Download - Understanding Your Bottom Line (Cal Blanchard)

HindSite Software: 2009 Users Conference

Cal Blanchard

Find one number to focus on: COGS Labor

What is the industry standard?What are the top 10% doing?

HindSite UC 2009: Breakout Sessions

“The Fatal Assumption is:If you understand the technical work of a business, you understand a business that does technical work.” ~ Michael Gerber, E-Myth Revisited

“Suddenly the job (plumbing, fencing, etc.) he knew how to do so well becomes one job he knows how to do well plus a dozen others he doesn’t know how to do at all.”



1. Current 2. Quick (Acid test)3. Accounts Receivable turnover4. Inventory turnover5. Ratios are not a substitute for

judgment

Vertical Analysis: Common Size Averaging A means of evaluating each element in a

financial statement as a percentage of a single major account, usually net sales for the income statement and total assets for the balance sheet. (Mastering Financial Statement Analysis; AIPB)

Because dollar amounts can be misleading: Some expenses in dollar amounts may be

down, but may be up as a percentage of sales.



Also called “trend analysis”

Comparing financial statements from a base year to several subsequent years. Common-size income & balance sheet

statements


How do I qualify for a bank and loan?1. Is your banker using a collateral or cash

flow model?2. What is your system for tracking cash

flow? 3. Are you willing to learn the business

side of your business?4. What worked last year is not working

today!


What is cash flow?

What tools do you use?

Can you make payroll?


1. Work on you business2. Find one number to focus on.3. Use ratios to determine cash needs.4. Use Vertical Analysis to size things the

same.5. Use Horizontal Analysis to see where

you’re going.6. Bankers are looking for cash flow plus a

cushion.

Understanding Your Bottom Line, Calvin Blanchard


Download - Understanding Your Bottom Line (Cal Blanchard)

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