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FINANCIAL MANAGEMENT

FINANCIAL MANAGEMENT. 12.1 Manage Your Cash Flow 12.2 Analyze Your Financial Performance 12.3 Hire Experts. Lesson 12.1 MANAGE YOUR CASH FLOW. Create a cash budget. Examine the role of credit. Improve your business’s cash flow. GOALS. CREATE A CASH BUDGET. Construct a cash budget

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FINANCIAL MANAGEMENT

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  1. Chapter 12 FINANCIAL MANAGEMENT 12.1 Manage Your Cash Flow 12.2 Analyze Your Financial Performance 12.3 Hire Experts

  2. Chapter 12 Lesson 12.1MANAGE YOUR CASH FLOW • Create a cash budget. • Examine the role of credit. • Improve your business’s cash flow. GOALS

  3. Chapter 12 CREATE A CASH BUDGET • Construct a cash budget • Use an electronic spreadsheet

  4. Chapter 12 EXAMINE THE ROLE OF CREDIT • Types of credit • Credit procedures • Uncollectible accounts

  5. Chapter 12 IMPROVE YOUR CASH FLOW • Increase your cash receipts • Increase your capital • Reduce your disbursements • Control inventory and payroll • Slow bill payment • Cut other expenses

  6. Chapter 12 Lesson 12.2ANALYZE YOUR FINANCIAL PERFORMANCE • Analyze your business’s financial statements. • Calculate the level of sales you need to achieve to make a profit. GOALS

  7. Chapter 12 ANALYZE FINANCIAL STATEMENTS • Analyze your sales • Analyze sales by product • Analyze net profit on sales • Calculate net sales • Calculate net income after taxes • Why net profit on sales is important • Set and meet profit goals

  8. Chapter 12 PERFORM BREAKEVEN ANALYSIS • Measure costs, sales, and profits • Calculate your breakeven paint

  9. Chapter 12 BREAKEVEN POINT • The breakeven point is the volume of sales that must be made to cover all of the expenses of a business.

  10. $12,500 10,000 7,500 5,000 2,500 Total Revenue Profits Total Costs and Revenues Total Variable Cost Breakeven Point Total Cost Losses Total Fixed Cost 0 750 1000 1250 1500 1750 Units Sold Chapter 12 Breakeven Point Graph

  11. Chapter 12 Lesson 12.3HIRE EXPERTS • Find professionals who can help you with the financial management of your business. • Identify the types of services financial experts provide. GOALS

  12. Chapter 12 TYPES OF PROFESSIONALS • Bankers • Attorneys • Accountants • Financial planners • Investment brokers

  13. Chapter 12 HOW TO CHOOSE A FINANCIAL ADVISOR • Research financial management so that you are familiar with the issues you need to deal with. • Consult other people in your industry. • Consider choosing a financial advisor who charges a fee, not a commission, for services.

  14. Chapter 12 THE SERVICES OF FINANCIAL EXPERTS • Financial planning • Strategic planning • Tax planning • Tax audit

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