Business020 cheat sheet

ccscshirley · 发表于 2006-3-26 17:40

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虽然知道离Busiess020 的最后考试还有一段时间。但是贴出来给大家先有个映像，别到考试的时候抱佛脚。我还会陆续贴出History028E的去年考试卷子。

GM Overview
• Role, Timing, Issues/Decisions, C&Cs
• Objectives
– What do we “WANT” to do?
• External Analysis
– What do we “NEED” to do?
– PEST, Consumer, Competition, Trade
• opportunities & threats
– IMPLICATIONS: KSFs
• Internal Analysis
– What “CAN” we do?
– Finance, Marketing, Ops, HR
• abilities, strengths & weaknesses
– IMPLICATIONS: KSFs, CORPORATE CAPABILITIES

• Alternative Evaluation
– What are the options?
– Evaluate the pros & cons of the options
– How does this option “FIT”?
– (you may be able to eliminate options based exclusively on the poor “FIT”qualitatively - if so, make sure you explain why this option was nixed)
– Financial Feasibility (of AT LEAST 2-3 options that might “work”)

• Decision
– Justify why you chose a particular option(s).
– YOU SHOULD BE CONVINCING
• Which strategy best meets the firm’s objectives?
• Does it satisfy the personal objectives as well?
• Have you addressed the cons of the chosen alternative?
• Is this decision consistent with the analysis you’ve done? EXPLAIN! (FITS)
• Why NOT the other options?
• How does this choice affect Finance, Marketing, Ops and HR? What changes
need to be made?

• Action Plan
• Map out a clear and precise implementation plan which includes;
– details which address what steps you have to take to implement your
decision
– details about timing
– details about WHO will be responsible for accomplishing the ‘task’
– how will you follow-up your plan (measure success)
– make sure to consider both the short term and long term

Firm Valuation
• Used to help managers determine the “price” of a company.
• 3 methods of valuing a firm;
– Net Book Value
– Economic Appraisal
– Capitalization of Earnings
• Using all 3 methods (if possible) helps us to determine a RANGE of what the
company is worth.
• THINK!!! What are you really selling? Will anyone pay for it? How much will they pay???

  Net Book Value (NBV)
– Total Assets - Total Liabilities
• a.k.a.. the equity
– Does not account for the present market value of the assets
– Calculated using the most recent given balance sheet
– Preferred method for banks, creditors, and/or buyers who are interested in selling off the assets of the business

  Economic Appraisal (EA)
– Similar to NBV, but tries to reflect the current market value of the assets
– Total Appraised Assets – Total Liabilities
– Preferred by buyers who are interested in a company for its assets

  Capitalization of Earnings (CE)
– Focuses on the I/S instead of the B/S
• Attempt to value the company in terms of the future income it may provide.
– NPAT * P/E ratio = value
– Must evaluate two different earnings figures (to determine risk & range)
• Assuming changes (projected statement)
• Assuming no changes (current given I/S)
– Select a reasonable P/E multiple
– Preferred by buyers interested in the ongoing operation of the company (i.e.taking over as management)

• P/E Multiple
– Rules of thumb;
• Mature industries with stable earnings tend to have multiples
from 5 to 15.
• High growth industries tend to have multiples exceeding 20.
• “Growth is good; risk is rotten!”
– growth increases a multiple
– risk decreases a multiple

Their Associated Ratios
• Profitability;
– Business goal - to make $$
– Ratios measures how much money we had to spend to make $X in sales
• Stability;
– Business goal - to have a stable financial structure (balance its ownership of assets with debt and equity)
– Ratios measure the firm’s means of financing assets and ability to pay interest on debts

5 Financial Goals &Their  Associated Ratios
• Liquidity;
– Business goal - ability to meet s-t obligations
– Ratios measure how liquid the firm is (how able the firm is to pay its shortterm
obligations)
• Efficiency;
– Business goal - to efficiently use assets
– Ratios tell us how efficiently we are using our investments

• Growth;
– Business goal - to increase in size
– Ratios tell us whether the company is achieving any growth

Interpreting the Ratios
• Profitability;
– Vertical Analysis (of I/S)
I/S items * 100 = %
Sales
• Tells us it cost us X% of sales to make those sales
– Return on Investment/Equity
Profit ATB4D  = %
Average Equity
[(Yr. 1 E + Yr. 2 E)/2]
• Tells us how much profit we made relative to the investment made by the owners

• Stability;
– Net Worth: Total Assets
Total Equity = %
Total Assets
• tells us what % of assets were financed through owner’s money
– Debt to Assets
Total Debt = %
Total Assets
• Tells us what % of the assets were financed through debt
– Interest Coverage
      EBIT          =  # times
Interest Expense
• tells us how many times we can pay interest

• Liquidity;
– Current Ratio
Current Assets    = X:1
Current Liabilities
• Tells us, if we liquidated all our current assets, how many times we can pay our debts
RULE OF THUMB: 2:1
– Acid Test
Cash + M/S + A/R = X:1
Current Liabilities
• Tells us how many times we can pay our debts with the money easily available to us
RULE OF THUMB: 1:1

– Working Capital
C.A - C.L = $X
• Tells us how much money we have to work with AFTER s-t debts are paid

Efficiency;
– Age of Receivables
Accounts Receivabl = # Days
   (Sales / 365)
• Tells us how long it takes us to collect our $$

– Age Of Payables
Accounts Payable = # Days
(Purchases* / 365)
• Tells us how long it takes us to pay our bills

– Age of Inventory
Inventory       = # Days
(COGS / 365)
• Tells us how long we are holding on to our inventory in the warehouse

• Growth;
– Sales
– Net Income
– Total Assets
– Equity
Yr. 2 - Yr. 1 = %
Yr. 1
• Tells us whether the accounts are growing (and hence the company)

Understanding Ratios
• DO NOT CONCLUDE THAT “THE RATIO IS GOOD/BAD”
• Either the NUMERATOR or the DENOMINATOR affects the ratio
• Ask yourself: “WHY HAS THE RATIO CHANGED & WHAT DOES THIS MEAN?”
– Which number caused the change?
– Look for increasing or decreasing trends over time.
– Will these trends continue?
– How does the company compare to the industry?

Classifying Costs
• Variable Costs
– a cost incurred with every unit sold/produced (volume)
• Fixed Costs
– cost that does not vary with volume

ccscshirley · 发表于 2006-3-26 18:02

谢谢啦

lucky13 · 发表于 2006-3-26 18:04

。。。。。。。。。。。。。
那么早就发了

ccscshirley · 发表于 2006-3-26 18:08

这不是怕大家重蹈operation和finance的覆辙么。哈哈。我有朋友finance才50多。好可怜啊。关键还是要多写Decision。我在Operation的时候写了5.6 篇Decision呢。要不怎么能那么高分

Darren · 发表于 2006-4-2 13:34

太好了

支持一下～

ccscshirley · 发表于 2006-4-2 23:39

谢谢啊。记得介绍朋友来看啊。我后面还会陆续贴出其它的cheat sheet的。

Darren · 发表于 2006-4-9 17:37

:d 支持楼主！

希望继续贴出这些帖子

其他朋友谁有，也来补充哦～

偶transfer 了
biz020　的credit
呵呵不用再读了！

Brian · 发表于 2006-4-22 13:45

谢谢！

kimmy · 发表于 2006-8-15 14:32

太谢谢了~

momo · 发表于 2006-9-17 12:34

Thank you so much!

hhbelin · 发表于 2006-10-15 16:59

XIEXIE XIEXIE APPRICATEION CAN NOT BE EXSPREES~~~~

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