LESSONS ENTREPRENEURSHIP: Ideas in Action© SOUTH-WESTERN PUBLISHING Chapter 12 FINANCIAL MANAGEMENT 12.1 12.1Manage Your Cash Flow 12.2 12.2Analyze Your.

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Presentation transcript:

LESSONS ENTREPRENEURSHIP: Ideas in Action© SOUTH-WESTERN PUBLISHING Chapter 12 FINANCIAL MANAGEMENT Manage Your Cash Flow Analyze Your Financial Performance Hire Experts

ENTREPRENEURSHIP: Ideas in Action© SOUTH-WESTERN PUBLISHING Chapter 12 Slide 2 Lesson 12.1 MANAGE YOUR CASH FLOW Create a cash budget. Examine the role of credit. Improve your business’s cash flow. GOALS

ENTREPRENEURSHIP: Ideas in Action© SOUTH-WESTERN PUBLISHING Chapter 12 Slide 3 CREATE A CASH BUDGET Construct a cash budget Use an electronic spreadsheet

ENTREPRENEURSHIP: Ideas in Action© SOUTH-WESTERN PUBLISHING Chapter 12 Slide 4 EXAMINE THE ROLE OF CREDIT Types of credit Credit procedures Uncollectible accounts

ENTREPRENEURSHIP: Ideas in Action© SOUTH-WESTERN PUBLISHING Chapter 12 Slide 5 IMPROVE YOUR CASH FLOW Increase your cash receipts Increase your capital Reduce your disbursements Control inventory and payroll Slow bill payment Cut other expenses

ENTREPRENEURSHIP: Ideas in Action© SOUTH-WESTERN PUBLISHING Chapter 12 Slide 6 Lesson 12.2 ANALYZE YOUR FINANCIAL PERFORMANCE Analyze your business’s financial statements. Calculate the level of sales you need to achieve to make a profit. GOALS

ENTREPRENEURSHIP: Ideas in Action© SOUTH-WESTERN PUBLISHING Chapter 12 Slide 7 ANALYZE FINANCIAL STATEMENTS Analyze your sales Analyze sales by product Analyze net profit on sales Calculate net sales Calculate net income after taxes Why net profit on sales is important Set and meet profit goals

ENTREPRENEURSHIP: Ideas in Action© SOUTH-WESTERN PUBLISHING Chapter 12 Slide 8 PERFORM BREAKEVEN ANALYSIS Measure costs, sales, and profits Calculate your breakeven paint

ENTREPRENEURSHIP: Ideas in Action© SOUTH-WESTERN PUBLISHING Chapter 12 Slide 9 BREAKEVEN POINT The breakeven point is the volume of sales that must be made to cover all of the expenses of a business.

ENTREPRENEURSHIP: Ideas in Action© SOUTH-WESTERN PUBLISHING Chapter 12 Slide $12,500 10,000 7,500 5,000 2,500 Units Sold Total Costs and Revenues Total Cost Breakeven Point Graph Total Revenue Losses Profits Total Variable Cost Breakeven Point Total Fixed Cost

ENTREPRENEURSHIP: Ideas in Action© SOUTH-WESTERN PUBLISHING Chapter 12 Slide 11 Lesson 12.3 HIRE EXPERTS Find professionals who can help you with the financial management of your business. Identify the types of services financial experts provide. GOALS

ENTREPRENEURSHIP: Ideas in Action© SOUTH-WESTERN PUBLISHING Chapter 12 Slide 12 TYPES OF PROFESSIONALS Bankers Attorneys Accountants Financial planners Investment brokers

ENTREPRENEURSHIP: Ideas in Action© SOUTH-WESTERN PUBLISHING Chapter 12 Slide 13 HOW TO CHOOSE A FINANCIAL ADVISOR Research financial management so that you are familiar with the issues you need to deal with. Consult other people in your industry. Consider choosing a financial advisor who charges a fee, not a commission, for services.

ENTREPRENEURSHIP: Ideas in Action© SOUTH-WESTERN PUBLISHING Chapter 12 Slide 14 THE SERVICES OF FINANCIAL EXPERTS Financial planning Strategic planning Tax planning Tax audit