement has three parts:
– CF from operating activities
– CF from investing activities
– CF from financing activities
Spring 201843
Module 2Basic Tools – Cash Flow (CF)
Spring 201844
Module 2Basic Tools – Cash Flow (CF)
“Cash is King!”
A lot of capital is usually tied up in receivables and inventory.
Importance to optimize working capital level becomes more evident than
in the past.
Longer term, companies need to create a culture in which everyone takes
responsibility for the balance sheet!
There are six common mistakes that companies make in managing cash:
1. Don't manage to the income statement.
2. Don't reward the sales force for growth alone.
3. Don't overemphasize production quality.
4. Don’t tie receivables to payables.
5. Don’t manage by current and quick ratios.
6. Don’t benchmark competitors.
Spring 201845
Module 2Basic Tools – From Operations to Profits
Business Model
Income Statement or P&L and
Balance Sheet and Cash Flow Statement
Spring 201846
Module 2Basic Tools – Cash Flow (CF)
– A CF-statement is tied to the P&L and B/S via net earnings and
depreciation (P&L) on the one side and via working capital, fixed asset
investments, etc. (B/S) on the other side.
P&L:
Sales
+/- Change in inv
- Variable costs
- Fixed costs
- Depreciation
= Operating Profit
B/S:
Fixed Assets Equity
Inventories Accruals
Trade Receivables Trade payables
CF:
Operating Profit
+ Depreciation
+/- Change in inventories
+/- Change in Receivables
+/- Change in Payables
Spring 201847
Module 2Basic Tools – CF & B/S
Finanzplan & Planbilanz Example:
A company has the following planned parameters:
Planned P&LSales 16.000.000
- var costs: Materials: 3.200.000
Material overheads 480.000
Wages & Salaries 4.500.000
Production overheads 4.620.000
Contribution margin 3.200.000
Profit from disposal of assets 50.000
- fixed costs: Depreciations 560.000
Other fixed costs 1.790.000
EBIT 900.000
Income from shares 60.000
Depreciation of financial assets -40.000
Interest expenses -120.000
Financial result -100.000
Profit before taxes 800.000
Income taxes -200.000
Profit / Loss for the period 600.000
Spring 201848
Module 2Basic Tools – CF & B/S
Finanzplan & Planbilanz Example:A company has the following planned parameters:
B/S: 31.12. prior year
Fixed Assets 5.750.000 Equity 4.000.000
Inventory
Raw mat
Fin goods
1.200.000
900.000
Retained
earnings
890.000
Accounts
receivables
1.500.000 Profit of the
year
420.000
Cash /
banks
230.000 Accruals 880.000
Accounts
payables
1.200.000
Liab banks LT 2.100.000
Liab banks ST 90.000
Total Assets 9.580.000 Total Liabilities 9.580.000
Spring 201849
Module 2Basic Tools – CF & B/S
Finanzplan & Planbilanz Example:A company has the following planned parameters:
•Raw material purchases: 3.100.000
•Trade receivables turnover: 13,33 (including 20% VAT)
•Trade payables are reduced by 150.000EUR
•The plan P&L includes a LT accrual of 80.000EUR (Abfertigung &
Pensionen)
•An investment of a machine (900.000EUR) is planned. 1/3 is financed
by a new loan. Depreciations are included in the plan P&L.
•LT Loans of 130.000EUR have to be paid back in the planning period.
•Retained earning (Gewinnrücklage) of 48.000EUR should be booked.
•A dividend of 400.000EUR is to be paid.
•A positive or negative liquidity should be used to balance ST bank
accounts.LT…long-term
ST…short-term
Spring 201850
Module 2Basic Tools – CF & B/S
Planned Cash Flow
Profit / Loss for the period
Depreciations:
Fixed Assets
Financial Assets
Profit from Asset disposal
LT accruals
Funds from operations
Inventories
Accounts receivables
Change in other assets
Change in ST accruals
Accounts payables
Change in other liabilities
CF operating activities
Investments
Profit from Asset disposal
CF investing activities
Dividends paid
Loans
CF financing activities
Total Change: Liquidity
600.000
560.000
40.000 600.000
-50.000
80.000
1.230.000
100.000
300.000
0
-150.000
0
1.480.000
-900.000
50.000
-850.000
-400.000
300.000
-130.000 170.000
-230.000
400.000
Spring 201851
Module 2Basic Tools – CF & B/S
Planned B/S
Assets
Fixed Assets
Inventories
Finished Goods
Acc receivables
Cash at banks
Liabilities
Equity
Retained earnings
Profit of the year
Accruals
Acc payables
Liab banks LT
Liab banks ST
5.750.000
900.000
-560.000
-40.000 6.050.000
1.200.000
3.100.000
-3.200.000 1.100.000
900.000
1.500.000
-300.000 1.200.000
230.000
-90.000
400.000 540.000
9.790.000
4.000.000
890.000
48.000 938.000
420.000
-400.000
600.000
-48.000 572.000
880.000
80.000
960.000
1.200.000
-150.000 1.050.000
2.100.000
300.000
-130.000 2.270.000
90.000
-90.000 0
9.790.000
Spring 201852
Module 2Basic Tools – Key Performance Indicators
Key performance indicators (KPIs) are high-level snapshots of a
business based on specific predefined measures.
KPIs should be:
Specific
Measurable
Acceptable
Realistic
Timely
Should reflect the critical success-factors of a company variations
between different industries possible.
Spring 201853
Module 2Basic Tools – Key Performance Indicators
Key performance indicators (KPIs) in the wood-products industry (example
Stora Enso):
KPIs connected to the P&L:
Return on Sales (ROS) = Operating Profit / Sales *100
Return on Capital Employed (ROCE) = Operating Profit / Operating capital *100
Personnel intensity = Personnel costs / Sales *100
Maintenance intensity = Maintenance costs / Sales *100
Raw material intensity = Raw material costs / Sales * 100
Spring 201854
Module 2Basic Tools – Key Performance Indicators
Key performance indicators (KPIs) in the wood-products industry (example
Stora Enso):
KPIs connected to the B/S:
Inventory turnover ratio = Sales or COGS / (Average) Inventory
Inventory turnover days = 365/ Inventory turnover ratio (also called DIOH)
Receivables turnover ratio = Net Sales / (Average) Accounts receivables
Receivables turnover days = 365 / Receivables turnover ratio (also called DSO)
Payables turnover ratio = Purchases / (Average) Accounts payables
Payables turnover days = 365 / Payables turnover ratio (also called DPO)
Working Capital turnover = Sales / Working Capital
Relationship between the money used to fund operations
and the sales generated from these operations.
Spring 201855
Module 2Basic Tools – Key Performance Indicators
Key performance indicators (KPIs) in the wood-products industry (example
Stora Enso):
KPIs connected to the B/S (continued):
Equity ratio = Owners equity / Total assets (Eigenkapitalquote)
Fixed Assets usage = accumulated depreciation / acquisition costs
(Anlagenabnützungsgrad)
Golden B/S rule: Fixed assets should be financed by equity (narrow) or equity +
long term liabilities (wider) (Goldene Bilanzregel)
Spring 201856
Module 2Basic Tools – Key Performance Indicators
Key performance indicators (KPIs) in the wood-products industry (example
Stora Enso):
KPIs connected to the CF:
Cash Flow margin = Operating Cash Flow / Sales * 100
Gearing ratios:
Debt / Cash Flow
Debt / Equity (also known as debt to equity ratio)
Cash Flow KPIs are currently not used in monthly reporting.
Spring 201857
Module 2Basic Tools – From Operations to Profits to Asset based Profitability
Business Model
Income Statement or P&L and
Balance Sheet and Cash Flow Statement
ROE and ROCE
Spring 201858
Module 2Basic Tools – From Operations to Profits to Asset based Profitability
Return on
Equity
Profit
Margin
Capital
Turnover
Leverage
Ratio
Net income
Equity
Net income
Revenues
Revenues
Assets
Assets
Equity
How good are
we in translating
revenues into
profits?
How many units
of sales can we
squeeze out of
one unit of
assets?
How much debt
(i.e. borrowed
resources) do we
use?
Spring 201859
Module 2Basic Tools – From Operations to Profits to Asset based Profitability
Operational
ROCE
Operating
Profit
Operating
Capital
100Higher ROCE means more efficient
use of Assets to generate earnings.
Spring 201860
Module 2Basic Tools – Value Creation
Provide Capital
Providers with a
reasonable rate of
return - WACC
Buy Capital
Assets ROCE
For each €Pay WACC Get ROCE
EVA = NOPAT – (Capital Invested x WACC)
EVA = (ROCE – WACC) * Capital Invested
EVA… Economic Value Added
NOPAT… Net operating profit after taxes
WACC… Weighted average cost of capital
ROCE… Return on capital employed
Sobald die Investitionsrendite (ROCE) die Kapitalkosten (WACC)
übersteigt, schafft eine Investition Wert.
Spring 201861
Module 2Basic Tools – From Operations to Profits to Asset based Profitability
Operating
Profit
Sales
Operating
Profit
Operating
Capital
ROCE
Sales
Operating
Capital
Sales
Assets
Sales
EBIT
Sales
Total Costs
Prices
Volume
Mix
Working
Capital
Fixed
Assets
Cash
Inventories
A/R
A/P
Var Costs
Fixed Costs
Strategic Drivers!!!
Spring 201862
Module 2Basic Tools – From Operations to Profits to Asset based Profitability
Operating
Profit
Sales
Operating
Profit
Operating
Capital
ROCE
Sales
Operating
Capital
Sales
Assets
Sales
EBIT
Sales
Total Costs
Prices
Volume
Mix
Working
Capital
Fixed
Assets
Cash
Inventories
A/R
A/P
Var Costs
Fixed Costs
Increase EBIT
Decrease Capital Employed
Spring 201863
Module 2Basic Tools
Financial Concepts:
– Efficiency in value creation (ROCE > WACC)
– Strength to cope with uncertainty (D/E, Equity ratio)
– Ability to reward stakeholders (Cash)
MUST: Ability to cope with all three dimensions
Spring 201864
Module 2Basic Tools – Key Performance Indicators
Appendix
Spring 201866
Module 2Basic Tools – Income Statement or P&L
Total Expenditure Format (Gesamtkostenverfahren)
1. Umsatzerlöse
2. Erhöhung oder Verminderung des Bestands an fertigen und unfertigen Erzeugnissen
3. andere aktivierte Eigenleistungen
4. sonstige betriebliche Erträge
5. Materialaufwand:
a) Aufwendungen für Roh-, Hilfs- und Betriebsstoffe und für bezogene Waren
b) Aufwendungen für bezogene Leistungen
6. Personalaufwand:
a) Löhne und Gehälter
b) soziale Abgaben und Aufwendungen für Altersversorgung und für Unterstützung, davon für
Altersversorgung
7. Abschreibungen:
a) auf immaterielle Vermögensgegenstände des Anlagevermögens und Sachanlagen
b) auf Vermögensgegenstände des Umlaufvermögens, soweit diese die in der
Kapitalgesellschaft üblichen Abschreibungen überschreiten
8. sonstige betriebliche Aufwendungen
BETRIEBSERFOLG
Spring 201867
Module 2Basic Tools – Income Statement or P&L
Cost of Sales Format (Umsatzkostenverfahren)
1. Umsatzerlöse
2. Herstellungskosten der zur Erzielung der Umsatzerlöse erbrachten Leistungen
3. Bruttoergebnis vom Umsatz
4. Vertriebskosten
5. allgemeine Verwaltungskosten
6. sonstige betriebliche Erträge
7. sonstige betriebliche Aufwendungen
BETRIEBSERFOLG8. Erträge aus Beteiligungen,
davon aus verbundenen Unternehmen
9. Erträge aus anderen Wertpapieren und Ausleihungen des Finanzanlagevermögens,
davon aus verbundenen Unternehmen
10. sonstige Zinsen und ähnliche Erträge, davon aus verbundenen Unternehmen
11. Abschreibungen auf Finanzanlagen und auf Wertpapiere des Umlaufvermögens
12. Zinsen und ähnliche Aufwendungen, davon an verbundene Unternehmen
13. Ergebnis der gewöhnlichen Geschäftstätigkeit
14. außerordentliche Erträge
15. außerordentliche Aufwendungen
16. außerordentliches Ergebnis
17. Steuern vom Einkommen und vom Ertrag
18. sonstige Steuern
19. Jahresüberschuß/Jahresfehlbetrag
Spring 201868
Module 2Basic Tools – Balance Sheet (B/S)
Spring 201869
Module 2Basic Tools – Balance Sheet (B/S)
Spring 201870
Module 2Basic Tools – Cash Flow (CF)
Jahresüberschuss/-fehlbetrag nach Steuern
+ Abschreibungen auf das Anlagevermögen
- Zuschreibungen zum Anlagevermögen
+/- Gewinn (-) / Verlust (+) aus dem Abgang von Anlagevermögen
+/- Zunahme (+) / Abnahme (-) lfr Rückstellungen
= Cash Flow aus dem Ergebnis (cash earnings)
+/- Zunahme (-) / Abnahme (+) der Vorräte
+/- Zunahme (-) / Abnahme (+) der Forderungen LuL
+/- Zunahme (-) / Abnahme (+) sonstiger Aktiva und ARA
+/- Zunahme (+) / Abnahme (-) der kfr Rückstellungen
+/- Zunahme (+) / Abnahme (-) der Verbindlichkeiten LuL
+/- Zunahme (+) / Abnahme (-) sonstiger Passiva und PRA
= Cash Flow Operating Activities
- Investitionen
- Aktivierte Eigenleistungen
+ Buchwert abgegangener Anlagen
+/- Gewinn (+) / Verluste (-) aus dem Abgang von Anlagevermögen
+/- Erhöhung (-) / Verminderung (+) der Finanzdarlehen an verbundene Unternehmen
= Cash Flow Investing Activities
+ Einzahlungen von den Gesellschaftern
- Auszahlungen an die Gesellschafter
+/- Erhöhung (+) / Tilgung (-) von Finanzkrediten und Anleihen
= Cash Flow Financing Activities
Veränderung des Finanzmittelbestandes