1. Unlock Hidden Profits from Your QuickBooks Presented By Steve LeFever Business Resource Services Seattle, Washington QuickBooks Webinar Wednesday, September 3, 2008
4. Seven Steps to Profit Mastery 1. Plan properly 2. Monitor financial position 3. Understand the relationship between price, volume, and costs 4. Manage cash flow 5. Manage growth 6. Borrow properly 7. Plan for transition
6. The Financial Operating Cycle Assets = Liabilities + Net Worth Sales QuickBooks Balance Sheet QuickBooks Income Statement Net Profit
7. The Financial Operating Cycle Assets = Liabilities + Net Worth Sales QuickBooks Balance Sheet Uses of Profits: QuickBooks Income Statement Net Profit 1. To pay for new assets 2. To pay off debt 3. To pay out to the owners
8. The Financial Operating Cycle Assets = Liabilities + Net Worth Sales QuickBooks Balance Sheet Uses of Profits: Efficiency QuickBooks Income Statement Net Profit 1. To pay for new assets 2. To pay off debt 3. To pay out to the owners
9. Cascade Office Systems Step 1. Gather accurate and timely financial information. Action Steps Step 4. Record your industry composites (if available). Step 2. Package the information to see relationships. Step 3. Calculate financial ratios. Step 5. Compare your results. Step 6. Analyze the possible causes of problems. Step 7. Take action — formulate and implement a plan, and monitor results.
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11. Profit Mastery Scorecard BALANCE SHEET RATIOS: Stability (or “Staying Power”) 05 06 07 Industry 1. Current Current Assets 1.7 1.1 0.99 1.8 726,100 Current Liabilities 734,400 2. Quick Cash + Accts. Rec. 0.8 0.5 0.38 0.8 282,300 Current Liabilities 734,400 3. Debt-to-Worth Total Liabilities 1.5 1.4 2.68 1.2 823,700 Net Worth 307,300 For every $1 of (bottom #), there is $X of (top #)
12. Profit Mastery Scorecard INCOME STATEMENT RATIOS: Profitability (or “Earning Power”) ’ 05 ’06 ’07 Industry 4. Gross Margin Gross Profit 21% 20% 18.5% 22.2% 400,000 Sales 2,160,000 5. Net Margin Net Profit Before Tax 3.5% 3.0% .29% 3.82% 6,300 Sales 2,160,000 For every $1 of (bottom #), there is $X of (top #)
13. Profit Mastery Scorecard ASSET MANAGEMENT RATIOS: Overall Efficiency Ratios ’ 05 ’06 ’07 Industry 6. Sales-to-Assets Sales 2.3 2.3 1.9 2.4 2,160,100 Total Assets 1,131,000 7. Return on Assets Net Profit Before Tax 8.2% 6.9% 0.56% 6.9% 6,300 Total Assets 1,131,000 8. Return on Net Profit Before Tax 20.9% 16.5% 2.0% 15.8% 6,300 Investment Net Worth 307,300 For every $1 of (bottom #), there is $X of (top #)
17. Seven Steps to Profit Mastery 1. Plan properly 2. Monitor financial position 3. Understand the relationship between price, volume, and costs 4. Manage cash flow 5. Manage growth 6. Borrow properly 7. Plan for transition