1. KEY FINANCIAL MANAGEMENT TOOLS
PRESENTED AT MASTER BUILDERS’
FIRST ANNUAL
REGIONAL ECONOMIC OUTLOOK
&
MANAGEMENT FORUM BY
ALLEN & ASSOCIATES

5. KEY TOOL AREAS
FINANCIAL
OPERATIONS
SALES
MANAGEMENT

6. TOOLS COVERED TODAY BALANCE SHEET P&L BENCHMARKING BREAKEVEN ANALYSIS
JOB & PRODUCT COSTING/PRICING
JOB & CUSTOMER CONTRIBUTION

7. THE TWO KEY FINANCIAL TOOLS
BALANCE SHEET
PROFIT & LOSS STATEMENT

8. BALANCE SHEET SNAP SHOT OF THE COMPANY’S FINANCIAL HEALTH
CURRENT PERIOD
LAST YEAR
VARIANCE
WORKING CAPITAL
RATIOS
DSOs

12. TYPICAL BALANCE SHEET OTHER SSETS

13. TYPICAL BALANCE SHEET CURRENT LIABILITIES

14. TYPICAL BALANCE SHEET LONG TERM LIABILITIES

15. TYPICAL BALANCE SHEET EQUITY

16. TYPICAL BALANCE SHEET RATIOS

17. PROFIT & LOSS STATEMENT
MOTION PICTURE OF A COMPANY’S SALES, COSTS & EARNINGS OVER A PERIOD OF TIME:
VARIABLE AND FIXED COST CATERGORIES
DOLLARS
PER CENT TO SALES
COST PER UNIT
VARIANCE FROM PLAN

18. COSTS VARIABLE COSTS DEFINED AS: TYPES: MATERIAL PLANT DELIVERY
COST INCURRED WHEN A SALE IS MADE
TYPES:
MATERIAL
PLANT
DELIVERY

19. COSTS FIXED COSTS DEFINED AS: COSTS FIXED IN RELATION TO TIME TYPES:
DIRECT
SALES
G&A

20. VARIABLE & FIXED COSTS

28. EDITDA
EBITDA = $2,952 $ %

29. BENCHMARKING ASSISTS IN HELPING TO ANALYZE THE COST OF DOING BUSINESS
ASSISTS IN HELPING TO ANALYZE THE EFFICIENCY OF AN OPERATION

32. Cement Prices vs Ready Mix Prices
1st Quarter of 1980 to 2nd Quarter of 1996

39. MODULE III: SESSION 1 - 0H

40. MODULE III: SESSION 1 - 0H

57. FINACIAL RATIOS <1M 1M-3M 3M-5M >5M CURRENT 1.8 2.0 1.6 1.7
CASH
D/E
AR DSO
INVENT

59. BREAK-EVEN POINT BE PT = FIXED COST DIVIDED BY MARGIN DATA REQUIRED
CURRENT TOTAL FIXED COSTS = $1,000,000
CURRENT AVG SELLING PRICE = $60.00/YD
CURRENT AVG VARIABLE CST = $40.00/YD
CURRENT MARGIN = $20.00/YD
BE PT IN YDS = FC/UNIT MARGIN
BE PT IN $ = FC/MARGIN RATIO
$1,000,000/$ = 50,000 YDS
$1,000,000/ = $3,030,303

60. ADDITIONAL SALES REQUIRED TO COVER INCREASED FIXED COSTS
CURRENT SP = $60/YD
CURRENT VC = $40.00/YD
CURRENT FC = $1,000,000
CURRENT BE PT = 50,000 YDS
NEW FC = $1,500,000
MARGIN = $20
NEW BE PT = 75,000 YDS
($1,500,000/$20)
INCREASE OF 25,000 YDS/50%

61. VOLUME REQUIRED TO MAINTAIN CURRENT PROFIT LEVEL IF PRICES ARE INCREASED
NEW SP = $65.00
% INCREASE = 8.33%
NEW MARGIN = $25.00
NEW BE PT = 40,000 YDS
($1,000,000/$25)
% DECREASE = 20%
MODULE III: SESSION OH

62. VOLUME REQUIRED TO MAINTAIN CURRENT PROFIT LEVEL IF PRICES ARE DECREASED
NEW SP = $50.00/YD
% DECREASE = 16.6%
NEW MARGIN = $10.00
NEW BE PT = 100,000 YDS
($1,000,000/$10)
% INCREASE = 100%
MODULE III: SESSION OH

65. KEY OPERATIONAL TOOLS PAYROLL ANAYLSIS NUMBER OF EMPLOYES BY CATEGORY
OVERTIME
FRINGES

66. KEY OPERATIONAL TOOLS PRODUCTION YDS PER YR PER PLANT
YDS PER YR PER TRUCK
AVG DAILY LOADS PER TRUCK
AVG YDS PER LOAD
AVG YDS PER MAN HOUR
VARIABLE DELIVERY COST PER MINUTE

67. SALES TOOLS DAILY/M-T-D/Y-T-D $ SALES & YARDS BY PLANT JOBS AVAILABLE
JOBS BID
YDS/PRICE/COMPETITION
JOBS SOLD
YDS/PRICE
COMPETITION
BACKLOG
YDS/WEIGHTED AVERAGE PRICE

68. SALES TOOLS
JOB COSTING
TARGET MARGIN PRICING
PRICE LISTS

81. C0ST COMPARISON SHEET

82. JOB 1 MARKET PRICE = $60.00 VARIABLE COST = $59.70 MARGIN = $00.30
JOB CONTRIBUTION = $3,000
PRE-TAX PROFIT = ?
AFTER TAX PROFIT = ?

83. JOB 2 MARKET PRICE = $60.00 VARIABLE COSTS = $41.57 MARGIN = $18.43
JOB CONTRIBUTION = $184,300
PRE-TAX PROFIT = $8.43
AFTER TAX PROFIT = $5.05

84. JOB 1 MARKET PRICE = $55.00 VARIABLE COST = $59.70 MARGIN = ($4.70)
JOB CONTRIBUTION = ($47,000)

85. JOB 2 MARKET PRICE = $55.00 VARIABLE COSTS = $41.57 MARGIN = $13.43
JOB CONTRIBUTION = $134,300
PRE-TAX PROFIT = $3.43
AFTER-TAX PROFIT = $2.05

86. JOB 2 MARKET PRICE = $50.00 VARIABLE COST = $41.57 MARGIN = $8.43
JOB CONTRIBUTION = $84,300
PRE-TAX PROFIT = ?

88. SALES & MANAGEMENT TOOLS
DAILY & J-T-D JOB INFORMATION
YARDS
VARIABLE DELIVERY COST PER YD
UNIT MARGIN PER YARD
$ CONTRIBUTION
VARIANCE FROM BID DATA
JOB SUMMARY

92. OTHER MANAGEMENT TOOLS
BUDGETS
CASH FORECASTS
3-5 YEAR PLAN
MODELS

94. SUMMARY ONLY THE INTELLIGENT WILL SURVIVE
ONLY THE INFORMED WILL BE INTELLIGENT
MANAGEMENT MUST BE ABLE TO IDENTIFY AND QUANTIFY ALL PROBLEMS IF IT IS GOING TO SOLVE THEM
MANAGEMENT MUST USE ALL TOOLS AND TECHNOLOGY AVAILABLE TO MANAGE