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Mail Manager Inc. - May 11, 2011

Posted by: Robert M. Glickman in Testimonials

I have the privilege of knowing Bob on both a personal and business level and I am always impressed by the depth of his knowledge and his understanding of all facets of business well beyond just the financials. He clearly has a command over the many moving parts of a successful company and he knows how to analyze the metrics and use them to the benefit of future growth. I highly recommend Bob for any company that requires a strong part time CFO with an excellent analytic sense a great personality and the ability to make the right decisions.

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Testimonials - Veev Spirits - Mar 24, 2011

Posted by: Robert M. Glickman in Testimonials

In April 2010, Bob joined VeeV as its part time CFO and immediately went to work addressing  the company’s most pressing issues.  He restated the prior year financial data and revamped our chart of accounts.  This resulted in a much simpler, meaningful and easy to understand set of financial statements.  He improved our inventory control and created an annual budget that is instrumental in comparing actual results and charting our company’s future growth.  Bob’s financial knowledge and ability to work independently makes him a critical member of the VeeV team and our growth to the next level wouldn’t have been possible without him.

Carter Reum
Founder, VeeV Spirits
www.veevlife.com

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Race Professional Shoe Manufacturer distributor - Mar 16, 2011

Posted by: Robert M. Glickman in Testimonials

I can highly recommend Bob Glickman as a consultant CFO.  Bob was able to quickly understand the nature of the footwear business with its unique combination of off shore, outsourced manufacturing, lead times and the resultant cash flow requirements.  He was responsive to all my questions and took the time to clearly explain how he was analyzing each component of our business within an accounting and finance framework.  His knowledge combined with his demeanor made working with Bob a pleasure.

Kevin A. Beard
CEO/ Founder
Piloti
http://www.piloti.com

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Performance Measurements - Feb 5, 2010

Posted by: Robert M. Glickman in Articles

Financial statements are created to give business owners and stakeholders insight into the financial condition of their business. Performance measurements and ratio analysis help us analyze financial statements and identify financial trends in the business.  Ratios also allow you to compare your company's current data to the company's historic financial performance, financial goals as well as other companies' results. They are typically expressed as a percentage, multiple, or a dollar amount.
 
Often dashboard reports include performance measurements and other key performance indicators, giving management a convenient snapshot of  critical business data and trends without having to dig through the financial statements.  Performance measurements and ratios analysis fall into four main categories:
Liquidity ratios- the company's ability to meet its financial obligations
Profitability ratios- ability to generate earnings as compared to   
   expenses and other costs
 Leverage ratios- measures the use of debt in financing the 
   company's operations and assets
 Efficiency ratios- operational measurements on the quality of assets, 
     liabilities, and cost control
 
It would be burdensome to review dozens of performance measurements on a monthly or quarterly basis. It is therefore important to decide which performance measurements are most meaningful to your particular business. It is critical that the ratios are calculated on a consistent basis and there is agreement among the business managers that the correct data is being used in performing the calculations.  Below is a sample of two ratios in each of the above categories. 
   
Liquidly ratios
Acid Test or Quick Ratio=(Current Assets - Inventory) /Current Liabilities
This is a measurement of the liquidity position of the business.  It measures a   
company's    ability to meet short term obligations in an emergency situation.   
Inventories are removed from current assets     since it is unlikely that inventory will be 
able to be sold for full value in a short amount of time.  A ratio of 1:1 is considered        
satisfactory unless a majority of your assets are in accounts receivable and the timing 
of their collections lag the timing of your payment of accounts payable.
 
Net Working Capital = Total Current Assets - Total Current Liabilities
This is more a measure of cash flow than a ratio.  The results of this calculation 
should be positive.  Bankers look at Net Working Capital over time to determine a 
company's ability to weather a financial crisis.  Loans are often tied to minimum 
working capital requirements.
       
 Profitability ratios
Return on Investment (ROI)  = Net Profit before tax / Equity   
          (note: some analyst include long term debt with equity for this calculation)
ROI calculates the percentage return from your business on the funds invested.  The result of this calculation can be compared to alternative risk free investment (i.e. CDs, bank savings account, Treasury Bills).  Business owners want to make sure they are receiving a sufficient premium over a risk free investments to justify the risks and effort they are making in operating their business.

Breakeven Sales=Total Operating Expense/ Avg. Gross Margin %
This is an important measurement that calculates the sales necessary to realize a breakeven bottom line.  The calculation reflects how a decision to add fixed costs or changes to the gross margin percent impacts the sales volume that yields zero profit.

Leverage Ratios
Capitalization Ratio=Long Term Debt / (Equity + Long Term Debt)
The Capitalization Ratio measures the percentage of the company's capital structure that is supported by debt versus owners' capital.  Generally, the higher this ratio, the more risky a creditor will perceive its exposure in your business, making it correspondingly harder to obtain credit.
 
Fixed Charge Coverage  = (Earnings before Interest & Taxes + Lease   
                       ....

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The Importance Of Your Bank Relationship - Jan 6, 2010

Posted by: Robert M. Glickman in Articles

The Importance of Your Bank Relationship 

Today, more than ever, a business owner must carefully choose the bank that best fits their business needs.  A bank should be more than a safe place to deposit your checks, maintain your excess cash, and help you pay your bills.  Your bank should simplify your cash management processes, give you access to capital, and be there for you when you need them.

 

Your Bank

We have all seen how the current recession has adversely impacted both large and small financial institutions.  Bauer Financial (bauerfinancial.com) offers a bank rating service that uses a 5 star index, measuring a bank's strength and stability.  The rating is based on the bank's capital ratio and other financial metrics (4 & 5 stars - recommended, 3 stars- adequate, 1 star- troubled).  There is no charge for the basic star rating and an addition fee for a more comprehensive report.  It is a good idea to review the rating of a new bank you are considering doing business with as well as periodically checking on your existing bank's rating.

 

If your bank is having financial difficulties, it is possible they will not be in a position to support your company when you need them the most.  A struggling bank may be more concerned about their financial future than yours.  They may be unwilling or unable to renew your credit line even if there has been no significant downturn in your business.  Additionally, a struggling bank may be acquired by a lender that doesn't like or understand your business. It is possible that the people you have a relationship with will be replaced by new bankers that don't know you or understand your business. These new bankers may not demonstrate the same loyalty to their customers as your old bankers.  

 

In evaluating a new bank, it is important to know the lending history of the institution.  Do they understand and seek out companies of your size and in your industry?   How quickly are decisions made at the bank?  Does the bank have a slow moving bureaucracy?  Do they have a reputation of terminating relationship unexpectedly due to internal  issues?
 

Your Business

It is obvious that a bank prefers a relationship with companies that have a positive, improving bottom line and a stable cash flow.  Additionally, banks value a business that produces accurate financial statements and has a well thought-out business plan.  Nothing shakes a....

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