How Business Finance Comes to Life The company’s finances are represented by value markers and value carriers. Using these allow the teams to imitate the circulation of capital during the financial year.

Business Finance Comes to Life

The Scenario Year 1: Focus on Working capital – ”Turning Deadwood into Cash“ Working Capital down 50% Return on Equity up 300% (from 5 to 14%) Before After Accounts receivable Inventory

The Scenario Where are we heading… and how do we get there? Year 2: Going for profitable growth – ”Choose your strategy for growth” In year 2 the competition gets tougher and you have to choose a strategy for growth based on the Ansoff growth matrix. Where are we heading… and how do we get there?

The Scenario Year 2: Focus on cash – “Profit is an opinion. Cash flow is a fact.” Having gone through Year 2 you will have noticed that you almost ran out of cash during the year. Now it’s time to learn more about cash flow and the difference between cash flow and profit. € ¥ £ $

The Scenario Year 3: Build a Customer Base for Short- and Long-Term Sustainable Profit A competition between the teams! Volume Can we grow the business with the customer…? Loyalty Will they continue doing business with us…? Image Value Will they attract other customers…? Price Sensitivity Do we need to offer lower prices? Or; could we raise prices? Payment Terms Are we expected to lend money to our customers? How much, for how long?

Secure that the learning leads to useful knowledge – that sticks. The Next Steps Activity Link to your own area of responsibility – ”How can you make a difference?” Identify what levers to pull “What can I do differently – to contribute to the companies performance” Share conclusions and discuss the way forward Secure that the learning leads to useful knowledge – that sticks.

Business finance… isn’t that why we have a finance department! KPIs who needs them?!? Why are they always going on about cash flow… we are making money aren’t we? Business finance… isn’t that why we have a finance department! Profitable growth… that is something for the managers to figure out, right? What does ROI really mean? Top-line vs. Bottom-line? Is there a Middle-line…? What’s the difference between operating profit and net profit? Which is more important, to grow or to make money? Value added services, we don’t have those… do we? Working capital… is it really working? What is a Balance Sheet?