Financial Management 101: Get A Grip On Your Business Numbers by Angie MohrFinancial Management 101: Get A Grip On Your Business Numbers by Angie Mohr

Financial Management 101: Get A Grip On Your Business Numbers

byAngie Mohr

Perfect | September 1, 2007

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Financial Management 101: Get a Grip on Your Business Numbers is the second book in the Numbers 101 for Small Business series. This book covers business planning, from understanding financial statements to budgeting for advertising. Angie Mohr's easy-to-understand approach to small-business planning and management ensures that the money coming in is always greater than the money going out! Analyze financial data to stay in touch with the heart of your business Measure your business success and pinpoint new opportunities Understand your business from the inside out"Even Microsoft and Ford started in someone’s basement or garage," says Angie Mohr. "But people all over the world have been given and idealized and unrealistic view of how to operate a business, and most discount the importance of the basics." - 20130326
Angie Mohr CPA, CA, CMA is a chartered accountant and certified management accountant. She can be heard regularly on radio with Small Business Survival Tips. Mohr is also a business columnist for a large daily newspaper and has written many articles for business magazines. Mohr believes strongly in planning the entrepreneur’s busine...
Title:Financial Management 101: Get A Grip On Your Business NumbersFormat:PerfectDimensions:184 pages, 9.76 × 8.3 × 0.37 inPublished:September 1, 2007Publisher:Self-Counsel PressLanguage:English

The following ISBNs are associated with this title:

ISBN - 10:1551808056

ISBN - 13:9781551808055


Table of Contents

Introduction xv1 Refresher: Balance Sheet, Income Statement,and Cash Flow Statement 1The Balance Sheet 2The Income Statement 4The Cash Flow Statement 5Chapter Summary 62 Basic Budgeting 7The Monthly Budget Report 8Where Do the Numbers Come From? 8Revenues 10Expenses 10Chapter Summary 11101 SMALL BUSINESS forContentsv3 Variable versus Fixed Costs: Why You Needto Know the Difference 13Fixed Versus Variable Expenses 14Variable expenses 14Fixed expenses 14Why is Cost Behavior Important to My Business? 15Break-even point 15Capacity 16Chapter Summary 174 Ratio Analysis for Fun and Profit 19The Basic Ratios and What They Tell You 20Solvency or liquidity ratios 20Asset and debt management ratios 22Profitability ratios 24Which Ratios Should My Business Track? 26When Good Ratios Go Bad: What to Do WhenThere’s a Problem 26Chapter Summary 275 Understanding the Operating Cycle 29The Operating Cycle 30The operating cycle timeline 32The Cash Flow Report 32Revenues 33Expenses 34Bringing it all together 34Chapter Summary 366 Pricing Your Product or Service 37Cost-Plus Pricing 38Value Pricing 38Competitive Pricing 39Consumer Demand 39Other Pricing Considerations 40Pricing services 40Penetration pricing 41Pricing below your competition 41vi Financial Management 101: Get a Grip on Your Business NumbersContents viiPsychological pricing 41Discount pricing 41Chapter Summary 427 Key Performance Indicators: Your Keysto Success 43How Do I Figure Out What My CSFs Are? 44How can I measure my CSFs? 44What Happens When My Key PerformanceIndicators Start to Slide? 46Chapter Summary 468 Getting a Grip on Your Inventory 47Types of Inventory 48Retailers 48Manufacturers 48Service business 49What’s Included in the Inventory Costs? 50Inventory Management Techniques 51Manual tracking 51The ABC management system 52Economic order quantity (EOQ) model 53Chapter Summary 559 Accounts Receivable: The Money Coming In 57The Sales Cycle Revisited 58Setting Up Your Credit Policy 58Terms of sale 59Credit decisions 60Collection policies 61Factoring Receivables 62Should I Hire a Collection Agency? 63Monitoring Your Receivables 64Chapter Summary 6510 Accounts Payable: The Money Going Out 67Supplier Financing 67Tracking Due Dates 69What Happens If I Fall Behind? 69Chapter Summary 7011 Buying New Things: Are They Going to Payfor Themselves? 71Projected Benefits 72Discounted Cash Flows 73Payback 76Benchmarking 77The Scarcity of Resources (or “There’s Only SoMuch Cash”) 77Chapter Summary 7812 What’s Not Showing on Your FinancialStatements 79The Six Big Risks 80Operating lease obligations 80Lack of adequate insurance 80Personal guarantees 81Economic dependence 82Foreign exchange exposure 82Interest rate exposure 83Risk Management for Entrepreneurs 84Chapter Summary 8413 Investor and Manager: The Split Personalityof the Small Business Owner 87The Small Business Manager 88The Small Business Investor 89Chapter Summary 9114 Growing Your Business 93The Three Methods of Business Growth 94Leverage 95Attract New Customers 95Sell Them More 97Sell to Them More Often 97Tracking Your Business Growth 97Chapter Summary 9815 Facing the Scary, Two-Headed Banker Monster 99Lending Money 101 100viii Financial Management 101: Get a Grip on Your Business NumbersContents ixGetting to Know and Love Your Banker 101The Lending Proposal 101The Care and Feeding of Your Banker 102Other Dance Partners 102Your Credit Score 103Chapter Summary 10416 Managing Debt 105Understanding Debt Service 106Debt service ratio 107Payback 108How Do I Calculate My Cost of Borrowing? 108Bank loans 108Lines of credit 109Credit Cards 109Capital leases 110Suppliers 110The government 110The Danger of Leverage 111The Debt Diet Plan 112Analyze 112Project 113Act 113Chapter Summary 11417 Compensating Employees 115What Are Your Employees Worth to You? 116Office Assistant 116What Are Your Employees Worth to Someone Else? 117Benefits 117Sick Days 118Performance-Based Compensation: Paying for Value 118The Performance Evaluation Process 119Keeping Tabs on Employee Performance 120Chapter Summary 12018 Pulling It All Together: The Planning Cycle 127The Planning Cycle 128Planning 129Control 130The flash report 130The monthly management operating plan 130Growth 131Fine Tuning 131Planning 132Chapter Summary 132Appendix 1The Monthly Management Operating Plan 133Appendix 2Present Value of $1 145Appendix 3Resources for the Growing Business 147Glossary 151Samples1 Typical Balance Sheet 32 Income Statement 43 Cash Flow Statement 54 Monthly Budget Report 95 Cash Flow Projection 356 Inventory Tracking Sheet 527 Aged Accounts Receivables Report 648 Quarterly Performance Review 121Diagrams1 The Operating Cycle 312 ABC Tracking Method 533 EOQ Model of Inventory Management 54Tables1 A Quick Reference to Ratios 28Worksheets1 Business Risk Profile 85 - 20110713