Optimising Financial Performance Seminar

Welcome to the

Richard J. Wood

MyCorporateDoctor.com.au

An Accounting Joke

Three accountants are sitting in a sauna. Suddenly there is a beeping sound. The first accountant presses his forearm and the beeping stops. The others look at him curiously. "That's my pager," he says, "I have a micro-chip under the skin of my arm.“

A few minutes later a phone rings. The second accountant lifts his palm to his ear. When he finishes he explains, "That's my mobile phone. I have a micro-chip in my hand."

An Accounting Joke

The third accountant, feeling decidedly low- tech, steps out of the sauna. In a few minutes he returns with a piece of toilet paper hanging from the crack of his butt. The others raise their eyebrows.

"Oh, excuse me he says. I'm getting a Fax."

How would you like to see the

financial impact of every business decision before

you made it?

MYOB ProfitOptimiser

Stages of Accounting

Collection

Recording

Summarising

Analysing

MYOB ProfitOptimiser is a financial software package that gives you the ability to:

• Perform what-if scenarios• Undertake goal seeking on a

performance measure• Produce variance reports• Understand financial statements in a

graphical format• Produce budgets and cash flow reports

What is MYOB ProfitOptimiser?

What is MYOB ProfitOptimiser?

• Begins where financial statements end• Identifies the key drivers of your profit, cash flow and balance sheet• Used by major trading banks• Great tool for both accounting and non accounting people such as sales & general managers• Better communication with staff, your accountant & the bank

What is the most effective way to improve cash flow?

What is the maximum sales growth your business can realistically sustain in the coming year?

What financial performance indicators are required to improve your financial, marketing and operational performance.

Key Business Questions

Which products and customers are profitable?

What is the impact on price and volume changes?

What is the effect of discounts, terms and stock levels on your business?

How do you combine multiple business units into one operating entity?

Key Business Questions

“The shift to new technology is the single most important factor behind businesses

accelerating productivity and growth.”

Merril Lynch Report

Mind Stimulation Exercise

Mind Reading

Please mentally select a card and concentrate on it.

Mind Reading

And now, shout thename of your card outloud.

Please don't skip thispart, it is veryimportant.

Mind Reading

I have selected your card and have removed it from the pile.

Surprised?

Let’s Take A Closer Look………….

Scenario 1

The Demo Company is a manufacturing company based in Sydney. The company has experienced cash flow and profitability problems in the past few years. The Directors wish to improve its cash flow and profitability.

The company’s current cash flow is negative $365,073 with a profitability rate of 11.64%.

How can the cash flow and profitability position be improved?

The MYOB ProfitOptimiser Reporting System

Scenario 2

The Directors of The Demo Company wish to monitor the change in revenue and profit from the financial years 2002 to 2003.

Which report is used to track comparisons in performance between financial years in MYOB ProfitOptimiser?

Can the business sustain its growth over the next financial year?

Which report can indicate if a business requires additional cash flow injection.

Scenario 3

The Demo Company’s short and long term debt position is currently $1,484,073 with a cash after operations amount of $90,954. The company is very concerned with this level of debt and wishes to decrease borrowed funds to $1,000,000.

How can the decrease in borrowed funds be achieved and what will the decrease impact upon?

To get a Return On Capital Employed

Or ROCE

Why go into business?

X

Measures Balance SheetManagement

Revenue

Net Operating Assets

EBIT

Revenue

MeasuresProfit and LossManagement

Components of ROCE

Scenario 4

The Demo Company needs to establish what its return on capital employed (ROCE) is for the financial year 2001.

Having established the current position of 17.30% the company wishes to increase ROCE to 30%.

How can the increase be achieved?

Scenario 5

The Demo Company wishes to implement a budget based on drivers of 70% in cost of goods sold, 100 days in receivables, 95 days in inventory with an increase of 10% revenue growth and a 5% price increase for the next financial year. The impact of this change must be reflected the the profit and loss statement and balance sheet.

How can this be achieved in MYOB ProfitOptimiser?

How Do We Use MYOB ProfitOptimiser

How Do We Use MYOB ProfitOptimiser In Our Business?

As a Bureau Service for our clients to improve financial performance and assist with finance applications.

We annualise and project financial data to the end of a specific reporting period (3,6 or 12 months).

The the 3 key financial drivers are then interpreted and analysed:

• Profitability

• Cash Flow

• Financial Growth

How Do We Use MYOB ProfitOptimiser In Our Business?

Working with our clients we devise what if scenarios to improve financial performance.

Goal Seeking is then performed to visualise future improvements.

Anticipated taxation position is then assessed and tax planning initiatives are implemented.

The agreed performance measures are documented for the client.

A follow up consultation is then arranged.

Loan Financing

A Practical Loan Scenario

BankReports Provided

Numerous interpretivephone calls

Paper basedapplication submitted

Client calls Bank to arrange loan

Conditional

Loan approved

Accountant provides financial

documentation

MYOB ProfitOptimiser is a simple to use, time saving tool that provides strategic analysis of your business

performance.

MYOB ProfitOptimiser provides a total financial scorecard on one

screen including what drives your business and the numbers behind

them

A Final Accounting Joke

What’s the definition of an accountant?

Someone who solves a problem you didn’t know you had in a way you didn’t understand at a fee you didn’t expect.

Questions & Answers

Thank You