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Financial Analysis for Trainee Millionaires

Buzz Ventures Ratio Analysis Types of Finance Definitions: http://www.accountrain.com/definitions.html Financial Statements from SEDAR www.sedar.com/issuers/company_issuers_a_en.htm. Financial Analysis for Trainee Millionaires. Income Statement & Balance Sheet. Income Statement

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Financial Analysis for Trainee Millionaires

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  1. Buzz Ventures Ratio Analysis Types of Finance Definitions: http://www.accountrain.com/definitions.html Financial Statements from SEDAR www.sedar.com/issuers/company_issuers_a_en.htm Financial Analysis for Trainee Millionaires

  2. Income Statement & Balance Sheet • Income Statement • Aka Profit and Loss Account, it has two sections: Revenue (or Income) and Expenses. • Income – Expenses = Profit • Profit can be added to the Retained Earnings section of the Balance Sheet and/or distributed directly to the shareholders as a Dividend payment • Balance Sheet • consists of two sections: Assets and Liabilities • A = L • Assets can be Fixed or Current • Liability can be LT, Current or Equity

  3. Aastra Technologies Limited www.sedar.com/DisplayCompanyDocuments.do?lang=EN&issuerNo=00001712 • FISCAL 2011 FINANCIAL HIGHLIGHTS • ACHIEVED SALES OF $693.0 MILLION. • CLOSED THE YEAR WITH 55 CONSECUTIVE QUARTERS OF PROFITABILITY. • GENERATED $70.4 MILLION OF CASH FLOW FROM OPERATIONS. • CLOSED THE YEAR WITH $134.1 MILLION IN CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

  4. Aastra Annual Balance Sheets 2011, 2010, 2009

  5. Aastra Annual Income Statements

  6. Worked Examples • Use the spreadsheet Aastra Financials 2011.xls • Follow the demonstration of a ratio analysis for 2011 as it is demonstrated. • THEN practice by doing the same ratio analysis for 2010.

  7. Ratio Analysis • Useful with comparisons of results for the same company down time. • Very useful when comparing one company with its competitors OR with the industry. • BUT you will need to adjust each set of accounts to use the same accounting assumptions or systems.

  8. Sources of Finance • Angel Investors • Friends • Family • Fools • Early stage to Very early stage investment. • Exit Strategy • Dorm room to Board Room to an IPO in 7 years.

  9. Venture Capital • Expect 15 times return on investments ON AVERAGE. • Pressure to perform • Will take majority shareholding (allows control) • Ruthless

  10. Bank Loans • Will almost always ask for a personal guarantee of a business loan. • If the company defaults they may sell your home. • High interest charge but no share in the profits • Need to see growth in sales income over time.

  11. MicroFinance • Canadian Youth Business Foundation • Up to $25,000 loan • Low interest rates. • Provide mentoring & support • Can be matched with a $25,000 loan from BDC.

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