Live#5 financial analysis mooc
-
Upload
first-finance-institute -
Category
Economy & Finance
-
view
281 -
download
2
description
Transcript of Live#5 financial analysis mooc
FINANCIAL ANALYSIS MOOC WITH MARC BERTONECHELIVE SESSION #5 WEDNESDAY APRIL 2ND 2014
DEMOGRAPHIC DATA
FINANCIAL ANALYSIS MOOC WITH MARC BERTONECHELIVE SESSION #5 WEDNESDAY APRIL 2ND 2014
Max density( >300)
Average density(Entre 50 et 300)
Low density(<50)
Caption
Density = 0
323
160
83
7364
Source: Introduction quizz, 1243 participants, as of 27.03.2014
FINANCIAL ANALYSIS MOOC WITH MARC BERTONECHELIVE SESSION #5 WEDNESDAY APRIL 2ND 2014
Source: Introduction quizz, 1243 participants, as of 27.03.2014
Business Sector
Finance 48%
Management 36%
Other 28%
Accounting 25%
Economy 19%
Entrepreneurship 13%
Marketing 13%
Trade 8%
FINANCIAL ANALYSIS MOOC WITH MARC BERTONECHELIVE SESSION #5 WEDNESDAY APRIL 2ND 2014
39%
60%
1%
Did the MOOC met yourExpectations
Yes, I liked it
Yes, it was great.
Not at all
Yes
37%
60%
2%
Did you find the work loadacceptable?
It was fine
Yes, completely
Not really
10%
48%
42%
How would you rate the Gremlin Case?
grade 1
grade 2
grade 3
grade 4
grade 5
1%1%
8%
50%
40%
How would you rate the weekly quizzes?
grade 1
grade 2
grade 3
grade 4
grade 5
Source: Satisfaction survey, 125 participants, as of 31.03.2014
FINANCIAL ANALYSIS MOOC WITH MARC BERTONECHELIVE SESSION #5 WEDNESDAY APRIL 2ND 2014
Source: Satisfaction survey, 125 participants, as of 31.03.2014
Axis of improvement
No corrections for the weekly quizzes
16%
84%
Capitalise on your MOOC participation in your career?
No
Yes
FINANCIAL ANALYSIS MOOC WITH MARC BERTONECHELIVE SESSION #5 WEDNESDAY APRIL 2ND 2014
----------
Issued by First Finance, this certificate validates major knowledge in Corporate Finance
The CFF® is recognized by investment banks, masters in finance and MBAs
Special discount for MOOC participants!190$ for student,
390$ (790$) for professionals
More information about the CFF® :
www.first-finance-institute.org®
LIVE SESSION #5 WEDNESDAY APRIL 2ND 2014
FINANCIAL ANALYSIS MOOC WITH MARC BERTONECHE
Boston Medical Instruments (BMI) developed, manufactured and sold scientific medical instruments, needles and catheters which allowed rapid and less invasive access to a number of different organs and vessels.
BMI experienced extraordinary growth, fueled by heavy spending on research and development, necessary to maintain BMI’s competitive advantage and rapid expansion of its sales force.
BMI has reached the maximum level of debt (Short term debt) which the banker is ready to provide. What should the company do now?
Week 5 - Boston Medical Instruments
LIVE SESSION #5 WEDNESDAY APRIL 2ND 2014
FINANCIAL ANALYSIS MOOC WITH MARC BERTONECHE
Your essay should start by considering the level of business risk of Boston Medical Instruments (BMI) and the ability of this company to carry or not a high amount of financial debt.
It should analyze the growth of this company and its consequences on the investments (in fixed capital and in net working capital) and on the financing of BMI in the last three years and try to assess the future cash flows (cash flow from operations and free cash flow before financing) for the two next years (2014 and 2015).
It should comment on the level of BMI‘s margins and on its profitability (ROCE and ROE) and compare its self-sustainable-growth to its actual growth.
It should finally give some recommendations on how to solve the issues facing the management of the company at the beginning of 2014 by listing and discussing the various options available to the managers of BMI.
Boston Medical Instruments - Guidelines
LIVE SESSION #5 WEDNESDAY APRIL 2ND 2014
FINANCIAL ANALYSIS MOOC WITH MARC BERTONECHE
In thousands of Dollars 2011 2012 2013 Net sales 14 512 22 163 32 803 Cost of goods sold 6 632 10 232 15 223Gross margin 788 11 931 1 758
Selling general and administrative costs 433 6 621 1 006
Research and development 2 454 3 534 4 997
Operating Profit (EBIT) 1 096 1 776 2 523
Interest expense 351 617 988
Profit before tax 745 1 159 1 535 Income tax 253 394 522Net profit 492 765 1 013
Income Statement
LIVE SESSION #5 WEDNESDAY APRIL 2ND 2014
FINANCIAL ANALYSIS MOOC WITH MARC BERTONECHE
In thousands of Dollars 2011 2012 2013 Cash 1 243 1 523 1 250 Accounts receivables 2 798 4 225 6 232 Inventories 4 225 6 523 9 587Total Current Asset 8 266 12 271 17 069
Gross fixed assets 1 962 2 956 3 976 Depreciation -450 -598 -773
Net fixed assets 1 512 2 358 3 203
Total assets 9 778 14 629 20 272
Balance Sheet (Assets)
LIVE SESSION #5 WEDNESDAY APRIL 2ND 2014
FINANCIAL ANALYSIS MOOC WITH MARC BERTONECHE
In thousands of Dollars 2011 2012 2013 Short-term bank loan 2 987 6 674 10 769 Accounts payable 395 623 898 Accrued expenses 740 1 086 1 521 Current portion of long-term debt 175 175 175Total current liabilities 4 297 8 558 13 363
Long-term financial debt 125 1 075 900
Total liabilities 5 547 9 633 14 263
Equity 4 231 4 996 6 009
Total liabilities and equity 9 778 14 629 20 272
Balance Sheet (Liabilities & Equity)
LIVE SESSION #5 WEDNESDAY APRIL 2ND 2014
FINANCIAL ANALYSIS MOOC WITH MARC BERTONECHE
In thousands of Dollars 2012 2013
Net Profit 765 1013 Depreciation 148 175 ± Change in Not Working Capital -3 151 -4 361 Cash Flow from Operations -2 238 -3 173 - Capital Expenditures -994 -102 Cash Flow before Financing Activities -3 232 -4 193
- Long Term Debt Repayment -175 -175
+ Increase in Short Term Bank Loan 3 687 4 095
Total Cash Flow 280 -273
Cash Flow Statement
LIVE SESSION #5 WEDNESDAY APRIL 2ND 2014
FINANCIAL ANALYSIS MOOC WITH MARC BERTONECHE
Useful Formulas
Here is a list of formulas, ratios and financial figures with their relative week, that could be helpful to
answer to quiz Week 5
LIVE SESSION #5 WEDNESDAY APRIL 2ND 2014
FINANCIAL ANALYSIS MOOC WITH MARC BERTONECHE
Week 2
• NWC - NWC turnover ratio - NWC to Sales ratio [Video 1]
• Fixed Assets Turnover [Video 1]
• Capital Expenditure to Depreciation ratio [Video 1]
• DSO (Days of Sales Outstanding) [Video 3]
• DPO (Days of Payables Outstanding) [Video 3]
• DSI (Days Sales of Inventory) [Video 3]
• CCC (Cash Conversion Cycle) [Video 3]
LIVE SESSION #5 WEDNESDAY APRIL 2ND 2014
FINANCIAL ANALYSIS MOOC WITH MARC BERTONECHE
Week 3
• IGF (Internally Generated Funds) [Video 1]
• CFO (Cash Flow from Operations) [Video 1]
• Net Financial Debt [Video 2]
• Debt to Equity ratio - Debt coverage ratio [Video 4]
• Interest Coverage ratio [Video 4]
• Current ratio - Quick ratio [Video 4]
LIVE SESSION #5 WEDNESDAY APRIL 2ND 2014
FINANCIAL ANALYSIS MOOC WITH MARC BERTONECHE
Week 4
• Return on Capital Employed [Video 1]
• Return on Equity [Video 1]
• EVA (Economic Value Added) [Video 2]
• SSG (Self Sustainable rate of Growth) [Video 5]
LIVE SESSION #5 WEDNESDAY APRIL 2ND 2014
FINANCIAL ANALYSIS MOOC WITH MARC BERTONECHE
Forums Review
LIVE SESSION #5 WEDNESDAY APRIL 2ND 2014
FINANCIAL ANALYSIS MOOC WITH MARC BERTONECHE
Forum ReviewBoston Medical Instruments:
1) How to calculate the COCE ? And is it the same as the WACC ?
2) for the interest rate, I used 4% as interest rate, again maybe I'm wrong, I don't know but that’s how I interpreted it after reading the last paragraph of the case study.
3) With reference to the formula of ROCE and ROE, which is ROE = ROCE + (ROCE-i) x D/E , can anyone tell me if this equation holds to all types of earnings, including EBITDA, EBIT, EBT and Net Profit?
LIVE SESSION #5 WEDNESDAY APRIL 2ND 2014
FINANCIAL ANALYSIS MOOC WITH MARC BERTONECHE
Forum ReviewBoston Medical Instruments:
4) I am in process to consider the out year forecast and assume the Short Term Bank Loan (which is a credit line) would only be proportional to a percent of NWC. Does anyone have different approach?
5) Talking about interest rate, I must say I share your concerns and am rather confused
LIVE SESSION #5 WEDNESDAY APRIL 2ND 2014
FINANCIAL ANALYSIS MOOC WITH MARC BERTONECHE
QUESTIONS
LIVE SESSION #5 WEDNESDAY APRIL 2ND 2014
FINANCIAL ANALYSIS MOOC WITH MARC BERTONECHE
Forums Questions1) How can we calculate the "capital cost", link with the Interest
internal rate (IIR) ?
2) I understand business risk refers to the volatility of a company's earnings or operating cash flow. Is there a quantitative measure that reflects business risk?
3) Is trade credit or early invoice payment discount the quickest way to finance a firm in all times?
LIVE SESSION #5 WEDNESDAY APRIL 2ND 2014
FINANCIAL ANALYSIS MOOC WITH MARC BERTONECHE
CONCLUSION