Financing and Financing and ContractsContracts

becoming an independent organization

1. Capital needs

2. Capital resources & borrowed capital

3. Investment & Balanced Scorecard

4. Financial Decisions & contracts

5. Scenario as a method

Clearing/knowing the intern budget

Transparency

Realistic analysis of costs

Realistic targets

B. Rahn

1. Capital needs

2. Capital resources & borrowed capital

3. Investment & Balanced Scorecard

4. Financial Decisions & contracts

5. Scenario as a method

B. Rahn

budget coststargets

Capital needs for investments

As a result you check:

Capital resources of your organization

(remember the fundraisers for gaining more!!!)

Is your own capital enough?

1. Capital needs

2. Capital resources & borrowed

capital

3. Investment & Balanced Scorecard

4. Financial Decisions & contracts

5. Scenario as a method

B. Rahn

1. Capital needs

2. Capital resources & borrowed

capital

3. Investment & Balanced Scorecard

4. Financial Decisions & contracts

5. Scenario as a method

B. Rahn

Of course you need money from the bank and it

could be more than your own money (maybe 60/40)

– what is the best way?

More from the bank or more by the organization???

1. Capital needs

2. Capital resources & borrowed

capital

3. Investment & Balanced Scorecard

4. Financial Decisions & contracts

5. Scenario as a method

B. Rahn

The LEVERAGEEFFECT

The income-return of your OWN Capital resources is

raising although you have more money from the bank

(debits). The reason is that your interest rates at the bank

are very low at this time, you pay your debits and your

business is running well!

What is the risk here?

1. Capital needs

2. Capital resources & borrowed

capital

3. Investment & Balanced Scorecard

4. Financial Decisions & contracts

5. Scenario as a method

B. Rahn

CASHFLOW

Is the main description of „liquid money“ – at the end of

the year for investements and for paying debits. So the

analysis of the CashFlow is important for your next

decisions and investment-plans for the next period.

1. Capital needs

2. Capital resources & borrowed capital

3. Investment & Balanced Scorecard

4. Financial Decisions & contracts

5. Scenario as a method

B. Rahn

Definition

Investment: Payments which start with paying (pay-out)

Financing: Payments which starts with investing money

(budgeting)

(where does the money come from for the investment?)

(think about buying real estates)

1. Capital needs

2. Capital resources & borrowed capital

3. Investment & Balanced Scorecard

4. Financial Decisions & contracts

5. Scenario as a method

B. Rahn

Balanced Scorecard (Kaplan, Norton 1996)

Is developed for a longterm scoring of strategic planning.

For a whole successful Organization-process, not only the

economic state is important. The Balanced Scorecard is

for the whole worth and efficency of an organization with

special points:

1. Capital needs

2. Capital resources & borrowed capital

3. Investment & Balanced Scorecard

4. Financial Decisions & contracts

5. Scenario as a method

B. Rahn

Balanced Scorecard (Kaplan, Norton 1996)FinancesFinances

Learning & Evolution

CustomersCustomersInternal

processesInternal

processesVision

1. Capital needs

2. Capital resources & borrowed capital

3. Investment & Balanced Scorecard

4. Financial Decisions & contracts

5. Scenario as a method

B. Rahn

What are we doing with this Know-How?

Based on the capital needs, the CashFlow-analysis

and the strategy from the Balanced Scorecard the

organization can decide the next steps and talk with the

bank. The main target is to get a low interest-rate for a

longterm-contract!

1. Capital needs

2. Capital resources & borrowed capital

3. Planning an investment

4. Financial Decisions & contracts

5. Scenario as a method

B. Rahn

Contract negotiations

The contract must include all conditions of

the organization and of the bank!

The main target is to get an interest rate which is low and

fixed for a long term.

WHY ?

1. Capital needs

2. Capital resources & borrowed capital

3. Planning an investment

4. Financial Decisions & contracts

5. A Scenario as a method

B. Rahn

Finances clear, contracts made -> First Scenario!

The main target of the scenario-method is to check the

evolution in the future based on the planning and

contracts which are made. Mainly the interest-rate-

trend, stocks, contract basis and maybe changings in the

local law.

1. Capital needs

2. Capital resources & borrowed capital

3. Planning an investment

4. Financial Decisions & contracts

5. A Scenario as a method

B. Rahn

Scenario-method: A prognosis

Analysing the tasks in the future

What is the ordering / trend?

Influences (neg., pos.)?

Results!?!

ConclusionConclusion Analysing the capital needs

Leverageeffect

CashFlow

Balanced Scorecard

Negotiations (Contracts)

Scenario-method B. Rahn

Thanks for your Thanks for your attention attention