Transcript Advertising Agencies

Set up chart of accounts
CURRENT ASSETS
Cash & equivalents
Accounts receivable
Other current assets
Advances
Lease Deposits
Total current assets
PROPERTY & EQUIPMENT
Computer equipment
Office furniture
Less depreciation
OTHER ASSETS
Other asset A
Other asset B
TOTAL ASSETS
Current Liabilities
Bank line of credit
Accounts payable
Long Term Liabilities
Note Payable A
Note Payable B
TOTAL LIABILITIES
STOCKHOLDERS' EQUITY
Capital stock
Treasury stock
Additional Paid-in-Capital
Profit(loss)
Retained earnings
TOTAL LIABILITIES & EQUITY
Set up 12-month timeline
Begin
Balance
CURRENT ASSETS
Cash & equivalents
Accounts receivable
Other current assets
Advances
Lease Deposits
Total current assets
PROPERTY & EQUIPMENT
Computer equipment
Office furniture
Less depreciation
OTHER ASSETS
Other asset A
Other asset B
TOTAL ASSETS
Current Liabilities
Bank line of credit
Accounts payable
Long Term Liabilities
Note Payable A
Note Payable B
TOTAL LIABILITIES
STOCKHOLDERS' EQUITY
Capital stock
Treasury stock
Additional Paid-in-Capital
Profit(loss)
Retained earnings
TOTAL LIABILITIES & EQUITY
Jan
Feb
March
April
May
Fiscal 1999
June
July
August
Sept
Oct
Nov
Dec
Change
End
Balance
Input beginning balances
Begin
Balance
CURRENT ASSETS
Cash & equivalents
Accounts receivable
Other current assets
Advances
Lease Deposits
Total current assets
PROPERTY & EQUIPMENT
Computer equipment
Office furniture
Less depreciation
OTHER ASSETS
Other asset A
Other asset B
TOTAL ASSETS
Current Liabilities
Bank line of credit
Accounts payable
Long Term Liabilities
Note Payable A
Note Payable B
TOTAL LIABILITIES
STOCKHOLDERS' EQUITY
Capital stock
Treasury stock
Additional Paid-in-Capital
Profit(loss)
Retained earnings
TOTAL LIABILITIES & EQUITY
32,000
1,000
1,000
1,000
6,000
39,000
1,000
1,000
1,000
7,000
1,000
1,000
2,000
50,000
1,000
1,000
14,000
1,000
1,000
6,000
20,000
1,000
-1,000
1,000
28,000
1,000
30,000
50,000
Jan
Feb
March
April
May
Fiscal 1999
June
July
August
Sept
Oct
Nov
Dec
Change
End
Balance
Input change for the month
Begin
Balance
CURRENT ASSETS
Cash & equivalents
Accounts receivable
Other current assets
Advances
Lease Deposits
Total current assets
PROPERTY & EQUIPMENT
Computer equipment
Office furniture
Less depreciation
OTHER ASSETS
Other asset A
Other asset B
TOTAL ASSETS
Current Liabilities
Bank line of credit
Accounts payable
Long Term Liabilities
Note Payable A
Note Payable B
TOTAL LIABILITIES
STOCKHOLDERS' EQUITY
Capital stock
Treasury stock
Additional Paid-in-Capital
Profit(loss)
Retained earnings
TOTAL LIABILITIES & EQUITY
Jan
32,000
31,000
1,000
1,000
1,000
1,000
6,000
1,000
1,000
6,000
39,000
38,000
1,000
1,000
1,000
7,000
1,000
1,000
-1,000
7,000
1,000
1,000
2,000
1,000
1,000
2,000
50,000
49,990
1,000
1,000
14,000
1,000
1,000
14,000
1,000
1,000
6,000
1,000
1,000
6,000
20,000
20,000
1,000
-1,000
1,000
28,000
1,000
30,000
1,000
-1,000
1,000
28,990
0
29,990
50,000
49,990
Feb
March
April
May
Fiscal 1999
June
July
August
Sept
Oct
Nov
Dec
Change
End
Balance
Input changes for all 12 months
Begin
Balance
CURRENT ASSETS
Cash & equivalents
Accounts receivable
Other current assets
Advances
Lease Deposits
Total current assets
PROPERTY & EQUIPMENT
Computer equipment
Office furniture
Less depreciation
OTHER ASSETS
Other asset A
Other asset B
TOTAL ASSETS
Current Liabilities
Bank line of credit
Accounts payable
Long Term Liabilities
Note Payable A
Note Payable B
TOTAL LIABILITIES
STOCKHOLDERS' EQUITY
Capital stock
Treasury stock
Additional Paid-in-Capital
Profit(loss)
Retained earnings
TOTAL LIABILITIES & EQUITY
March
April
May
Fiscal 1999
June
July
Jan
Feb
August
32,000
31,000
31,000
31,000
31,000
31,000
31,000
31,000
31,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
39,000
38,000
38,000
38,000
38,000
38,000
1,000
1,000
1,000
7,000
1,000
1,000
-1,000
7,000
1,000
1,000
-1,000
7,000
1,000
1,000
-1,000
7,000
1,000
1,000
-1,000
7,000
1,000
1,000
2,000
1,000
1,000
2,000
1,000
1,000
2,000
1,000
1,000
2,000
50,000
49,990
49,990
1,000
1,000
14,000
1,000
1,000
14,000
1,000
1,000
6,000
Sept
Oct
Nov
Dec
31,000
31,000
31,000
31,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
38,000
38,000
38,000
38,000
38,000
38,000
38,000
1,000
1,000
-1,000
7,000
1,000
1,000
-1,000
7,000
1,000
1,000
-1,000
7,000
1,000
1,000
-1,000
7,000
1,000
1,000
-1,000
7,000
1,000
1,000
-1,000
7,000
1,000
1,000
-1,000
7,000
1,000
1,000
-1,000
7,000
1,000
1,000
2,000
1,000
1,000
2,000
1,000
1,000
2,000
1,000
1,000
2,000
1,000
1,000
2,000
1,000
1,000
2,000
1,000
1,000
2,000
1,000
1,000
2,000
1,000
1,000
2,000
49,990
49,990
49,990
49,990
49,990
49,990
49,990
49,990
49,990
49,990
1,000
1,000
14,000
1,000
1,000
14,000
1,000
1,000
14,000
1,000
1,000
14,000
1,000
1,000
14,000
1,000
1,000
14,000
1,000
1,000
14,000
1,000
1,000
14,000
1,000
1,000
14,000
1,000
1,000
14,000
1,000
1,000
14,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
1,000
-1,000
1,000
28,000
1,000
30,000
1,000
-1,000
1,000
28,990
0
29,990
1,000
-1,000
1,000
28,990
0
29,990
1,000
-1,000
1,000
28,990
0
29,990
1,000
-1,000
1,000
28,990
0
29,990
1,000
-1,000
1,000
28,990
0
29,990
1,000
-1,000
1,000
28,990
0
29,990
1,000
-1,000
1,000
28,990
0
29,990
1,000
-1,000
1,000
28,990
0
29,990
1,000
-1,000
1,000
28,990
0
29,990
1,000
-1,000
1,000
28,990
0
29,990
1,000
-1,000
1,000
28,990
0
29,990
1,000
-1,000
1,000
28,990
0
29,990
50,000
49,990
49,990
49,990
49,990
49,990
49,990
49,990
49,990
49,990
49,990
49,990
49,990
Change
End
Balance
Total the change for the year
Begin
Balance
CURRENT ASSETS
Cash & equivalents
Accounts receivable
Other current assets
Advances
Lease Deposits
Total current assets
PROPERTY & EQUIPMENT
Computer equipment
Of f ice f urniture
Less depreciation
OTHER ASSETS
Other asset A
Other asset B
TOTAL ASSETS
Current Liabilities
Bank line of credit
Accounts payable
Long Term Liabilities
Note Payable A
Note Payable B
TOTAL LIABILITIES
STOCKHOLDERS' EQUITY
Capital stock
Treasury stock
Additional Paid-in-Capital
Prof it(loss)
Retained earnings
TOTAL LIABILITIES & EQUITY
March
April
May
Fiscal 1999
June
July
Jan
Feb
August
32,000
31,000
31,000
31,000
31,000
31,000
31,000
31,000
31,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
39,000
38,000
38,000
38,000
38,000
38,000
1,000
1,000
1,000
7,000
1,000
1,000
-1,000
7,000
1,000
1,000
-1,000
7,000
1,000
1,000
-1,000
7,000
1,000
1,000
-1,000
7,000
1,000
1,000
2,000
1,000
1,000
2,000
1,000
1,000
2,000
1,000
1,000
2,000
50,000
49,990
49,990
1,000
1,000
14,000
1,000
1,000
14,000
1,000
1,000
6,000
Sept
Oct
Nov
Dec
Change
31,000
31,000
31,000
31,000
372,000
1,000
1,000
1,000
1,000
1,000
12,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
12,000
12,000
72,000
38,000
38,000
38,000
38,000
38,000
38,000
38,000
456,000
1,000
1,000
-1,000
7,000
1,000
1,000
-1,000
7,000
1,000
1,000
-1,000
7,000
1,000
1,000
-1,000
7,000
1,000
1,000
-1,000
7,000
1,000
1,000
-1,000
7,000
1,000
1,000
-1,000
7,000
1,000
1,000
-1,000
7,000
12,000
12,000
12,000
84,000
1,000
1,000
2,000
1,000
1,000
2,000
1,000
1,000
2,000
1,000
1,000
2,000
1,000
1,000
2,000
1,000
1,000
2,000
1,000
1,000
2,000
1,000
1,000
2,000
1,000
1,000
2,000
12,000
12,000
24,000
49,990
49,990
49,990
49,990
49,990
49,990
49,990
49,990
49,990
49,990
599,880
1,000
1,000
14,000
1,000
1,000
14,000
1,000
1,000
14,000
1,000
1,000
14,000
1,000
1,000
14,000
1,000
1,000
14,000
1,000
1,000
14,000
1,000
1,000
14,000
1,000
1,000
14,000
1,000
1,000
14,000
1,000
1,000
14,000
12,000
12,000
168,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
12,000
12,000
72,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
240,000
1,000
-1,000
1,000
28,000
1,000
30,000
1,000
-1,000
1,000
28,990
0
29,990
1,000
-1,000
1,000
28,990
0
29,990
1,000
-1,000
1,000
28,990
0
29,990
1,000
-1,000
1,000
28,990
0
29,990
1,000
-1,000
1,000
28,990
0
29,990
1,000
-1,000
1,000
28,990
0
29,990
1,000
-1,000
1,000
28,990
0
29,990
1,000
-1,000
1,000
28,990
0
29,990
1,000
-1,000
1,000
28,990
0
29,990
1,000
-1,000
1,000
28,990
0
29,990
1,000
-1,000
1,000
28,990
0
29,990
1,000
-1,000
1,000
28,990
0
29,990
12,000
-12,000
12,000
347,880
0
359,880
50,000
49,990
49,990
49,990
49,990
49,990
49,990
49,990
49,990
49,990
49,990
49,990
49,990
599,880
End
Balance
Set up the ending balance
Begin
Balance
CURRENT ASSETS
Cash & equivalents
Accounts receivable
Other current assets
Advances
Lease Deposits
Total current assets
PROPERTY & EQUIPMENT
Computer equipment
Office furniture
Less depreciation
OTHER ASSETS
Other asset A
Other asset B
TOTAL ASSETS
Current Liabilities
Bank line of credit
Accounts payable
Long Term Liabilities
Note Payable A
Note Payable B
TOTAL LIABILITIES
STOCKHOLDERS' EQUITY
Capital stock
Treasury stock
Additional Paid-in-Capital
Profit(loss)
Retained earnings
TOTAL LIABILITIES & EQUITY
March
April
May
Fiscal 1999
June
July
Jan
Feb
August
32,000
31,000
31,000
31,000
31,000
31,000
31,000
31,000
31,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
39,000
38,000
38,000
38,000
38,000
38,000
1,000
1,000
1,000
7,000
1,000
1,000
-1,000
7,000
1,000
1,000
-1,000
7,000
1,000
1,000
-1,000
7,000
1,000
1,000
-1,000
7,000
1,000
1,000
2,000
1,000
1,000
2,000
1,000
1,000
2,000
1,000
1,000
2,000
50,000
49,990
49,990
1,000
1,000
14,000
1,000
1,000
14,000
1,000
1,000
6,000
Sept
Change
End
Balance
Oct
Nov
Dec
31,000
31,000
31,000
31,000
372,000
404,000
1,000
1,000
1,000
1,000
1,000
12,000
13,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
12,000
12,000
72,000
13,000
13,000
78,000
38,000
38,000
38,000
38,000
38,000
38,000
38,000
456,000
495,000
1,000
1,000
-1,000
7,000
1,000
1,000
-1,000
7,000
1,000
1,000
-1,000
7,000
1,000
1,000
-1,000
7,000
1,000
1,000
-1,000
7,000
1,000
1,000
-1,000
7,000
1,000
1,000
-1,000
7,000
1,000
1,000
-1,000
7,000
12,000
12,000
12,000
84,000
13,000
13,000
13,000
91,000
1,000
1,000
2,000
1,000
1,000
2,000
1,000
1,000
2,000
1,000
1,000
2,000
1,000
1,000
2,000
1,000
1,000
2,000
1,000
1,000
2,000
1,000
1,000
2,000
1,000
1,000
2,000
12,000
12,000
24,000
13,000
13,000
26,000
49,990
49,990
49,990
49,990
49,990
49,990
49,990
49,990
49,990
49,990
599,880
649,880
1,000
1,000
14,000
1,000
1,000
14,000
1,000
1,000
14,000
1,000
1,000
14,000
1,000
1,000
14,000
1,000
1,000
14,000
1,000
1,000
14,000
1,000
1,000
14,000
1,000
1,000
14,000
1,000
1,000
14,000
1,000
1,000
14,000
12,000
12,000
168,000
13,000
13,000
182,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
1,000
1,000
6,000
12,000
12,000
72,000
13,000
13,000
78,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
240,000
260,000
1,000
-1,000
1,000
28,000
1,000
30,000
1,000
-1,000
1,000
28,990
0
29,990
1,000
-1,000
1,000
28,990
0
29,990
1,000
-1,000
1,000
28,990
0
29,990
1,000
-1,000
1,000
28,990
0
29,990
1,000
-1,000
1,000
28,990
0
29,990
1,000
-1,000
1,000
28,990
0
29,990
1,000
-1,000
1,000
28,990
0
29,990
1,000
-1,000
1,000
28,990
0
29,990
1,000
-1,000
1,000
28,990
0
29,990
1,000
-1,000
1,000
28,990
0
29,990
1,000
-1,000
1,000
28,990
0
29,990
1,000
-1,000
1,000
28,990
0
29,990
12,000
-12,000
12,000
347,880
0
359,880
13,000
-13,000
13,000
376,880
389,880
50,000
49,990
49,990
49,990
49,990
49,990
49,990
49,990
49,990
49,990
49,990
49,990
49,990
599,880
649,880
Build the Income Statement
Balance Sheet
Income Statement
Integrate the statements
Depreciation/amortization
Others Linkages:
Stockholders’ Equity
•Interest income
•Interest expense
•Deferred tax
•Bonus
•Work-in-progress
Net Earnings (Loss)
Integrate cash flow “plug”
Cash
Total Assets
Balance Sheet
Total Liabilities
Equity
Income Statement
Profit (Loss)
Cash Flow
Circular Reference
Cash Flow Equation
+ Net Earnings (Loss)
- Change in Total Assets
+ Change in Cash
+ Change in Total Liabilities
+ Change in Equity: stock & retained earnings
Extend timeline back & forward
Last Year
Current Year
Next Year
Balance Sheet
Balance Sheet
Balance Sheet
Income Statement
Income Statement
Income Statement
Cash Flow
Cash Flow
Cash Flow
Input actuals up to current month
Last Year
Input actuals
Input actuals
Current Year
Next Year
Input actuals for month closed
Last Year
Input actuals
Input actuals
Current Year
Next Year
Project ahead
Last Year
Current Year
Next Year
Project ahead
Set up charts
Last Year
Current Year
Next Year
Setup Instrument Panel
Monthly Gross & Net Revenues (6- mma)
173-179% markup;
60 % billable
$800,000
$600,000
0.8
0.2
A na lys is - Co mbinatio n o f lo w billable (59%) and marklup (169%) y-t-d.
A c t io n - B o th trends can be turned aro und with tighter pro ject management.
Employees
8.8 % o f net revenues
0.05
0
A na lys is - Declingin billable % mo ves mo re wages into o verhead
A c t io n - Set bilable targets fo r '99 and fo llo w-thro ugh with acco untability.
A na lys is - Dro pping billable and markup.
A c t io n - Rebuild billable / markup to 64% / 179% by 12/31/99.
Non- billable Wages, % Net Revenues (12- mma)
A vg. 2% COLA
+ 2.5% merit
80
0.2
0.1
-5.3 % annualized
gro wth rate
0
$0
EBITDABonus, % Net Rev.'s (12- mma)
0.15
0.4
9.9 % annualized
gro wth rate
$200,000
Drive do wn by
increasing billable
% and markup.
0.25
EBITBonus, % Net Revenues (12- mma)
5.2 % o f net revenues
0.15
0.2
60
20
Includes interest,
but no t taxes.
0.6
$400,000
40
Non- Billable Expenses, % Net Rev.'s (12- mma)
0.1
0.15
0.1
3.7 % annualized
gro wth rate
-12.3 % annualized
gro wth rate
0.05
0.05
0
0
A na lys is - So me turno ver in fall mo nths in bo th billable and o verhead ranks.
A c t io n - Do n't replace until acquisitio n situatio n stabilizes.
0
A na lys is - Same as abo ve
A c t io n - M ake do with current administrative staff structure.
Total Assets
Indirect Costs, % Net Revenues (12- mma)
2.8 % annualized
gro wth rate
$4,000,000
0.2
$3,000,000
0.15
$2,000,000
0.1
$1,000,000
0.05
$0
0
A na lys is - M o stly invested in co mputer hardware and so ftware.
A c t io n - No significant investments planned at this time.
Taxes, bo nus, and
pensio n co ntributio ns
0.04
0.02
$0
A na lys is - Stable, but almo st no gro wth.
A c t io n - Significant increase wo uld require capital infusio n, prefereably equity.
0.15
B o nus 4 % o f payro ll
0.1
7.6 % annualized
gro wth rate
0.05
0
0.06
$1,000,000
1.7 % annualized
gro wth rate
EBIT, % Net Revenues (12- mma)
A na lys is - Current 12-mma is 3.7 % o f net revenues; year-end pro jected 3.7 %.
A c t io n - Same as abo ve.
Marketing Expenses, % Net Rev.'s (12- mma)
$1,500,000
$500,000
B o nus 4% o f payro ll
P ensio n 5% o f payro ll
A na lys is - Creeping co sts levels in 401(k) and majo r medical co sts.
A c t io n - M aintian current 401(k) match; make sure majo r medical is co mpetitive.
Working Capital
$2,000,000
A na lys is - Current 5.2 % 12-mma pro jected to be 5.5 % by year-end.
A c t io n - Same as abo ve
Net Earnings, % Net Revenues (12- mma)
0.1
Year-end tax + bo nus &
pensio n co ntributio ns.
0.05
0
0
Travel
Meetings
Promotion
A na lys is - Creeping travel and co nference co sts.
A c t io n - Co ntro l TRB ; limit co nferences; watch intl.; set po licies o n papers.
-0.05
1.2% o f Net Revenues
includes $ 70,000
bo nus distributio n
A na lys is - $ 56,861 returned to equity is 7.7% gro wth in bo o k value.
A c t io n - Same as abo ve.