A) BALANCE SHEET:
The Balance Sheet summarizes a company's assets, liabilities and shareholders' equity at a specific point in time. These three balance sheet segments give investors an idea as to what the company owns and owes, as well as the amount invested by the shareholders.
The balance sheet must follow the following formulas:
- Assets = Liabilities + Shareholders' Equity
- Capital employed = Financing
CAPITAL EMPLOYED MANAGEMENT:
1.- Non-current assets: At SMB-FINANCE we offer services related to planning, management and definition of accounting policies for non-current assets.
1.1.- Non-current Intangible assets management: Some through Balance Sheet, some through Balanced scorecard.
1.2.-Non-current Tangible assets management: At SMB-FINANCE we analize capital investments, assets turnover, calculate operating costs and provide local and corporate figures for local and corporate financial statements. This applies to period-end closing and current financial statements as well as for budgeting or forecasting purposes
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- Capital investments (CAPEX).
- Efficiency calculation.
- Assets replacement calculation.
- Assets cost controlling: Hourly rate by machine. --> Costing breakdown ---> Industrial controlling.
- Assets bookkeeping:Local and corporate figures for local and corporate financial statements.
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1.3.- Investment property: Land and buildings.
1.4.- Non-current investments in group companies and associates: Equity instruments, loans.
1.5.- Non-current investments: Equity instruments, loans, debt securities, financial derivaties (Forwards, futures, options, swaps, warrants).
2.- Current assets: Planning, management and definition of accounting current assets policies.
2.1.- Inventory management: It is essential to ensure efficiency and a correct flow of materials through the production process, plan annual purchases and short-term procurements in order to improve purchasing conditions, reduce the necessary days of stock and, therefore, reduce the needs of operating funds.
a). For control purposes on real figures: Analysis of stocks turnover, provisions for obsolescence. Recommendations on operational and commercial initiatives.
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- Inventory turnover analysis.
- Provisions for obsolescence.
- Control of associated costs.
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b). For budgeting purposes and forecasted figures: Material requirement Planning (MRP) Budget : Forecast of required flow of materials to achieve the production objectives. Based on sales forecast or Master Production Plan and through the Bill Of Materials (BOM), needs of materials for each period can be determined for budgeting (finance) and operating planning purposes ( purchases / procurement / logistics / production):
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- Procurement and purchase planning: according to supplier’s lead-times, internal production lead-times, internal flow of materials, work in progress and buffer stock.
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2.2.- Trande and other receivables: Credit and risk management.
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- Customer credit management in ABC analysis. Due and overdue analysis of receivables.
- Calculation of insolvency provisions.
- Financial costs calculation deriving from commercial credit and payment delays.
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2.3.- Current financial investments: Equity instruments, loans and other financial assets.
2.4 Cash-flow management: Cash flow analysis and cash flow rolling forecasts.
3.- Current trade liabilities: Trade accounts payable - ABC Analysis
4.- Net working capital: Current Net working capital vs Target Net working capital. Financial conditions negotiations with banks for NWC management purposes.
Examples of related balance sheet graphs:
- CAPEX / depreciation as a % of sales
- Depreciation-to-sales vs CAPEX-to-sales
- Net inventories - % of sales
- Trade receivables - % of sales
- Cash and cash equivalents
- Trade payables - % of sales
- Net working capital - % of sales
FINANCING MANAGEMENT:
1.- Equity:
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- Equity: Corporate & local figures
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2.- Debt, cash pooling & banking pool management: Banking negotiations. Financial structure optimization. Projected figures related to loans, overdrafts, credit lines, etc. for banking negotiations, budgets and rolling forecasts purposes.
2.1. Long-term debt. Structures analysis & forecast
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- Bonds, loans
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2.2. Short-term debt. Analysis & forecast:
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- Loans, overdrafts, commercial paper, bills of exchange, ...
- Payables and creditors management in ABC analysis.
- Cash Pooling
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Examples of related financial positions graphs:
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Long-term debt / equity
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Financial position / equity
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Financial position (variance)
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Net financial position / monthly cash flow
PROFIT AND LOSS:
Sales:
Sales statistics, Flash reports, Sales budgets
Price determination according to value chain
Products efficiency index and global efficiency index
Sales controlling:
Profitability Analysis (Green-Red Report): By customer - product, product - customer, etc
Credit & risk management (ABC analysis)
Operational expenses (OPEX):
OPEX: ABC analysis by account-supplier vs period. Warning systems on unusual expenditures.
Industrial controlling: Production orders analysis. Actual vs standard.
Purchase price index and price variance reports.