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CFO (what is his job (anything related to money (legal stuff (Taxation…
CFO
what is his job
anything related to money
Finance
Finance
planning
(the second report you should submit)
meaning
1-5 years planning means the long term strategic planning
less than 1 year means short term financial budget, meaning basically the cash flow of your company
what should be included
prediction of margin (利润预测)
fixed cost (固定成本)
variable cost (可变成本)
balance sheet (资产负债表)
financial statement (财务报表/损益表)
Order of operation:
first, make the cash flow sheet
then it is the balance sheet
third is the financial statement
cash flow sheet (资金流量表)
usage
base for future things
a sighting for whether you are doing correct things
evaluating which project
the company should choose
Use the CBA, known as cost-benefit analysis
ECBA
this is a higher level of CBA
it considers basically all the impacts of your project
what do you have to include?
who are paying the cost?
who are getting the benefit?
who is going to be included / affected in this project?
in which way?
FCBA
This is the basic of CBA
only considering the fact about how to maximum your profit
you'll have to include the factor of:
opportunity cost
what if you do another thing compare with doing this project?
will doing another thing give you more money
especially compare with doing nothing (putting money into bank)
fixed cost
how much money would you need to get the project started?
especially targeting the machine and basic equipment
when the project started, this money would become sunk cost
if after doing this project, you realize that in the time period, because mis calculation or what ever, you cannot make "break even" if considering the fixed cost, you can still do the project
carrying cost
the money that would increase if you do more similar product
despite the fixed cost, if you cannot even cover the carrying cost in the "break even" stage, the project would need to be stopped immediately.
usage
Help to make decision
a compassion of which project is more worthy and why
all based on calculations
NPV
(Net present value)
time is money
value/(discount rate + 1)^time
the more the money in the future, the less you'll actually earn
legal stuff
Taxation
isn't related to our project
banking return
monthly
what should be included?
balance sheet (资产负债表)
financial statement (财务报表/损益表)
cash flow sheet (资金流动表)
check whether your company is healthy or not
ask whether you need to borrow money
Report to the CEO