Infocom Webinar: Healthy Companies
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Join InfoComm, Frank Coker and Tom Stimson as they discuss the tell-tale signs of a healthy company. They'll also look at promising signs in the AV industry (and one troubling one!)
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Infocom Webinar: Healthy Companies
- 1. Signs of Healthy Company: Time for a Health Check! Frank Coker, MBA, CMC Tom Stimson, MBA, CTS CEO CEO CoreConnex, Inc. Stimson Group www.coreconnex.com http://trstimson.com/ frank@coreconnex.com tom@trstimson.com 425-454-5006 214-553-7077
- 2. Agenda Signs of Healthy Company • Industry highlights • Basics • Scenarios • Importance of BI • Analytics with BI • Tips
- 3. Industry Numbers • Sales and GM looking great • What’s happening to cash?
- 4. LOB Mix Changing • Integration is steadily gaining • Major drop in Product Sales
- 5. Basics – Info Spectrum How am I doing: EASY • Now? (low value) • Trends – historical? • Trends – future? • Actual / goals? • Actual / benchmarks? • Compared to other HARD similar industries? (high value)
- 6. Why trend analysis? • Trends show direction • Trends are a strong indication of future direction • Trends are easy to compare among peers • Combining multiple trend lines shows where underlying problems lie – can’t be seen in standard financial data
- 7. Performance Analysis Trends Ratios Goals Benchmarks
- 8. Question • Are rising revenues always a sign of good health? yes/no • Are falling revenues a sign of poor health? yes/no • When can falling revenues be healthy? a. When gross margin is falling faster? b. When cash is falling faster? c. When expenses are falling faster?
- 9. Trends – Revenue/Expense Unhealthy Healthy Revenue Revenue $ $ Expense Expense Time Time Revenue Revenue $ $ Expense Expense Time Time Revenue $ ?? Expense ?? Time
- 10. Magic of Trend Lines • Shows direction over time • Smooths out ups and downs • Trend slopes are comparable • Long-term + Short-term = real story
- 11. Trends – Time Adjusted Revenue Growth Unhealthy Healthy Short-term $ Long-term $ Long-term Short-term Time Time Long-term Short-term $ $ Short-term Long-term Time Time
- 12. Future Trends
- 13. Future Trends
- 14. Trends - Benchmarks Unhealthy Healthy Industry Benchmark Revenue $ Revenue $ Industry Benchmark Time Time
- 15. Trends – Goals, Benchmarks
- 16. Trends – Revenue/Cash Unhealthy Healthy Revenue Revenue $ $ Cash Cash Time Time Revenue Revenue $ $ Cash Cash Time Time
- 17. Trends – Goals, Benchmarks
- 18. Trends – COGS/Overheads Unhealthy Healthy Revenue Revenue $ COGS $ COGS Overheads Overheads Time Time Revenue $ COGS Overheads Time
- 19. Trends - Variability Unhealthy Healthy Revenue Revenue $ $ Time Time
- 20. Trends – Goals, Benchmarks
- 21. Benchmarks What we see financially is that… • Business owners don’t know when they are off track • Opportunities go unnoticed • Markets fluctuate – its hard to ride a wave when you aren’t looking
- 22. Why is financial analysis more important now? • Technology costs and profits decreasing • Technology margins are smaller • Growing demand for products and services • Economic squeeze making buyers more cost conscious • Workforce expectations/productivity gap • Old business processes no longer apply • Industry consolidation will favor the fittest
- 23. New Generation Analysis Combines data from multiple sources – Internal financial data – Internal operations metrics – External market data – External market benchmarks Result: Business Intelligence
- 24. What are your numbers telling you about your biz? • Too fast when margins are shrinking • Too slow when not keeping pace with markets • Fat when there is no leverage • Vulnerable when revenues are erratic • Many other important messages….
- 25. Business Intelligence Internal Financial Data and Operating Metrics • For each “industry standard” LOB • Combined with goals • Evaluated monthly • Integrated into management process External Market Data and Benchmarks • Updated monthly and quarterly • Integrated into analytical reporting
- 26. External BI Problems (from most common sources) • Survey based – not accurate • Out of date – data gathered for past year • Does not integrate financial and operating data • Not granular – can’t drill down by business characteristics • Not dynamic – usually not available monthly or quarterly The “usual” problems… But InfoComm is Changing all that!
- 27. Poll – questions 1. Does your team get information on financial performance? 2. Do they know your financial priorities? 3. Do they help find solutions to financial problems?
- 28. The best progress occurs when the whole team is on the same page! Let the whole team see the same picture!
- 29. Getting your Team on the Same Page https://infocomm.corelytics.com
- 30. The Team Process • Need to do it every month • Minimize the time (30 min monthly) • Focus on “3 big priorities” per month • Get everyone involved – On the same page – Finding solutions – Producing results
- 31. Life on an island can be limited!
- 32. Free Financial Health Check Your Company, Inc. https://healthcheck.corelytics.com/pub/sign_up.aspx
- 33. For More Information https://infocomm.corelytics.com
- 34. Thank You!
Editor's Notes
- I’m coming to the class hoping for or expecting:Talk to me about the terms I will use everydayEntering data, classifying properly important? Tell me what’s most important to monitorTell me what my process should beWhat is required by the IRS to track and what is optional?
- Types of trend lines: period-over-period, slope of current period, time-adjusted trend (current trend curves long term trend)