Download - Financial ratio and SWOT analysis
![Page 1: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/1.jpg)
Welcome to the Military Families Learning Network Webinar
This material is based upon work supported by the National Institute of Food and Agriculture, U.S. Department of Agriculture, and the Office of Family Policy, Children and Youth, U.S. Department of Defense under Award No. 2010-48869-20685.
A few days after the presentation, we will send an evaluation and links to an archive and resources. We appreciate your feedback. To receive these emails, please enter your email address in the chat box before we start the recording. Once we start the recording, all chat will be recorded and archived.
![Page 2: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/2.jpg)
This material is based upon work supported by the National Institute of Food and Agriculture, U.S. Department of Agriculture, and the Office of Family Policy, Children and Youth, U.S. Department of Defense under Award No. 2010-48869-20685.
www.eXtension.org/militaryfamilies facebook.com/militaryfamilies
Sign up for the Military Families Learning Network email list: http://bit.ly/MFLNlist
bit.ly/MFLNwebinars
blogs.eXtension.org/militaryfamilies twitter.com/MilFamLN
Welcome to the Military Families Learning Network Webinar
![Page 3: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/3.jpg)
Financial Ra)o and SWOT Analysis
Dr. Michael S. Gu;er, University of Florida
![Page 4: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/4.jpg)
Find us online
• Facebook: h;p://www.facebook.com/#!/PersonalFinance4PFMs
• Blog: h;p://blogs.extension.org/militaryfamilies/category/personal-‐finance/
• Website: h;p://www.extension.org/militaryfamilies
• Twi;er: Follow #MFLN
![Page 5: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/5.jpg)
CEU Informa)on
• AFC-‐creden)aled par)cipants will earn 1.5 CEUs by par)cipa)ng in this 90-‐minute web conference and following these instruc)ons: 1. Please make a note of TWO passwords that will be
presented during the presenta)on. 2. Send BOTH words to the email address given at the end
of the presenta)on, along with your first and last name.
![Page 6: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/6.jpg)
Financial Ra)o and SWOT Analysis
Dr. Michael S. Gu;er, University of Florida
![Page 7: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/7.jpg)
Recap: Why Do You Need Records?
• Records serve as a reference point • Records provide evidence of progress
– Track income, expenses, assets, liabilities, and achievement of objectives
• Records help consumers work more efficientyly with various financial services providers
![Page 8: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/8.jpg)
Review Case Study Family
• Meet Bre; (28) and Bri;any Johnson (25). – Live off base – Son – Sam (2) – Dog – Fluffy (10)
• Bre; is on ac)ve duty, Bri;any is a nurse in local hospital
![Page 9: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/9.jpg)
Our Key Statements
• Balance Sheet • Income and Expense Statement • Budget • Statement of Changes in Net Worth • Statement of Cash Flows
![Page 10: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/10.jpg)
![Page 11: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/11.jpg)
![Page 12: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/12.jpg)
2005© University of Wisconsin-Madison
Board of Regents
So to recall: a Personal Balance Sheet
• Allows you to determine your net worth • Updating it periodically allows you
to monitor changes in your net worth over time
• Balance Sheet: Net Worth • Can NW be negative?
– What does this mean? Is it bad? • How do we increase net worth?
![Page 13: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/13.jpg)
![Page 14: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/14.jpg)
![Page 15: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/15.jpg)
BREAKING THESE DOWN Suppor)ng statements
![Page 16: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/16.jpg)
Chapter 4: Personal Financial Statements
The Statement of Cash Flows
• For a given period, the statement of cash flows: – Shows the inflows, oudlows and the net change in cash between two balance sheets
– Iden)fies the changes in some of the accounts from one balance sheet to the next
![Page 17: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/17.jpg)
Chapter 4: Personal Financial Statements
Statement of Cash Flows Classifica)ons
• Cash Flows from Opera)ons • Cash Flows from Inves)ng Ac)vi)es • Cash Flows from Financing Ac)vi)es
![Page 18: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/18.jpg)
![Page 19: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/19.jpg)
Chapter 4: Personal Financial Statements
The Statement of Changes in Net Worth
• Summarizes noncash flow changes in net worth not recorded on either the income or the cash flow statements.
![Page 20: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/20.jpg)
Chapter 4: Personal Financial Statements
Statement of Changes in Net Worth Transac)ons
• Changes in value for assets due to apprecia)on or deprecia)on
• If an asset other than cash is exchanged for some other assets
• If assets other than cash are received by gif or inheritance
• If assets other than cash are given to chari)es or noncharitable donees
![Page 21: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/21.jpg)
![Page 22: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/22.jpg)
Uses for Decomposi)on Statements
• Ideally – Balance Sheets are accurate based on statements – Income Por)on of IE is accurate because income is fixed and constant
• So if our statements do not align, it is likely that the error would be the expenses.
• Why do so many people fail to accurately account for their expenses?
![Page 23: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/23.jpg)
Using Statements: What-‐Ifs?
• Budget – Deployment – Post deployment
• Helps one to envision needs for insurance or other benefits by having a benchmark budget
• Lets explore one of our submi;ed budgets for deployment for our family?
![Page 24: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/24.jpg)
Deployment: So How Might the Budget Change?
• Of course, there will be the increase in Bre;'s pay due to the deployment. – These may include Imminent Danger Pay, Hardship Duty Pay,
Deployed Per Diem and Career Sea Pay. – He will receive FSA-‐T, Type II (Separa)on Pay) afer 31 days which will
be back dated. – While in a war zone, he will get his pay tax free and receive a refund
for his Combat SGLI and TSGLI.
• Perhaps he will re-‐enlist while deployed and get a tax free bonus.
• Bre; may lose special pays if he doesn't receive a waiver. Examples are Language pays, Diving Duty Pay and Halo Duty Pay.
Thank you Connie
![Page 25: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/25.jpg)
Deployment: So How Might the Budget Change?
• Bri;any may have to reduce work hours or leave her employment. – She may have to pay more for child care. Quality evening and weekend child
care can be very difficult to secure for a decent price. She may have to hire a nanny. She may have to secure a pet si;er.
• Depending on where the couple is residing, Bri;any may decide to move home with her parents. – That may reduce housing costs such as u)li)es but, they will have moving fees
(twice) and, perhaps, storage fees. Perhaps they will decide to rent their home while he is deployed. This can boost income but, has expenses of it's own.
• Food may vary. With Bre; gone, the family grocery bill will be less.
However, ea)ng out may increase because of it's convenience. If she hires a nanny, food costs may stay the same. Entertainment costs may alter.
![Page 26: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/26.jpg)
Deployment: So How Might the Budget Change?
• Auto costs may decrease. – Since they are a two car family, they may put one car on a deployed status for
the insurance. The gas and maintenance will also be lowered. Or Bri;any may provide one of the cars for a nanny. Which may increase insurance premiums, gas and maintenance costs. Perhaps they will sell a car before the deployment with the thought of buying something new when Bre; returns.
• Added expenses will be care package items and shipping for care packages, ship phone cards/calling cards, and ship/internet purchases by Bre;.
• An expense they should budget for is the Savings Deposit Program.
• Pre-‐deployment and/or post-‐deployment trip home to visit Bre;'s family
![Page 27: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/27.jpg)
CEU Password #1
Net Worth
![Page 28: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/28.jpg)
Using Statements
• Is there sufficient room for savings? – Compare with goals
![Page 29: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/29.jpg)
Savings situa)on
Adequate savings • Con)nue to treat savings as
a fixed expense • Explore any opportuni)es
for tax savings • Monitor progress toward
goal over )me
Inadequate savings • Reduce expenses
– If possible • Increase income
– If possible • Adjust tax situa)on
– Keep more income • Adjust goal
– Amount – Timing – At all?
![Page 30: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/30.jpg)
Chapter 4: Personal Financial Statements
Ra)o Analysis
• The key to ra)o analysis is: – Does the ra)o get to the answer for the ques)on asked?
– Is there some standard or benchmark to determine whether the result is appropriate for this par)cular client?
![Page 31: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/31.jpg)
Chapter 4: Personal Financial Statements
Ra)o Analysis—The Objec)ve
• The objec)ve of ra)o analysis is twofold: – To gain addi)onal insight into the financial situa)on and behavior of the client
– To generate ques)ons for the client to answer to further gain such insight
![Page 32: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/32.jpg)
Chapter 4: Personal Financial Statements
Types of Ra)o Analysis
• Liquidity ra)os – emergency fund ra)o and current ra)o
• Debt ra)os – total debt to net worth, long-‐term debt to net worth, debt to total assets, long-‐term debt to total assets, housing costs to gross income, housing and debt payments to gross income
• Performance ra)os – savings ra)os and investment performance ra)os
![Page 33: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/33.jpg)
Chapter 4: Personal Financial Statements
Emergency Fund Ra)o
EFR = Current Assets Monthly Nondiscre)onary Expenses Target of 3 to 6 months
![Page 34: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/34.jpg)
For Our Case Study
EMF = 1600 / (1/12 X (6920+3816+4000+1,920+6540+7080+2820+390+4056+1200+168+600+624) = = 1600 / (40134/12) = 1600 / 3344.5 = 0.478 Less than a month, this is cri)cally low. Lower resiliency for this family to a resource shock
![Page 35: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/35.jpg)
Chapter 4: Personal Financial Statements
Current Ra)o
CR = Current Assets Current Liabili)es Target of 1.0 to 2.0
![Page 36: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/36.jpg)
For Our Case Study
CR = 1600 / 10275 CR = 0.156 CR = 1600 / 4045 CR = 0.395 Either way it is too low. How do we interpret this?
![Page 37: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/37.jpg)
Debt Ra)o
= Total Liabili)es Total Assets
This should be less than 0.4 or 40%
![Page 38: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/38.jpg)
For Our Case Study
DR 2012=210364/260828 DR 2012=0.80 or 80% DR 2013= 215535/330534 DR 2013= 0.652 or 65% This is also too high, should be 0.4 or less, but it is geung be;er…
![Page 39: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/39.jpg)
Long-‐Term Debt Coverage Ra)o
= Annual gross income Total annual long term debt payments Should exceed 2.5
![Page 40: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/40.jpg)
For Our Case Study
LTDCR = 83,593.36 / (6540+7080+2820+4056) 83,593.36/20496 = 4.08 With CC debt it is 83593.36/(20496+6230) = 3.13 In either care, the debt coverage is reasonable.
![Page 41: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/41.jpg)
Debt-‐to-‐Income Ra)o
= Annual consumer credit payment Annual afer-‐tax income
Should be less than 15%
![Page 42: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/42.jpg)
For Our Case Study
• So here we will count car loans, credit cards. Now I include student loans too so we capture debt burden but Not the mortgage.
DIR = (6230+2820+4056)/(83593.36-‐23839.31) DIR = 13106/72860.05 = 17.99% Debt is not overwhelming but becoming burdensome
![Page 43: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/43.jpg)
Credit Usage Ra)o
= Total Credit Used Total Credit Available
Should be less than 30% (Consistent with FICO measure)
![Page 44: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/44.jpg)
For Our Case Study
So since you now know our family has a credit limit of $15,000 on their credit, what is their usage? CUR 2012= 7980/15000 = 0.532 or 53.2% CUR 2013= 6230/15000 = 0.415 or 41.5% So it is improving but s)ll rela)ve to FICO benchmark of 30%
![Page 45: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/45.jpg)
Chapter 4: Personal Financial Statements
Lending Ra)os – Front End
• Housing Costs (Mortgage payment + Property tax + Homeowners insurance) to Gross Income – Target of ≤ 28%
![Page 46: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/46.jpg)
For Our Case Study
FER = (6540+7080+4692)/83593.36 FER = 18312/83593.36 = 21.9%
![Page 47: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/47.jpg)
Lending Ra)o – Back-‐End
• Housing and Debt Payments (i.e. credit card, auto loan) to Gross Income – Target of ≤ 36%
![Page 48: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/48.jpg)
For Our Case Study
BER = (6540+7080+4692+4056+6230)/83593.36 BER = 28598/83593.36 = 34.2% So housing wise our family is not in too bad of shape, other debt yes…
![Page 49: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/49.jpg)
Chapter 4: Personal Financial Statements
Savings Ra)os
• Rate of Savings = Annual Savings Annual Gross Income Target of ≥ 10% (age dependent)
• Includes Personal and Employer Contribu)ons
![Page 50: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/50.jpg)
For Our Case Study
SR = (2731+1488+2000)/83593.36 SR = 6219/83593.36 SR = 0.074 or 7.4% Is this okay?
![Page 51: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/51.jpg)
Chapter 4: Personal Financial Statements
Investment Ra)os
• Income on Investments = Income from Investments Average Invested Assets • ROI = EI – BI – Addi)onal Investments Average Invested Assets Target of 9 to 12% • Investment Assets to Gross Income
![Page 52: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/52.jpg)
For Our Case Study
ROI = (33871+1727)/[(24598+4591+2000+61200+8699+2000)/2] ROI = 35598 / 51544 = 69% WOW what a return…
![Page 53: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/53.jpg)
So let’s summarize
• Liquidity – Family has insufficient capital to meet current obliga)ons
– Family is not adequately prepared for an emergency without addi)onal support or resources from others
• Debt – This family has a high debt load
• It presents issues for level of debt and amount of debt payments
![Page 54: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/54.jpg)
So let’s summarize
• Housing – Housing is not too burdensome for this family
• Savings/Inves)ng – Investments did great, but they probably need to be saving more
![Page 55: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/55.jpg)
Chapter 4: Personal Financial Statements
Ver)cal & Growth Analysis
• Ver)cal analysis: – Balance sheet – each item presented as a percent of total assets
– Income statement – each item presented as a percent of total income
• Growth analysis: – Calculates the growth rate of certain financial variables over )me using TVM tools
![Page 56: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/56.jpg)
For Our Case Study
• We have seen – Income not dras)cally change – Expenses change – Loss of value on the home – Increase of value on investments – Deprecia)on on tangible assets
![Page 57: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/57.jpg)
CEU Password #2
Ra)o
![Page 58: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/58.jpg)
SO BASED ON FINANCIAL POSITION…
What would we tell a family interested in some of the following issues?
![Page 59: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/59.jpg)
So let’s explore various strategies
• Refinance a mortgage with FRM • Obtain an ARM • Use HELOC to consolidate debts • Use HELOC for emergency fund
![Page 60: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/60.jpg)
So let’s explore various strategies
• Payoff unsecured debt with assets earning lower rates of return
• Reduce expenses
![Page 61: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/61.jpg)
Chapter 4: Personal Financial Statements
Limita)ons of Financial Statement Analysis
• Infla)on • Use of es)mates • Few benchmarks for individuals
![Page 62: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/62.jpg)
Chapter 4: Personal Financial Statements
Sensi)vity Analysis & Risk Analysis
• Sensi)vity analysis allows manipula)on of input variables by small increments to determine the impact on the ra)o
• Risk analysis examines the uncertainty of cash flows to the individual – Business or investment risk – Financial risk
![Page 63: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/63.jpg)
Iden)fying SWOT
• Strengths • Weaknesses • Opportuni)es • Threats
![Page 64: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/64.jpg)
Iden)fying SWOT
• Think in terms of the ques)ons we asked earlier in our analysis – Cash flow constraints – Liquidity – Savings – Debt burden
• Cash flows • Net worth • Credit worthiness
– Housing burden
![Page 65: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/65.jpg)
Strengths
• Produc)ve investments • Commitment to saving
![Page 66: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/66.jpg)
Weaknesses
• Carrying consumer debt • Li;le Discre)onary Cash Flow to address debt issue
• Earnings growth is minimal
![Page 67: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/67.jpg)
Opportuni)es
• Invest more • Trim expenses to improve DCF • Stable income currently
![Page 68: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/68.jpg)
Threats
• Heavy debt load • Lack of liquidity creates vulnerability to income and resource shocks
![Page 69: Financial ratio and SWOT analysis](https://reader034.vdocuments.site/reader034/viewer/2022042521/55496d16b4c905525e8b4d99/html5/thumbnails/69.jpg)
CEU Informa)on
• Send an email to: [email protected] • Include:
– Both CEU Passwords given in this presenta)on – Your first and last name
• Emails must be received by: Wednesday, April 17, 2013 at 5 p.m. ET