Presentation on theme: "Financial Analysis for Trainee Millionaires Buzz Ventures Ratio Analysis Types of Finance Definitions: Financial."— Presentation transcript:
Financial Analysis for Trainee Millionaires Buzz Ventures Ratio Analysis Types of Finance Definitions: http://www.accountrain.com/definitions.html Financial Statements from SEDAR www.sedar.com/issuers/company_issuers_a_en.htm
Income Statement & Balance Sheet Income Statement Aka Profit and Loss Account, it has two sections: Revenue (or Income) and Expenses. Income – Expenses = Profit Profit can be added to the Retained Earnings section of the Balance Sheet and/or distributed directly to the shareholders as a Dividend payment Balance Sheet consists of two sections: Assets and Liabilities A = L Assets can be Fixed or Current Liability can be LT, Current or Equity
Aastra Technologies Limited www.sedar.com/DisplayCompanyDocuments.do?la ng=EN&issuerNo=00001712 FISCAL 2011 FINANCIAL HIGHLIGHTS ACHIEVED SALES OF $693.0 MILLION. CLOSED THE YEAR WITH 55 CONSECUTIVE QUARTERS OF PROFITABILITY. GENERATED $70.4 MILLION OF CASH FLOW FROM OPERATIONS. CLOSED THE YEAR WITH $134.1 MILLION IN CASH, CASH EQUIVALENTS AND SHORT- TERM INVESTMENTS
Aastra Annual Balance Sheets 2011, 2010, 2009 All Figures $'000201120102009 Current Assets$418,620$424,852$399,834 (Including Cash of)$129,933$90,704$113,596 Fixed Assets$148,905$167,142$190,834 Total Assets$567,525$591,994$590,668 Current Liabilities$195,787$235,419$220,717 Long Term Liabilities$49,515$40,000$66,621 Total Liabilities$245,302$275,419$287,338 Equity$94,917$94,653$90,488 Retained Earnings$227,306$221,922$212,842 Total Equity$322,223$316,575$303,330
Aastra Annual Income Statements Income Statements20112010 Sales$692,994$716,936 Cost of sales$399,786$405,926 Overhead Costs$368,807$375,027 Operating Profit$30,979$30,899 Corporate Taxes$4,807$5,511 Profit for Distribution$26,172$25,388
Worked Examples Use the spreadsheet Aastra Financials 2011.xls Follow the demonstration of a ratio analysis for 2011 as it is demonstrated. THEN practice by doing the same ratio analysis for 2010.
Ratio Analysis Useful with comparisons of results for the same company down time. Very useful when comparing one company with its competitors OR with the industry. BUT you will need to adjust each set of accounts to use the same accounting assumptions or systems.
Sources of Finance Angel Investors Friends Family Fools Early stage to Very early stage investment. Exit Strategy Dorm room to Board Room to an IPO in 7 years.
Venture Capital Expect 15 times return on investments ON AVERAGE. Pressure to perform Will take majority shareholding (allows control) Ruthless
Bank Loans Will almost always ask for a personal guarantee of a business loan. If the company defaults they may sell your home. High interest charge but no share in the profits Need to see growth in sales income over time.
MicroFinance Canadian Youth Business Foundation Up to $25,000 loan Low interest rates. Provide mentoring & support Can be matched with a $25,000 loan from BDC.