2. Business Finance for Everyone Manufacturing

3. 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?

4. Why a Finance for Non-financials program
A good understanding of financial information, particularly the profit and loss statement, balance sheet and cash flow statement empowers employees to make sound decision to contribute to the business profit and the shareholders’ funds. Without an understanding of how it all fits together, good intentions might end up having no effect on the profitability… or, in worse case, hurt the business.
By raising financial awareness, participants are more confident and better suited to manage businesses’ revenues, costs, profits and cash. Participants will also be more aware of how their decision impact the business, both in short and long terms.
It is not about what you know… it is about how you use your knowledge.

5. Apples & Oranges – The Simulation
Where and how is value created in a company
Purchasing
Production
Sales
Accounts receivable
Cash

6. Apples & Oranges – The Simulation
How do we monitor the performance
Purchasing
Production
Sales
Accounts receivable
Cash

7. The Simulation
How do we measure profitability and identify what drives the results
The products
The operation
Borrowed money
Year 1: Before
Year 1: After
Contribution Margin
Contribution 36
Sales 60
Profit Margin
Operating profit 9
Debt-Equity Ratio
Liabilities 61
Equity 39 =
1.6
15% %
60% 11 18 43 23
0.5
Y1 Before
Y1 After
Balance Sheet
Profit & Loss Statement 24
Liabilities 61 23 39 43
Fixed assets
100 66 76 42
TOTAL ASSETS
Plus
Return On Assets
Current assets 5%
14%
Equity 9%
17%
Operating profit 9 11 60
Common costs
Cost of goods sold 36
Sales
Minus 25
Contribution 27
Interest & Taxes 7 5
Net profit 2 6
Return On Equity

8. ”Invite people to think like business owners…
… so they can base their future decisions on sound business thinking.”

9. Apples & Oranges - 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.

10. The Seminar at a Glance: the Flow
Opening – Setting the Scene
Your own organization
What are we up against?
The Simulation experience
Scenario
”From mediocrity to excellence in 3 years”
Next Steps – the Way Forward
Back to your own real world
What is our potential for improvements?
What can we do to tap them?

11. The Scenario
Year 1: Focus on Working capital – ”Turning Dead wood into Cash“
Run a year in Apples & Oranges Inc’s business to learn the flow of cash within the organization, then discuss the possible improvements, and see how results can be significantly improved by putting focus on working capital.
Before
After
Accounts receivable
Inventory

12. 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?

13. 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. € $

14. The Scenario
Year 3: Many Small Wins – ”a Competition Between the Teams!”
You will now learn about eight suggested projects and explore potential for improvements. You then get to determine which levers to prioritize and suggest which projects to go for and experience the effect on you result.
Who is the winner?
Net Sales
Quality
Support Functions
Productivity
Purchase Price

15. 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.

16. Apples & Oranges - The Seminar in a Nutshell
Simulation
Board-based business simulation
Number of participants
Typically participants
3-6 teams of 3-4 participants
Facilitation
Trainers certified by Celemi
Time
4 to 16 hours
Corresponding to 3-4 simulated fiscal years
Methodology
Highly interactive, competitive and participant driven
Target groups
Anybody who will gain from learning about business finance
Employees at all levels

17. Apples & Oranges - The Seminar in a Nutshell
Key concepts covered:
Business finance
KPI´s
Balance sheet
Profit and loss statement
Cash flow
Working capital
Value drivers
Profitable growth
Value added services
Operations efficiency
Continuous improvements

18. What our clients say
“People actually begin to apply their new knowledge on the job, which helps them remember it. Months later retention is still high.” 
People from different parts of the organization become sensitive to each other’s needs and
understand how the operation works.”
Manager, Sales & marketing learning programs, 3M
“Pursuing the Value Management program has saved the Group around €1 billion in costs...
we could not have accomplished this without Celemi Apples & Oranges.”
Jürgen Hambrecht, CEO, BASF

19. A few client references
› employees
› employees
› employees
› employees
› employees

20. The Guiding Principles
You can’t absorb other people’s knowledge…
… you have to create your own!