1. Markets Lead to Change
How markets lead innovation and product development.
5 questions for evaluating market opportunity.
Application: Identify market forces and how your business is responding.
2. Change Requires Innovation
Product Life Cycle.
Market, technology and product curves.
Innovation leads to products that require new business models which require capital.
3. Innovation Requires Capital
Cash cycle: Financing, Investing, Operations, Return.
Two ways to get capital: Debt and Equity.
4. Capital Requires Management & Financial Reports
Investors are interested in performance.
Application: Build a Balance Sheet.
Application: Build an Income Statement.
• Revenue
• Variable and fixed costs
• Depreciation
• What do you do with Net Income
• Earnings per Share
• Break Even Analysis
Application: Cash Flows.
• Sources and uses
• Cash flow from operations, investing, financing
• Cash flow statement
• Discussion: What is impact of cash on…ex: slow receivables;
slow payables; poor forecasting; poor quality; inventory
5. How do you Impact Net Income
What does this mean for you?
How you and your team can impact net income (increase shareholder value).
Application: Propose 3 ways your team can impact Net Income.
Creating the Justification for your Action
• Create an Financial Justification
• Create Discounted Cash flow (DCF)
• Figuring WACC
• Do a Sensitivity Analysis
Application: DCF for one of your actions.
Next steps: Turn your project into results. |