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Welcome to QUAD Business Builder A 2½ minute introduction to ‘Cash Efficiency & the Cost of Working Capital’

Welcome to QUAD Business Builder A 2½ minute introduction to ‘Cash Efficiency & the Cost of Working Capital’. www.QUAD-BusinessBuilder.co.uk. © QUAD Business Software Ltd.

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Welcome to QUAD Business Builder A 2½ minute introduction to ‘Cash Efficiency & the Cost of Working Capital’

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  1. Welcome toQUAD Business BuilderA 2½ minute introduction to ‘Cash Efficiency & the Cost of Working Capital’ www.QUAD-BusinessBuilder.co.uk © QUAD Business Software Ltd

  2. ‘Cash Efficiency’ and the ‘Cost of Working Capital’provide a completely new perspective on the quality (rather than the quantity) of turnover.Here’s a bit of background describing how they work... © QUAD Business Software Ltd

  3. ‘Cash Efficiency’ and the ‘Cost of Working Capital’provide a completely new perspective on the quality (rather than the quantity) of turnover.Here’s a bit of background describing how they work... © QUAD Business Software Ltd

  4. About Cash Efficiencyand the Cost of Working Capital © QUAD Business Software Ltd

  5. About Cash Efficiencyand the Cost of Working Capital Gross Profit provides an indication of the percentage of any additional turnover that would drop straight to the bottom-line to increase profits (or reduce losses). © QUAD Business Software Ltd

  6. About Cash Efficiencyand the Cost of Working Capital Gross Profit provides an indication of the percentage of any additional turnover that would drop straight to the bottom-line to increase profits (or reduce losses). © QUAD Business Software Ltd

  7. About Cash Efficiency and the Cost of Working Capital Gross Profit provides an indication of the percentage of any additional turnover that would drop straight to the bottom-line to increase profits (or reduce losses). Cash Efficiency provides an indication of the percentage of the same additional turnover that would be retained in the business bank account. © QUAD Business Software Ltd

  8. About Cash Efficiency and the Cost of Working Capital Gross Profit provides an indication of the percentage of any additional turnover that would drop straight to the bottom-line to increase profits (or reduce losses). Cash Efficiency provides an indication of the percentage of the same additional turnover that would be retained in the business bank account. © QUAD Business Software Ltd

  9. About Cash Efficiency and the Cost of Working Capital Gross Profit provides an indication of the percentage of any additional turnover that would drop straight to the bottom-line to increase profits (or reduce losses). Cash Efficiency provides an indication of the percentage of the same additional turnover that would be retained in the business bank account. Cost of Working Capital provides an indication of the percentage of the same additional turnover that would be required to fund any resultant changes in Debtors / Creditors / Stock etc. © QUAD Business Software Ltd

  10. About Cash Efficiency and the Cost of Working Capital Gross Profit provides an indication of the percentage of any additional turnover that would drop straight to the bottom-line to increase profits (or reduce losses). Cash Efficiency provides an indication of the percentage of the same additional turnover that would be retained in the business bank account. Cost of Working Capital provides an indication of the percentage of the same additional turnover that would be required to fund any resultant changes in Debtors / Creditors / Stock etc. © QUAD Business Software Ltd

  11. About Cash Efficiency and the Cost of Working Capital Gross Profit provides an indication of the percentage of any additional turnover that would drop straight to the bottom-line to increase profits (or reduce losses). Cash Efficiency provides an indication of the percentage of the same additional turnover that would be retained in the business bank account. Think about four different businesses from the perspective of how they receive their income and discharge their expenses Cost of Working Capital provides an indication of the percentage of the same additional turnover that would be required to fund any resultant changes in Debtors / Creditors / Stock etc. © QUAD Business Software Ltd

  12. About Cash Efficiency and the Cost of Working Capital Gross Profit provides an indication of the percentage of any additional turnover that would drop straight to the bottom-line to increase profits (or reduce losses). Cash Efficiency provides an indication of the percentage of the same additional turnover that would be retained in the business bank account. Income Expense Think about four different businesses from the perspective of how they receive their income and discharge their expenses Cost of Working Capital provides an indication of the percentage of the same additional turnover that would be required to fund any resultant changes in Debtors / Creditors / Stock etc. © QUAD Business Software Ltd

  13. About Cash Efficiency and the Cost of Working Capital Gross Profit provides an indication of the percentage of any additional turnover that would drop straight to the bottom-line to increase profits (or reduce losses). Cash Efficiency provides an indication of the percentage of the same additional turnover that would be retained in the business bank account. Income Expense 100% Cash 100% Cash Neutral Credit Strain and Credit Gain (Think ‘Bookmaker’ or ‘Market Trader’) Cost of Working Capital provides an indication of the percentage of the same additional turnover that would be required to fund any resultant changes in Debtors / Creditors / Stock etc. © QUAD Business Software Ltd

  14. About Cash Efficiency and the Cost of Working Capital Gross Profit provides an indication of the percentage of any additional turnover that would drop straight to the bottom-line to increase profits (or reduce losses). Cash Efficiency provides an indication of the percentage of the same additional turnover that would be retained in the business bank account. Income Expense 100% Cash 100% Cash Neutral Credit Strain and Credit Gain (Think ‘Bookmaker’ or ‘Market Trader’) Cost of Working Capital provides an indication of the percentage of the same additional turnover that would be required to fund any resultant changes in Debtors / Creditors / Stock etc. © QUAD Business Software Ltd

  15. About Cash Efficiency and the Cost of Working Capital Gross Profit provides an indication of the percentage of any additional turnover that would drop straight to the bottom-line to increase profits (or reduce losses). Cash Efficiency provides an indication of the percentage of the same additional turnover that would be retained in the business bank account. Income Expense 100% Cash 100% Cash Neutral Credit Strain and Credit Gain Cash Efficiency = Gross Profit Cost of Working Capital provides an indication of the percentage of the same additional turnover that would be required to fund any resultant changes in Debtors / Creditors / Stock etc. © QUAD Business Software Ltd

  16. About Cash Efficiency and the Cost of Working Capital Gross Profit provides an indication of the percentage of any additional turnover that would drop straight to the bottom-line to increase profits (or reduce losses). Cash Efficiency provides an indication of the percentage of the same additional turnover that would be retained in the business bank account. Income Expense 100% Cash 100% Cash Neutral Credit Strain and Credit Gain Cash Efficiency = Gross Profit Cost of Working Capital provides an indication of the percentage of the same additional turnover that would be required to fund any resultant changes in Debtors / Creditors / Stock etc. © QUAD Business Software Ltd

  17. About Cash Efficiency and the Cost of Working Capital Gross Profit provides an indication of the percentage of any additional turnover that would drop straight to the bottom-line to increase profits (or reduce losses). Cash Efficiency provides an indication of the percentage of the same additional turnover that would be retained in the business bank account. Income Expense 100% Cash 100% Cash Neutral Credit Strain and Credit Gain Cash Efficiency = Gross Profit 100% Cash Credit Gain Credit Gain exceeds Credit Strain (Think ‘Retailing’ or ‘Hospitality’) Cost of Working Capital provides an indication of the percentage of the same additional turnover that would be required to fund any resultant changes in Debtors / Creditors / Stock etc. © QUAD Business Software Ltd

  18. About Cash Efficiency and the Cost of Working Capital Gross Profit provides an indication of the percentage of any additional turnover that would drop straight to the bottom-line to increase profits (or reduce losses). Cash Efficiency provides an indication of the percentage of the same additional turnover that would be retained in the business bank account. Income Expense 100% Cash 100% Cash Neutral Credit Strain and Credit Gain Cash Efficiency = Gross Profit 100% Cash Credit Gain Credit Gain exceeds Credit Strain (Think ‘Retailing’ or ‘Hospitality’) Cost of Working Capital provides an indication of the percentage of the same additional turnover that would be required to fund any resultant changes in Debtors / Creditors / Stock etc. © QUAD Business Software Ltd

  19. About Cash Efficiency and the Cost of Working Capital Gross Profit provides an indication of the percentage of any additional turnover that would drop straight to the bottom-line to increase profits (or reduce losses). Cash Efficiency provides an indication of the percentage of the same additional turnover that would be retained in the business bank account. Income Expense 100% Cash 100% Cash Neutral Credit Strain and Credit Gain Cash Efficiency = Gross Profit 100% Cash Credit Gain Credit Gain exceeds Credit Strain Cash Efficiency > Gross Profit Cost of Working Capital provides an indication of the percentage of the same additional turnover that would be required to fund any resultant changes in Debtors / Creditors / Stock etc. © QUAD Business Software Ltd

  20. About Cash Efficiency and the Cost of Working Capital Gross Profit provides an indication of the percentage of any additional turnover that would drop straight to the bottom-line to increase profits (or reduce losses). Cash Efficiency provides an indication of the percentage of the same additional turnover that would be retained in the business bank account. Income Expense 100% Cash 100% Cash Neutral Credit Strain and Credit Gain Cash Efficiency = Gross Profit 100% Cash Credit Gain Credit Gain exceeds Credit Strain Cash Efficiency > Gross Profit Cost of Working Capital provides an indication of the percentage of the same additional turnover that would be required to fund any resultant changes in Debtors / Creditors / Stock etc. © QUAD Business Software Ltd

  21. About Cash Efficiency and the Cost of Working Capital Gross Profit provides an indication of the percentage of any additional turnover that would drop straight to the bottom-line to increase profits (or reduce losses). Cash Efficiency provides an indication of the percentage of the same additional turnover that would be retained in the business bank account. Income Expense 100% Cash 100% Cash Neutral Credit Strain and Credit Gain Cash Efficiency = Gross Profit 100% Cash Credit Gain Credit Gain exceeds Credit Strain Cash Efficiency > Gross Profit Credit Strain 100% Cash Credit Strain exceeds Credit Gain (Think ‘Start-ups’ or ‘insolvencies’) Cost of Working Capital provides an indication of the percentage of the same additional turnover that would be required to fund any resultant changes in Debtors / Creditors / Stock etc. © QUAD Business Software Ltd

  22. About Cash Efficiency and the Cost of Working Capital Gross Profit provides an indication of the percentage of any additional turnover that would drop straight to the bottom-line to increase profits (or reduce losses). Cash Efficiency provides an indication of the percentage of the same additional turnover that would be retained in the business bank account. Income Expense 100% Cash 100% Cash Neutral Credit Strain and Credit Gain Cash Efficiency = Gross Profit 100% Cash Credit Gain Credit Gain exceeds Credit Strain Cash Efficiency > Gross Profit Credit Strain 100% Cash Credit Strain exceeds Credit Gain (Think ‘Start-ups’ or ‘insolvencies’) Cost of Working Capital provides an indication of the percentage of the same additional turnover that would be required to fund any resultant changes in Debtors / Creditors / Stock etc. © QUAD Business Software Ltd

  23. About Cash Efficiency and the Cost of Working Capital Gross Profit provides an indication of the percentage of any additional turnover that would drop straight to the bottom-line to increase profits (or reduce losses). Cash Efficiency provides an indication of the percentage of the same additional turnover that would be retained in the business bank account. Income Expense 100% Cash 100% Cash Neutral Credit Strain and Credit Gain Cash Efficiency = Gross Profit 100% Cash Credit Gain Credit Gain exceeds Credit Strain Cash Efficiency > Gross Profit Credit Strain 100% Cash Credit Strain exceeds Credit Gain Cash Efficiency < Gross Profit Cost of Working Capital provides an indication of the percentage of the same additional turnover that would be required to fund any resultant changes in Debtors / Creditors / Stock etc. © QUAD Business Software Ltd

  24. About Cash Efficiency and the Cost of Working Capital Gross Profit provides an indication of the percentage of any additional turnover that would drop straight to the bottom-line to increase profits (or reduce losses). Cash Efficiency provides an indication of the percentage of the same additional turnover that would be retained in the business bank account. Income Expense 100% Cash 100% Cash Neutral Credit Strain and Credit Gain Cash Efficiency = Gross Profit 100% Cash Credit Gain Credit Gain exceeds Credit Strain Cash Efficiency > Gross Profit Credit Strain 100% Cash Credit Strain exceeds Credit Gain Cash Efficiency < Gross Profit Cost of Working Capital provides an indication of the percentage of the same additional turnover that would be required to fund any resultant changes in Debtors / Creditors / Stock etc. © QUAD Business Software Ltd

  25. About Cash Efficiency and the Cost of Working Capital Gross Profit provides an indication of the percentage of any additional turnover that would drop straight to the bottom-line to increase profits (or reduce losses). Cash Efficiency provides an indication of the percentage of the same additional turnover that would be retained in the business bank account. Income Expense 100% Cash 100% Cash Neutral Credit Strain and Credit Gain Cash Efficiency = Gross Profit 100% Cash Credit Gain Credit Gain exceeds Credit Strain Cash Efficiency > Gross Profit Credit Strain 100% Cash Credit Strain exceeds Credit Gain Cash Efficiency < Gross Profit Credit Strain Credit Gain Credit Strain typically exceeds Credit Gain (Think ‘Manufacturing’ or ‘Service’) Cost of Working Capital provides an indication of the percentage of the same additional turnover that would be required to fund any resultant changes in Debtors / Creditors / Stock etc. © QUAD Business Software Ltd

  26. About Cash Efficiency and the Cost of Working Capital Gross Profit provides an indication of the percentage of any additional turnover that would drop straight to the bottom-line to increase profits (or reduce losses). Cash Efficiency provides an indication of the percentage of the same additional turnover that would be retained in the business bank account. Income Expense 100% Cash 100% Cash Neutral Credit Strain and Credit Gain Cash Efficiency = Gross Profit 100% Cash Credit Gain Credit Gain exceeds Credit Strain Cash Efficiency > Gross Profit Credit Strain 100% Cash Credit Strain exceeds Credit Gain Cash Efficiency < Gross Profit Credit Strain Credit Gain Credit Strain typically exceeds Credit Gain (Think ‘Manufacturing’ or ‘Service’) Cost of Working Capital provides an indication of the percentage of the same additional turnover that would be required to fund any resultant changes in Debtors / Creditors / Stock etc. © QUAD Business Software Ltd

  27. About Cash Efficiency and the Cost of Working Capital Gross Profit provides an indication of the percentage of any additional turnover that would drop straight to the bottom-line to increase profits (or reduce losses). Cash Efficiency provides an indication of the percentage of the same additional turnover that would be retained in the business bank account. Income Expense 100% Cash 100% Cash Neutral Credit Strain and Credit Gain Cash Efficiency = Gross Profit 100% Cash Credit Gain Credit Gain exceeds Credit Strain Cash Efficiency > Gross Profit Credit Strain 100% Cash Credit Strain exceeds Credit Gain Cash Efficiency < Gross Profit Credit Strain Credit Gain Credit Strain typically exceeds Credit Gain Cash Efficiency (normally) < Gross Profit Cost of Working Capital provides an indication of the percentage of the same additional turnover that would be required to fund any resultant changes in Debtors / Creditors / Stock etc. © QUAD Business Software Ltd

  28. About Cash Efficiency and the Cost of Working Capital Gross Profit provides an indication of the percentage of any additional turnover that would drop straight to the bottom-line to increase profits (or reduce losses). Cash Efficiency provides an indication of the percentage of the same additional turnover that would be retained in the business bank account. Income Expense 100% Cash 100% Cash Neutral Credit Strain and Credit Gain Cash Efficiency = Gross Profit 100% Cash Credit Gain Credit Gain exceeds Credit Strain Cash Efficiency > Gross Profit Credit Strain 100% Cash Credit Strain exceeds Credit Gain Cash Efficiency < Gross Profit Credit Strain Credit Gain Credit Strain typically exceeds Credit Gain Cash Efficiency (normally) < Gross Profit Cost of Working Capital provides an indication of the percentage of the same additional turnover that would be required to fund any resultant changes in Debtors / Creditors / Stock etc. © QUAD Business Software Ltd

  29. About Cash Efficiency and the Cost of Working Capital Gross Profit provides an indication of the percentage of any additional turnover that would drop straight to the bottom-line to increase profits (or reduce losses). Cash Efficiency provides an indication of the percentage of the same additional turnover that would be retained in the business bank account. Income Expense 100% Cash 100% Cash Neutral Credit Strain and Credit Gain Cash Efficiency = Gross Profit 100% Cash Credit Gain Credit Gain exceeds Credit Strain Cash Efficiency > Gross Profit Credit Strain 100% Cash Credit Strain exceeds Credit Gain Cash Efficiency < Gross Profit Credit Strain Credit Gain Credit Strain typically exceeds Credit Gain Cash Efficiency (normally) < Gross Profit Cost of Working Capital provides an indication of the percentage of the same additional turnover that would be required to fund any resultant changes in Debtors / Creditors / Stock etc. © QUAD Business Software Ltd

  30. About Cash Efficiency and the Cost of Working Capital Gross Profit provides an indication of the percentage of any additional turnover that would drop straight to the bottom-line to increase profits (or reduce losses). Cash Efficiency provides an indication of the percentage of the same additional turnover that would be retained in the business bank account. Income Expense 100% Cash 100% Cash Neutral Credit Strain and Credit Gain Cash Efficiency = Gross Profit 100% Cash Credit Gain Credit Gain exceeds Credit Strain Cash Efficiency > Gross Profit Credit Strain 100% Cash Credit Strain exceeds Credit Gain Cash Efficiency < Gross Profit Credit Strain Credit Gain Credit Strain typically exceeds Credit Gain Cash Efficiency (normally) < Gross Profit Cost of Working Capital provides an indication of the percentage of the same additional turnover that would be required to fund any resultant changes in Debtors / Creditors / Stock etc. © QUAD Business Software Ltd

  31. About Cash Efficiency and the Cost of Working Capital Gross Profit provides an indication of the percentage of any additional turnover that would drop straight to the bottom-line to increase profits (or reduce losses). Cash Efficiency provides an indication of the percentage of the same additional turnover that would be retained in the business bank account. Income Expense 100% Cash 100% Cash Neutral Credit Strain and Credit Gain Cash Efficiency = Gross Profit 100% Cash Credit Gain Credit Gain exceeds Credit Strain Cash Efficiency > Gross Profit Credit Strain 100% Cash Credit Strain exceeds Credit Gain Cash Efficiency < Gross Profit Credit Strain Credit Gain Credit Strain typically exceeds Credit Gain Cash Efficiency (normally) < Gross Profit Cost of Working Capital provides an indication of the percentage of the same additional turnover that would be required to fund any resultant changes in Debtors / Creditors / Stock etc. © QUAD Business Software Ltd

  32. As with Gross Profit, the opening values for Cash Efficiency and Cost of Working Capital can be very illuminating.But what really matters is what happens to them when you change things... © QUAD Business Software Ltd

  33. As with Gross Profit, the opening values for Cash Efficiency and Cost of Working Capital can be very illuminating.But what really matters is what happens to them when you change things... © QUAD Business Software Ltd

  34. As with Gross Profit, the opening values for Cash Efficiency and Cost of Working Capital can be very illuminating.But what really matters is what happens to them when you change things... © QUAD Business Software Ltd

  35. How it all works… Here’s where QUAD reports the opening Cash Efficiency and Cost of Working Capital from the source-data. And having spent less than 10 minutes loading this model from a set of accounts we now know that this business would bank 17p in every £1 of turnover and would require 22p to fund working capital. © QUAD Business Software Ltd

  36. How it all works… Here’s where QUAD reports the opening Cash Efficiency and Cost of Working Capital from the source-data. And having spent less than 10 minutes loading this model from a set of accounts we now know that this business would bank 17p in every £1 of turnover and would require 22p to fund working capital. © QUAD Business Software Ltd

  37. How it all works… Here’s where QUAD reports the opening Cash Efficiency and Cost of Working Capital from the source-data. And having spent less than 10 minutes loading this model from a set of accounts we now know that this business would bank 17p in every £1 of turnover and would require 22p to fund working capital. © QUAD Business Software Ltd

  38. How it all works… Here’s where QUAD reports the opening Cash Efficiency and Cost of Working Capital from the source-data. And having spent less than 10 minutes loading this model from a set of accounts we now know that this business would bank 17p in every £1 of turnover and would require 22p to fund working capital. Here’s where QUAD shows the effects of the current driver-settings in the yellow section of the Diagnostic Review. And looking at the ‘Change’ figures we know that this scenario would deliver a 10% improvement in Margin along with a 47% increase in Cash Efficiency and a 17% reduction in the Cost of Working Capital. © QUAD Business Software Ltd

  39. How it all works… Here’s where QUAD reports the opening Cash Efficiency and Cost of Working Capital from the source-data. And having spent less than 10 minutes loading this model from a set of accounts we now know that this business would bank 17p in every £1 of turnover and would require 22p to fund working capital. Here’s where QUAD shows the effects of the current driver-settings in the yellow section of the Diagnostic Review. And looking at the ‘Change’ figures we know that this scenario would deliver a 10% improvement in Margin along with a 47% increase in Cash Efficiency and a 17% reduction in the Cost of Working Capital. © QUAD Business Software Ltd

  40. How it all works… Here’s where QUAD reports the opening Cash Efficiency and Cost of Working Capital from the source-data. And having spent less than 10 minutes loading this model from a set of accounts we now know that this business would bank 17p in every £1 of turnover and would require 22p to fund working capital. Here’s where QUAD shows the effects of the current driver-settings in the yellow section of the Diagnostic Review. And looking at the ‘Change’ figures we know that this scenario would deliver a 10% improvement in Margin along with a 47% increase in Cash Efficiency and a 17% reduction in the Cost of Working Capital. © QUAD Business Software Ltd

  41. How it all works… Here’s where QUAD reports the opening Cash Efficiency and Cost of Working Capital from the source-data. And having spent less than 10 minutes loading this model from a set of accounts we now know that this business would bank 17p in every £1 of turnover and would require 22p to fund working capital. Here’s where QUAD shows the effects of the current driver-settings in the yellow section of the Diagnostic Review. And looking at the ‘Change’ figures we know that this scenario would deliver a 10% improvement in Margin along with a 47% increase in Cash Efficiency and a 17% reduction in the Cost of Working Capital. Hardly surprising then that Cash Flow has improved by £43k. © QUAD Business Software Ltd

  42. How it all works… Here’s where QUAD reports the opening Cash Efficiency and Cost of Working Capital from the source-data. And having spent less than 10 minutes loading this model from a set of accounts we now know that this business would bank 17p in every £1 of turnover and would require 22p to fund working capital. Here’s where QUAD shows the effects of the current driver-settings in the yellow section of the Diagnostic Review. And looking at the ‘Change’ figures we know that this scenario would deliver a 10% improvement in Margin along with a 47% increase in Cash Efficiency and a 17% reduction in the Cost of Working Capital. Hardly surprising then that Cash Flow has improved by £43k. © QUAD Business Software Ltd

  43. How it all works… Here’s where QUAD reports the opening Cash Efficiency and Cost of Working Capital from the source-data. And having spent less than 10 minutes loading this model from a set of accounts we now know that this business would bank 17p in every £1 of turnover and would require 22p to fund working capital. Here’s where QUAD shows the effects of the current driver-settings in the yellow section of the Diagnostic Review. And looking at the ‘Change’ figures we know that this scenario would deliver a 10% improvement in Margin along with a 47% increase in Cash Efficiency and a 17% reduction in the Cost of Working Capital. Hardly surprising then that Cash Flow has improved by £43k. © QUAD Business Software Ltd

  44. How it all works… © QUAD Business Software Ltd

  45. How it all works… (And it takes less than 10 minutes to load) © QUAD Business Software Ltd

  46. How it all works… (And it takes less than 10 minutes to load) © QUAD Business Software Ltd

  47. www.QUAD-BusinessBuilder.co.uk Thank you for watching QUAD Business BuilderHelping to build better businesses Please press ‘Esc’ to quit this presentation © QUAD Business Software Ltd

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