Chapter
1 STAGES IN THE DEVELOPMENT OF A BUSINESS AND FINANCIAL MODEL
2 DEVELOPING
THE RESEARCH QUESTION AND OUTPUT DEFINITION
Output definitions, examples, financial outputs
3 VISUAL THINKING TO DEVELOP FUNDAMENTAL QUESTIONS
Challenging the traditional business model
New methods and approaches –
a business model reflecting
the world as it is today
Structured Visual Thinking
(a trademark of Group Partners): principles for a dynamic world
An architectural approach to
building a future
Basics of input definition
5 SCENARIO IDENTIFICATION
Populating the spreadsheet with input values and formulae
Running different scenarios
Using Excel Scenario Manager for what-if analysis
Scenarios versus projections
6 BUILDING
A SIMPLE MODEL
Data extraction using Excel pivot tables
Some reminders of best practice
Reasons for failure of a model and how to avoid them
Using charts to help concentrate
on the most important variables in
an organization
Charts for break-even analysis
Presenting data and charts to communicate clearly
Using Excel pivot charts to show extracted data
Departmental budgets and
variance analysis
Some key departmental budgets
Sales budgets and forecasts are
key to other budgets
Elements of a sales budget
10 PRODUCTION – MATERIAL, LABOUR AND DIRECT OVERHEAD BUDGETs
Gross margin and profit budget
Margin and profit sensitivity
Departmental budget spreadsheet
11 FIXED ASSETS AND DEPRECIATION
Accounting depreciation, straight line and reducing balance
Additions and disposals of assets
Tax depreciation (capital allowances in the UK)
12 MANAGING AND MODELLING
CASH FLOW AND WORKING CAPITAL
13 INVESTMENT APPRAISAL MODELS
Accounting rate of return (ARR)
Discounted cash flow and net present value/internal rate of return
The average and the marginal costs of capital
Balancing equity and external borrowing
Risk and the cost of capital
Methods of determining the cost of equity
Significance of the cost of capital
15 BUSINESS VALUATION MODELS
The value of a business and
building value
Methods of valuing a business
Who can value a business and what information do they require?
Examples of valuation methods and their appropriateness to valuation reasons
Earnings-based valuations
Cash flow valuation models
Discounted cash flow (DCF) method of valuation
16 PERFORMANCE INDICATORS
Key performance indicators (KPIs)
The integrated standard costing system
Activity-based costing (ABC)
17 MODELLING THE COMPANY BALANCE SHEET, P&L AND RATIO ANALYSIS
Analysis and financial ratios
Financial formulae and using Excel fx functions
Excel financial functions
19 BUILDING A BUSINESS MODEL
Modelling a start-up business
Expected returns for risk – proprietors’ pay, bank interest
Forecast profit and loss statement and sales requirement
Required marketing and selling activity
Critical path analysis (CPA)
Gantt charts and resource planning
Modelling projects using Excel
21 INTEGRATION, COMPLEXITY AND BUSINESS MODELS
The level of integration required
Data and systems integration
22 BUSINESS MODELS FOR THE GREEN ECONOMY
Future challenges and opportunities
Demand for greener products and services
Effects of climate change and
other factors
Appendix 1 Excel shortcut commands
Appendix 2 Chart for business model build project
Appendix 3 Discounted cash flow tables
Business and Financial Models
( Strategic Success )
Disclaimer: Any content in publications that violate the sovereignty, the constitution or regulations of the PRC is not accepted or approved by CNPIEC.
