The document summarizes a webinar about unlocking hidden profits from QuickBooks. It discusses measuring financial performance, the financial operating cycle, and seven steps to profit mastery including planning, monitoring finances, understanding costs and pricing, managing cash flow and growth. It also provides examples of using financial ratios to analyze a company's stability, profitability, efficiency and working capital management to identify issues and opportunities.

1. Unlock Hidden Profits from Your QuickBooks Presented By Steve LeFever Business Resource Services Seattle, Washington QuickBooks Webinar Wednesday, September 3, 2008

2. Measure

3. Measure What Gets Measured Gets Managed

4. Seven Steps to Profit Mastery 1. Plan properly 2. Monitor financial position 3. Understand the relationship between price, volume, and costs 4. Manage cash flow 5. Manage growth 6. Borrow properly 7. Plan for transition

5. The Financial Operating Cycle Assets = Liabilities + Net Worth QuickBooks Balance Sheet

6. The Financial Operating Cycle Assets = Liabilities + Net Worth Sales QuickBooks Balance Sheet QuickBooks Income Statement Net Profit

7. The Financial Operating Cycle Assets = Liabilities + Net Worth Sales QuickBooks Balance Sheet Uses of Profits: QuickBooks Income Statement Net Profit 1. To pay for new assets 2. To pay off debt 3. To pay out to the owners

8. The Financial Operating Cycle Assets = Liabilities + Net Worth Sales QuickBooks Balance Sheet Uses of Profits: Efficiency QuickBooks Income Statement Net Profit 1. To pay for new assets 2. To pay off debt 3. To pay out to the owners

9. Cascade Office Systems Step 1. Gather accurate and timely financial information. Action Steps Step 4. Record your industry composites (if available). Step 2. Package the information to see relationships. Step 3. Calculate financial ratios. Step 5. Compare your results. Step 6. Analyze the possible causes of problems. Step 7. Take action — formulate and implement a plan, and monitor results.

11. Profit Mastery Scorecard BALANCE SHEET RATIOS: Stability (or “Staying Power”) 05 06 07 Industry 1. Current Current Assets 1.7 1.1 0.99 1.8 726,100 Current Liabilities 734,400 2. Quick Cash + Accts. Rec. 0.8 0.5 0.38 0.8 282,300 Current Liabilities 734,400 3. Debt-to-Worth Total Liabilities 1.5 1.4 2.68 1.2 823,700 Net Worth 307,300 For every $1 of (bottom #), there is $X of (top #)

12. Profit Mastery Scorecard INCOME STATEMENT RATIOS: Profitability (or “Earning Power”) ’ 05 ’06 ’07 Industry 4. Gross Margin Gross Profit 21% 20% 18.5% 22.2% 400,000 Sales 2,160,000 5. Net Margin Net Profit Before Tax 3.5% 3.0% .29% 3.82% 6,300 Sales 2,160,000 For every $1 of (bottom #), there is $X of (top #)

13. Profit Mastery Scorecard ASSET MANAGEMENT RATIOS: Overall Efficiency Ratios ’ 05 ’06 ’07 Industry 6. Sales-to-Assets Sales 2.3 2.3 1.9 2.4 2,160,100 Total Assets 1,131,000 7. Return on Assets Net Profit Before Tax 8.2% 6.9% 0.56% 6.9% 6,300 Total Assets 1,131,000 8. Return on Net Profit Before Tax 20.9% 16.5% 2.0% 15.8% 6,300 Investment Net Worth 307,300 For every $1 of (bottom #), there is $X of (top #)

14. Profit Mastery Scorecard ASSET MANAGEMENT RATIOS: Working Capital Cycle Ratios ’ 05 ’06 ’07 Industry 9. Inventory Cost of Goods Sold 5.6 8.1 4.2 4.9 1,760,000 Turnover Inventory 419,000 10. Inventory 360 64 44 86 74 360 Turn-Days Inventory Turnover 4.2 11. Accounts Receivable Sales 8.9 10 8 8.5 2,160,000 Turnover Accounts Receivable 270,000 12. Accounts Receivable 360 40 36 45 43 360 Turn-Days Accts. Rec. Turnover 8 13. Accounts Payable Cost of Goods Sold 12 10.4 5.7 9.8 1,760,000 Turnover Accounts Payable 310,100 14. Average Payment 360 30 34 63 37 360 Period Accts. Pay. Turnover 5.7

17. Seven Steps to Profit Mastery 1. Plan properly 2. Monitor financial position 3. Understand the relationship between price, volume, and costs 4. Manage cash flow 5. Manage growth 6. Borrow properly 7. Plan for transition