Pre 2 - Performance problems and issues

Root cause analysis on critical performance gaps.

• Component ratio analysis on the problem areas.

Sources of the problems and issues.

Finding the solutions and strategies

Putting strategies into a map

designing new business models to achieve the set goals

Simulate the ROE model to get the bottom line impact.

1. Cost volume profit analysis =   Fixed Costs/contribution margin or  Fixed Costs / contribution margin ratio
2. Working Capital =  Current Assets - Current Liabilities
• Current Assets =  Cash + Stocks + Debtors + Other debtors
• Current Liabilities = Bank overdraft + Trade Creditors + Other Creditors
3. Fixed Capital
• Land & Building + Plant & Machinery + Transportation + Computers
4. Equity +  Borrowings =  Working Capital + Fixed Capital
5. P/S x  S/A x  A/E   =  Net Profit Margin x Asset turnover  x Equity Multiplier.
6. Cash flows =  Cash inflows minus Cash outflows = Cash balance
7. Financial Statement =  Income statement + Balance Sheet
• Revenue - Cost of goods sold - Fixed Expense =  Net Income
• Assets - Liabilities  = Equity
• Assets  =  Current Assets + Fixed Assets
• Liabilities =  Current Liabilities +  LT Liabilities