financial analysis for trainee millionaires

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

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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 - PowerPoint PPT Presentation

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Page 1: Financial Analysis for Trainee Millionaires

Financial Analysis for Trainee Millionaires

Buzz Ventures

Ratio AnalysisTypes of Finance

Definitions:http://www.accountrain.com/definitions.html

Financial Statements from SEDARwww.sedar.com/issuers/company_issuers_a_en.htm

Page 2: Financial Analysis for Trainee Millionaires

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

Page 3: Financial Analysis for Trainee Millionaires

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

Page 4: Financial Analysis for Trainee Millionaires

Aastra Annual Balance Sheets 2011, 2010, 2009

All Figures $'000 2011 2010 2009

Current Assets $418,620 $424,852 $399,834

(Including Cash of) $129,933 $90,704 $113,596

Fixed Assets $148,905 $167,142 $190,834

Total Assets $567,525 $591,994 $590,668

Current Liabilities $195,787 $235,419 $220,717

Long Term Liabilities

$49,515 $40,000 $66,621

Total Liabilities $245,302 $275,419 $287,338

Equity $94,917 $94,653 $90,488

Retained Earnings $227,306 $221,922 $212,842

Total Equity $322,223 $316,575 $303,330

Page 5: Financial Analysis for Trainee Millionaires

Aastra Annual Income Statements

Income Statements 2011 2010

Sales $692,994 $716,936

Cost of sales $399,786 $405,926

Overhead Costs $368,807 $375,027

Operating Profit $30,979 $30,899

Corporate Taxes $4,807 $5,511

Profit for Distribution $26,172 $25,388

Page 6: Financial Analysis for Trainee Millionaires

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.

Page 7: Financial Analysis for Trainee Millionaires

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.

Page 8: Financial Analysis for Trainee Millionaires

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.

Page 9: Financial Analysis for Trainee Millionaires

Venture Capital

Expect 15 times return on investments ON AVERAGE.

Pressure to perform Will take majority shareholding (allows control) Ruthless

Page 10: Financial Analysis for Trainee Millionaires

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.

Page 11: Financial Analysis for Trainee Millionaires

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.