infocom webinar: healthy companies
DESCRIPTION
Join InfoComm, Frank Coker and Tom Stimson as they discuss the tell-tale signs of a healthy company. They'll also look at promising signs in the AV industry (and one troubling one!)TRANSCRIPT
Signs of Healthy Company:Time for a Health Check!
Frank Coker, MBA, CMCCEOCoreConnex, [email protected]
Tom Stimson, MBA, CTSCEOStimson Grouphttp://trstimson.com/[email protected]
AgendaSigns of Healthy Company
• Industry highlights• Basics• Scenarios• Importance of BI• Analytics with BI• Tips
Industry Numbers
• Sales and GM looking great• What’s happening to cash?
LOB Mix Changing
• Integration is steadily gaining• Major drop in Product Sales
Basics – Info Spectrum
How am I doing:• Now?• Trends – historical?• Trends – future?• Actual / goals?• Actual / benchmarks?• Compared to other
similar industries?
EASY(low value)
HARD(high value)
Why trend analysis?
• Trends show direction• Trends are a strong indication of future
direction• Trends are easy to compare among
peers• Combining multiple trend lines shows
where underlying problems lie – can’t be seen in standard financial data
Performance Analysis
Trends
Goals Benchmarks
Ratios
Question
• Are rising revenues always a sign of good health? yes/no
• Are falling revenues a sign of poor health? yes/no
• When can falling revenues be healthy?a. When gross margin is falling faster?
b. When cash is falling faster?
c. When expenses are falling faster?
Trends – Revenue/Expense
Revenue
Expense
Unhealthy
Time
$
Revenue
Expense
Time
$
Revenue
Expense
Time
$
Healthy
Revenue
Expense
Time
$
Revenue
Expense
Time
$
?? ??
Magic of Trend Lines
• Shows direction over time• Smooths out ups and downs• Trend slopes are comparable• Long-term + Short-term = real story
Trends – Time Adjusted
Long-term
Short-term
Unhealthy
Time
$
Healthy
$
Time
$
Revenue Growth
Long-term
Short-term
Long-term
Short-term
Time
$ $
Time
$
Long-term
Short-term
Future Trends
Future Trends
Trends - Benchmarks
Revenue
Industry Benchmark
Unhealthy
Time
$
Healthy
Revenue
Time
$Industry Benchmark
Trends – Goals, Benchmarks
Trends – Revenue/Cash
Revenue
Cash
Unhealthy
Time
$
Revenue
Cash
Time
$
Healthy
Revenue
Cash
Time
$
Revenue
Cash
Time
$
Trends – Goals, Benchmarks
Trends – COGS/Overheads
RevenueCOGS
Unhealthy
Time
$
Healthy
$
Overheads
RevenueCOGS
Time
$
Overheads
Revenue
COGS
Time
$
Overheads
Trends - Variability
Revenue
Unhealthy
Time
$
Healthy
Revenue
Time
$
Trends – Goals, Benchmarks
Benchmarks
What we see financially is that…• Business owners don’t know when they
are off track• Opportunities go unnoticed• Markets fluctuate – its hard to ride a
wave when you aren’t looking
Why is financial analysis more important now?
• Technology costs and profits decreasing• Technology margins are smaller• Growing demand for products and services• Economic squeeze making buyers more cost
conscious• Workforce expectations/productivity gap• Old business processes no longer apply• Industry consolidation will favor the fittest
New Generation Analysis
Combines data from multiple sources– Internal financial data– Internal operations metrics– External market data– External market benchmarks
Result: Business Intelligence
What are your numbers telling you about your biz?
• Too fast when margins are shrinking• Too slow when not keeping pace with
markets• Fat when there is no leverage • Vulnerable when revenues are erratic• Many other important messages….
Business Intelligence
Internal Financial Data and Operating Metrics• For each “industry standard” LOB• Combined with goals• Evaluated monthly• Integrated into management process
External Market Data and Benchmarks• Updated monthly and quarterly• Integrated into analytical reporting
External BI Problems(from most common sources)
• Survey based – not accurate• Out of date – data gathered for past year• Does not integrate financial and operating data• Not granular – can’t drill down by business
characteristics• Not dynamic – usually not available monthly or
quarterly
The “usual” problems… But InfoComm is Changing all that!
Poll – questions
1. Does your team get information on financial performance?
2. Do they know your financial priorities?
3. Do they help find solutions to financial problems?
The best progress occurs when the whole team is on the same page!
Let the whole team see the same picture!
Getting your Team on the Same Page
https://infocomm.corelytics.com
The Team Process
• Need to do it every month• Minimize the time (30 min monthly)• Focus on “3 big priorities” per month• Get everyone involved
– On the same page– Finding solutions– Producing results
Life on an island can be limited!
Free Financial Health Check
Your Company, Inc.
https://healthcheck.corelytics.com/pub/sign_up.aspx
For More Informationhttps://infocomm.corelytics.com
Thank You!