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  • 06/04/11 08:27 © 2007 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.
  • 06/04/11 08:27 © 2007 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

Diagnosing financial health of business 1  new 19 slides Diagnosing financial health of business 1 new 19 slides Presentation Transcript

  • Diagnosing Financial Health of Business By Dr. Rajeev Jain
  • DIGNOSING FINANCIAL HEALTH BY TAKING INTO ACCOUNT LIQUIDITY, ACTIVITY, LEVERAGE, PROFITABILITY AND MARKET VALUE By Dr. Rajeev Jain 1   Liquidity Debt / Equity Management Activity or Assets Management Diagnosing Financial Health Profitability   Market Value
  • DIAGNOSING FINANCIAL HEALTH BY TAKING INTO ACCOUNT LIQUIDITY Liquidity Current Ratio Liquidity Ratio Current Assets ------------------- Current Liabilities Liquid Assets ------------------- Current Liabilities By Dr. Rajeev Jain 1 A
  • DIAGNOSING FINANCIAL HEALTH BY TAKING INTO ACCOUNT ACTIVITY Operating Cycle Receivable Turnover Payable Turnover Cash Conversion Cycle Fixed Assets Turnover Receivable in Days + Inventory in Days Purchase -------------- Average Payable Sales ----------------- Average Receivable Cost of Sales ------------------- Average Stock Receivable in Days + Inventory in Days -payable in Days Sales ---------------- Average Fixed Assets Inventory Turnover By Dr. Rajeev Jain 1 B Activity or Asset Management
  • DIAGNOSING FINANCIAL HEALTH BY TAKING INTO ACCOUNT PROFITABILITY By Dr. Rajeev Jain 1 C Gross Profit ROI Gross Profit ------------ x 100 Sales EBIT ----------- x 100 Capital Employed Profitability Net Profit Net Profit ------------ x 100 Sales
  • DIAGNOSING FINANCIAL HEALTH BY TAKING INTO ACCOUNT LEVERAGE By Dr. Rajeev Jain 1 D
  • DIAGNOSING FINANCIAL HEALTH BY TAKING INTO ACCOUNT MARKET VALUE By Dr. Rajeev Jain 1 E Price Earning Ratio Market Price ------------------- EPS Earnings Per Share Net Earning ------------------- Number of Shares Basic Earnings Per Share Net Earning from Continue Operation + Other Earnings ------------------- Number of Shares Dilute Earnings Per Share   Market Value Net Earning from Continue Operation + Other Earnings ------------------- Diluted Potential Common Stock
  • Z-THEORY By Dr. Rajeev Jain 1 F
  • Z-SCORE A TOOL OF ASSESSING FINANCIAL HEALTH By Dr. Rajeev Jain 1 G
  • Z-SCORE METHOD FOR ASSESSING FINANCIAL HEALTH By Dr. Rajeev Jain 1 H
  • Z-SCORE -COMBINATION OF RATIOS By Dr. Rajeev Jain 1 I
  • Z-SCORE -FINAL OUTCOME By Dr. Rajeev Jain 1 J
  • PERFORMING TREND ANALYSIS TO DETERMINE FIRM'S ABILITY TO MEET FUTURE OBLIGATIONS By Dr. Rajeev Jain 2 A
  • Final Outcome of Trend Analysis Competitive Pressure Target ROE Future Potential Cross Subsidization Performing Trend Analysis By Dr. Rajeev Jain 2 B Risk Scoring Risk Mapping Final Decision
  • Uncovering Alternative ways to measure Financial Health other than Ratio Analysis Product Market Choices Product Market Strategies Management Goals Outlook of Sales Future Access to target sources of external finance Future need for external finance Future Financial and Competitive Performance Investments in Assets to support Product-Market strategies Stress test for viability under various scenarios Operating, Investing and Financial Plan for Next Year 3-5 years Financial Plan By Dr. Rajeev Jain 3 Measurement Tools 1.Operational Risk Analysis 2.SWOT Analysis 3.Porter's 5 Score Analysis 4.Sensitivity Analysis 5.Case Study 6.Six Sigma 7.ABM 8.TQM 9.Economic Value Added 10.Valuation of Business 11.Productivity Measures
  • Benchmarking past and current performance to identify the causes That have offset the well being of the company PAST V/S CURRENT RESPONSIBILITY ACCOUNTING BASE PARAMETERS TARGETS By Dr. Rajeev Jain 4
  • How to Deal with Recession By Dr. Rajeev Jain 5
  • RECESSION - AFTERMATH By Dr. Rajeev Jain 5 A
  • By Dr. Rajeev Jain 5 B Remarks