Choosing Your Next Employer:  How To Spot The Lemons!    How To Evaluate Companies       BEFORE You Jump!
How To Answer Two Questions                    ?              A Job   You                    ?                Job         ...
How To Buy & Sell Stocks                                      Sell Here!                       Buy Here!© 2012 by Blue Ele...
What You Are Looking For In Your Next                Job L ong T erm                             •                        ...
Business Models That You             Want To Work ForSell A Unique Product      Sell A Unique Service     Low-cost Buyer &...
3 Types Of Financial Statements   Income Statement               Balance Sheet         Cash Flow StatementHow much money d...
Where Can You Go To Get Financial   Information On Companies? © 2012 by Blue Elephant Consulting / www.BlueElephantConsult...
Income Statements Generated       5 Times Per Year   Called the   8Qs              Q1: Jan, Feb March                    Q...
3 Parts To An Income StatementRevenue Of The Business       Firm’s Expenses       Profit or Loss  © 2012 by Blue Elephant ...
There Are 2 Types Of Companies In            The World      You want to work                                              ...
We Need Some Examples…© 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
Who Are These Companies?                  An electronic product solutions company providing                  comprehensive...
Just Because A Company Makes             Money…Key Point: Just because a company makeslots of revenue, does not mean that ...
Let’s Talk About Profit!Definition: COGS – Cost Of Good Sold(how much did it cost to make what you are going to sell?)Def:...
Gross Profit Margin Indicates A             LTCAGood LTCE                                 Bad LTCE              61%       ...
The Gross Profit Margin Rule           100%                      Gross                                   LTCA             ...
Remember:   Anybody Can Fake It For A Year…2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011  Looking for “consistent...
JABIL CIRCUIT Inc. Gross Profit Margin =          Gross Profit Margin =                 Gross Profit Margin =1,004,144/13,...
Coca-ColaGross Profit Margin =                 Gross Profit Margin =   Gross Profit Margin = 22,246 / 35,119 =            ...
HPGross Profit Margin =            Gross Profit Margin =     Gross Profit Margin = 29,944 / 126,033 =               27,028...
10 Years Of Gross Profit Margins © 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
SG&ADefinition: SG&A – Selling, General and Administrative Expenses(how much did it cost to sell what you made?)Rule of Th...
SG&A As % Of Gross Profit© 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
R&D: A Good Thing & A Bad ThingRule of Thumb:Companies that have to spend a lot on R&D are in acompetitive industry and wo...
Do I Have Your Interest?• Interest expense is the interest that a company pays  out on the debt that the company is carryi...
Rules Of Interest1. The interest expense ratio is very dependent   on the industry that the company is in.2. The ratio can...
Interest Expense© 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
Forget Gross, Let’s Talk Net                EarningsDefinition: Net Earnings are what a company keeps after all of theexpe...
What Is A Good Net Earnings           Ratio?           100%                       Net                    Earnings /       ...
Net Earnings© 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
The Balance Sheet                                          What does the company                                          ...
3 Parts To A Balance Sheet         Assets                 Liabilities           Shareholder EquityShareholder Equity = Net...
Current                        Cover Your Assets!                                    Assets                 Cash          ...
How Much Cash Does the          Company Have?1. May have lots of cash for two reasons: has a   LTCE (good) or just sold a ...
What You Need To Look For           (Cash)Rule of Thumb:1. Cash piling up.2. Little debt.3. No sales of new shares or asse...
Asset UtilizationCompany’s Efficiency:Return On Asset Ratio = Net Earnings                        Total Assets    © 2012 b...
How Well Are Assets Being Used?  © 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
Let’s Talk About DebtQuestion: How is a company financing its operations:taking on debt or using equity?                  ...
Debt To Equity Ratio© 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
Now You Know How To Answer      Two Questions                    ?              A Job   You                    ?          ...
The End!- Dr. Jim AndersonBlue Elephant ConsultingPhone: 813-418-6970, Fax: 866-260-8726Facebook: http://goo.gl/mXKBWeb: h...
Like what you heard?                           Contact Dr. Anderson                             to speak to your          ...
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Choosing Your Next Employer How To Spot The Lemons!

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How should workers pick the next company that they are going to go to work for? Sure, we're all looking for the next perfect job, but what state is the company in -- will they be around tomorrow?

Dr. Jim Anderson explains how to evaluate the health and future potential of a company. Using the techniques that Warren Buffet has developed to determine which companies he wants to invest in. Dr. Anderson shows how job seekers can determine if a company is one that they should consider working for.

For more information on Dr. Jim Anderson and his company, Blue Elephant Consulting, find out more on the web at http://www.BlueElephantConsulting.com

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  • Electronic communication, because of its speed and broadcasting ability, is fundamentally different from paper-based communication. Because the turnaround time can be so fast, email is more conversational than traditional paper-based media.In a paper document, it is absolutely essential to make everything completely clear and unambiguous because your audience may not have a chance to ask for clarification. With email documents, your recipient can ask questions immediately. Email thus tends, like conversational speech, to be sloppier than communications on paper.However, your correspondent also won't have normal status cues such as dress, diction, or dialect, so may make assumptions based on your name, address, and - above all - facility with language. You need to be aware of when you can be sloppy and when you have to be meticulous.
  • Choosing Your Next Employer How To Spot The Lemons!

    1. 1. Choosing Your Next Employer: How To Spot The Lemons! How To Evaluate Companies BEFORE You Jump!
    2. 2. How To Answer Two Questions ? A Job You ? Job #1 You Job #2© 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    3. 3. How To Buy & Sell Stocks Sell Here! Buy Here!© 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    4. 4. What You Are Looking For In Your Next Job L ong T erm • • Create monopoly-like economics Allows them to charge more • Allows them to sell more C ompetitive • They make more money than competitors A dvantage © 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    5. 5. Business Models That You Want To Work ForSell A Unique Product Sell A Unique Service Low-cost Buyer & Seller © 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    6. 6. 3 Types Of Financial Statements Income Statement Balance Sheet Cash Flow StatementHow much money did What does the Tracks the cash thatthe company make company own, what flows in and out of theduring a set period of does it owe, and what companytime? is its net worth on the day that it’s created © 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    7. 7. Where Can You Go To Get Financial Information On Companies? © 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    8. 8. Income Statements Generated 5 Times Per Year Called the 8Qs Q1: Jan, Feb March Q2: April, May, June 2011 Q3: July, August, Sept Q4 Oct, Nov, Dec Called the 10k© 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    9. 9. 3 Parts To An Income StatementRevenue Of The Business Firm’s Expenses Profit or Loss © 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    10. 10. There Are 2 Types Of Companies In The World You want to work here…!Companies thatare struggling to Companies with get by in the a LTCA world © 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    11. 11. We Need Some Examples…© 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    12. 12. Who Are These Companies? An electronic product solutions company providing comprehensive electronics design, manufacturing and product management services. Manufactures a wide range of sodas, sports drinks, and water products. Now also owns much of the bottling and distribution network that is used to get its products into stores. HP provides consumers a wide range of products and services including digital photography, digital entertainment, computing, and home printing.© 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    13. 13. Just Because A Company Makes Money…Key Point: Just because a company makeslots of revenue, does not mean that thecompany is making a profit!!! © 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    14. 14. Let’s Talk About Profit!Definition: COGS – Cost Of Good Sold(how much did it cost to make what you are going to sell?)Def: Gross Profit = Revenue - COGSDef: Gross Profit Margin = Gross profit Total Revenue © 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    15. 15. Gross Profit Margin Indicates A LTCAGood LTCE Bad LTCE 61% 14% 51% 20% © 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    16. 16. The Gross Profit Margin Rule 100% Gross LTCA Profit 40% Margin Competition 20% Fierce 0% Competition© 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    17. 17. Remember: Anybody Can Fake It For A Year…2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Looking for “consistent” financial numbers… © 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    18. 18. JABIL CIRCUIT Inc. Gross Profit Margin = Gross Profit Margin = Gross Profit Margin =1,004,144/13,409,411 = 718,815 / 11,684,538 = 867,801 / 12,779,703 = 7.5% 6.2% 6.8% © 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    19. 19. Coca-ColaGross Profit Margin = Gross Profit Margin = Gross Profit Margin = 22,246 / 35,119 = 11,088 / 30,990 = 11,374 / 31,944 = 63% 35.8% 35.6% © 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    20. 20. HPGross Profit Margin = Gross Profit Margin = Gross Profit Margin = 29,944 / 126,033 = 27,028 / 114,552 = 28,665 / 118,364 = 23.8% 23.6% 24.2% © 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    21. 21. 10 Years Of Gross Profit Margins © 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    22. 22. SG&ADefinition: SG&A – Selling, General and Administrative Expenses(how much did it cost to sell what you made?)Rule of Thumb:Companies that don’t have a LTCA will show wildswings in their (SG&A / Gross Profit) ratio. © 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    23. 23. SG&A As % Of Gross Profit© 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    24. 24. R&D: A Good Thing & A Bad ThingRule of Thumb:Companies that have to spend a lot on R&D are in acompetitive industry and won’t keep a LTCA. © 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    25. 25. Do I Have Your Interest?• Interest expense is the interest that a company pays out on the debt that the company is carrying.• Most companies pay out more interest than they earn.• Interest is a “financial cost”, not an “operating cost”.• Companies with an LTCA have to pay out little interest expense. 7% 8% 49% © 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    26. 26. Rules Of Interest1. The interest expense ratio is very dependent on the industry that the company is in.2. The ratio can be an early warning of problems.3. In any given industry, the company with the lowest ratio (interest payments / operating income) is most likely to have an LTCA. © 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    27. 27. Interest Expense© 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    28. 28. Forget Gross, Let’s Talk Net EarningsDefinition: Net Earnings are what a company keeps after all of theexpenses and taxes have been subtracted from their revenue.Rule of Thumb:We are looking for a historical upward trend. © 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    29. 29. What Is A Good Net Earnings Ratio? 100% Net Earnings / Total LTCA Revenues 20% ??? 10% 0% Competition© 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    30. 30. Net Earnings© 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    31. 31. The Balance Sheet What does the company own, what does it owe, and what is its net worth on the day that it’s created.© 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    32. 32. 3 Parts To A Balance Sheet Assets Liabilities Shareholder EquityShareholder Equity = Net Worth Of The BusinessShareholder Equity = Assets - Liabilities © 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    33. 33. Current Cover Your Assets! Assets Cash “Working Assets”Accounts InventoryReceivable Listed on balance sheet in terms of their liquidity © 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    34. 34. How Much Cash Does the Company Have?1. May have lots of cash for two reasons: has a LTCE (good) or just sold a business (bad).2. Cash will get a company through temporary problems.3. You need to look at the past 7 years of cash: has it been built up over time? © 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    35. 35. What You Need To Look For (Cash)Rule of Thumb:1. Cash piling up.2. Little debt.3. No sales of new shares or assets.4. A history of consistent earnings. = LTCA!!! © 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    36. 36. Asset UtilizationCompany’s Efficiency:Return On Asset Ratio = Net Earnings Total Assets © 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    37. 37. How Well Are Assets Being Used? © 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    38. 38. Let’s Talk About DebtQuestion: How is a company financing its operations:taking on debt or using equity? Answer: The Debt / Equity ratio answers this question. Caution: Companies with a LTCA may be using their equity to buy back stock… 38.0% 0.68% 4.35% © 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    39. 39. Debt To Equity Ratio© 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    40. 40. Now You Know How To Answer Two Questions ? A Job You ? Job #1 You Job #2© 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    41. 41. The End!- Dr. Jim AndersonBlue Elephant ConsultingPhone: 813-418-6970, Fax: 866-260-8726Facebook: http://goo.gl/mXKBWeb: http://www.BlueElephantConsulting.com/"Unforgettable communication skills that will set your ideas free…" © 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com
    42. 42. Like what you heard? Contact Dr. Anderson to speak to your team about how to evaluate companies better! Business Communications Skills Coaching & Training: * Public Speaking * IT Management * Negotiating * Product Management * IT Leadership Web: www.BlueElephantConsulting.com Facebook: http://goo.gl/mXKB Twitter: drjimanderson Unforgettable Communication Skills That Will Set Your Ideas Free™© 2012 by Blue Elephant Consulting / www.BlueElephantConsulting.com

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