# Chapter 12 - Financial Management

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9 Νοε 2013 (πριν από 5 χρόνια και 5 μήνες)

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Financial Management

Chapter 12

Learning Objectives

Create a cash budget

statements

Calculate the level of sales you need to
achieve a profit

Identify the types of services financial
experts provide

Construct a Cash Budget

Three columns
are used to show the estimated cash flow,
actual cash flow, and the difference
between the two.

.

Offer discounts on bills paid right away.

Establish tighter credit policies.

Establish a follow
-
up system for
collecting unpaid accounts receivable.

Hold shipments to customers with large
unpaid bills or demand that bills be

Take out a loan.

Financing your
money.

Find investors willing
to invest for a share of
future profits.

Control Inventory and Payroll

Check to make sure you are not carrying too
much inventory.

Reduce the size of your work force.

Slow Bill Payment

Consider taking advantage of longer credit
terms.

Cut Other Expenses

Control variable expenses

Analyze Financial Statements

Analyze Sales by Product.

Analyze Net Profit on Sales by Calculating
Net Sales

Gross Sales
-

\$ amount of all sales including
returns.

Net Sales
-

\$ amount of all sales after returns
are subtracted.

Gross Sales

Returns = Net Sales

Analyze Financial Statements

Calculate Net Income After Taxes

Gross Profit

Profit before operating
expenses are deducted.

Gross Profit

operating expenses = Net
income from operations.

Net Profit on Sales Ratio

Net income after taxes / Net sales = Net Profit
on Sales

Perform Break
-
Even Analysis

Break
-
Even Point is the volume of sales
that must be made to cover all of the

Below the break
-

Once you reach the break
-
even point, your
sales will reach all of your expenses.

Once you exceed the break
-
even point, you
will begin to earn a profit.

Measure Costs, Sales and Profits

To Calculate Break
-
Even Point, you need
to know Total Fixed Costs, Selling Price
per Unit, Variable Cost per Unit

Total Variable Costs / Number of Units =
Variable Cost per unit

To calculate Break
-
Even Point

Total Fixed Costs / Selling Price per Unit

Variable Cost per Unit

Hiring A Professional

Bankers

Ways to increase profits

Attorneys

Keep you informed of
changes in specific laws

Accountants

Prepare financial
statements

Financial Planners

Help manage

Investment Brokers

investing excess cash

How to Choose a Financial Advisor

1.
Research Financial Management so
that you are familiar with issues you
need to deal with.

2.
Consult other people in your
industry.

3.
Consider choosing a financial
advisor who charges a fee, not a
commission for services.

Services of Financial Experts

Financial Planning

Analyzing financial
statements in order to make decisions

Strategic Planning

Involves making
long term.

Tax Planning