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45 Minute Demo Optimist Presentation


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45 Minute Demo Optimist Presentation

  1. 1. Optimising Financial Performance Seminar Welcome to the
  2. 2. <ul><li>Richard J. Wood </li></ul><ul><li> </li></ul>
  3. 3. An Accounting Joke Three accountants are sitting in a sauna. Suddenly there is a beeping sound. The first accountant presses his forearm and the beeping stops. The others look at him curiously. &quot;That's my pager,&quot; he says, &quot;I have a micro-chip under the skin of my arm.“ A few minutes later a phone rings. The second accountant lifts his palm to his ear. When he finishes he explains, &quot;That's my mobile phone. I have a micro-chip in my hand.&quot;
  4. 4. An Accounting Joke The third accountant, feeling decidedly low- tech, steps out of the sauna. In a few minutes he returns with a piece of toilet paper hanging from the crack of his butt. The others raise their eyebrows. &quot;Oh, excuse me he says. I'm getting a Fax.&quot;
  5. 5. <ul><li>How would you like to see the financial impact of every business decision before you made it? </li></ul>MYOB ProfitOptimiser
  6. 6. Stages of Accounting Collection Recording Summarising Analysing
  7. 7. <ul><li>MYOB ProfitOptimiser is a financial software package that gives you the ability to: </li></ul><ul><ul><li>Perform what-if scenarios </li></ul></ul><ul><ul><li>Undertake goal seeking on a performance measure </li></ul></ul><ul><ul><li>Produce variance reports </li></ul></ul><ul><ul><li>Understand financial statements in a graphical format </li></ul></ul><ul><ul><li>Produce budgets and cash flow reports </li></ul></ul>What is MYOB ProfitOptimiser?
  8. 8. What is MYOB ProfitOptimiser? <ul><li>Begins where financial statements end </li></ul><ul><li>Identifies the key drivers of your profit, cash flow and balance sheet </li></ul><ul><li>Used by major trading banks </li></ul><ul><li>Great tool for both accounting and non accounting people such as sales & general managers </li></ul><ul><li>Better communication with staff, your accountant & the bank </li></ul>
  9. 9. <ul><li>What is the most effective way to improve cash flow? </li></ul><ul><li>What is the maximum sales growth your business can realistically sustain in the coming year? </li></ul><ul><li>What financial performance indicators are required to improve your financial, marketing and operational performance. </li></ul>Key Business Questions
  10. 10. <ul><li>Which products and customers are profitable? </li></ul><ul><li>What is the impact on price and volume changes? </li></ul><ul><li>What is the effect of discounts, terms and stock levels on your business? </li></ul><ul><li>How do you combine multiple business units into one operating entity? </li></ul>Key Business Questions
  11. 11. “ The shift to new technology is the single most important factor behind businesses accelerating productivity and growth.” Merril Lynch R eport
  12. 12. Mind Stimulation Exercise
  13. 16. Let’s Take A Closer Look………….
  14. 17. <ul><li>Scenario 1 </li></ul><ul><li>The Demo Company is a manufacturing company based in Sydney. The company has experienced cash flow and profitability problems in the past few years. The Directors wish to improve its cash flow and profitability. </li></ul><ul><li>The company’s current cash flow is negative $365,073 with a profitability rate of 11.64%. </li></ul><ul><li>How can the cash flow and profitability position be improved? </li></ul>
  15. 18. The MYOB ProfitOptimiser Reporting System
  16. 19. <ul><li>Scenario 2 </li></ul><ul><li>The Directors of The Demo Company wish to monitor the change in revenue and profit from the financial years 2002 to 2003. </li></ul><ul><li>Which report is used to track comparisons in performance between financial years in MYOB ProfitOptimiser? </li></ul><ul><li>Can the business sustain its growth over the next financial year? </li></ul><ul><li>Which report can indicate if a business requires additional cash flow injection . </li></ul>
  17. 20. <ul><li>Scenario 3 </li></ul><ul><li>The Demo Company’s short and long term debt position is currently $1,484,073 with a cash after operations amount of $90,954 . The company is very concerned with this level of debt and wishes to decrease borrowed funds to $1,000,000. </li></ul><ul><li>How can the decrease in borrowed funds be achieved and what will the decrease impact upon? </li></ul>
  18. 21. To get a R eturn O n C apital E mployed Or ROCE Why go into business?
  19. 22. X Components of ROCE Measures Balance Sheet Management Revenue Net Operating Assets EBIT Revenue Measures Profit and Loss Management
  20. 23. <ul><li>Scenario 4 </li></ul><ul><li>The Demo Company needs to establish what its return on capital employed (ROCE) is for the financial year 2001. </li></ul><ul><li>Having established the current position of 17.30% the company wishes to increase ROCE to 30%. </li></ul><ul><li>How can the increase be achieved? </li></ul>
  21. 24. <ul><li>Scenario 5 </li></ul><ul><li>The Demo Company wishes to implement a budget based on drivers of 70% in cost of goods sold, 100 days in receivables, 95 days in inventory with an increase of 10% revenue growth and a 5% price increase for the next financial year. The impact of this change must be reflected the the profit and loss statement and balance sheet. </li></ul><ul><li>How can this be achieved in MYOB ProfitOptimiser? </li></ul>
  22. 25. How Do We Use MYOB ProfitOptimiser
  23. 26. How Do We Use MYOB ProfitOptimiser In Our Business? <ul><li>As a Bureau Service for our clients to improve financial performance and assist with finance applications. </li></ul><ul><li>We annualise and project financial data to the end of a specific reporting period (3,6 or 12 months). </li></ul><ul><li>The the 3 key financial drivers are then interpreted and analysed: </li></ul><ul><ul><ul><li>Profitability </li></ul></ul></ul><ul><ul><ul><li>Cash Flow </li></ul></ul></ul><ul><ul><ul><li>Financial Growth </li></ul></ul></ul>
  24. 27. How Do We Use MYOB ProfitOptimiser In Our Business? <ul><li>Working with our clients we devise what if scenarios to improve financial performance. </li></ul><ul><li>Goal Seeking is then performed to visualise future improvements. </li></ul><ul><li>Anticipated taxation position is then assessed and tax planning initiatives are implemented. </li></ul><ul><li>The agreed performance measures are documented for the client. </li></ul><ul><li>A follow up consultation is then arranged. </li></ul>
  25. 28. Loan Financing
  26. 29. A Practical Loan Scenario Bank Reports Provided Numerous interpretive phone calls Paper based application submitted Client calls Bank to arrange loan Conditional Loan approved Accountant provides financial documentation
  27. 30. <ul><li>MYOB ProfitOptimiser is a simple to use, time saving tool that provides strategic analysis of your business performance. </li></ul><ul><li>MYOB ProfitOptimiser provides a total financial scorecard on one screen including what drives your business and the numbers behind them </li></ul>
  28. 31. A Final Accounting Joke What’s the definition of an accountant? Someone who solves a problem you didn’t know you had in a way you didn’t understand at a fee you didn’t expect.
  29. 32. Questions & Answers
  30. 33. Thank You