SPHERICAL 360 KNOW YOUR BUSINESS
SPHERICAL 360 KNOW YOUR BUSINESS
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INTRODUCTION Do you KNOW your BUSINESS? The UBT Spherical 360 Program was designed to promote a consistent level and standard set of reporting in all fundamental areas of your business. Our 2 year subscription program has been designed with the flexibility and adaptability required to upgrade businesses of all kinds and sizes to the next level of efficiency and productivity. Our mission is to teach your business how to report, how to be reportable to someone, and provide a means to give business owners feedback on their submitted data. This program was initially mentioned at the Westfield Seminar in 2014.
“Create some fresh initiatives that businesses are prepared to support, and that will add to their revenue and their profitability.” “We guarantee the fact that if you do these particular things in your business, we guarantee that it does produce results. And that is where I think this follow-up and reporting is so critical” “Spherical simply means it’s a sphere. Everybody knows what a sphere is, you look at those maps of the world on the globe, that’s a sphere. And it means you have a 360 degree view within the sphere at every point. So it’s not just horizontal, it’s a complete horizontal, vertical appraisal of what is going on within that sphere. That’s what I would call a spherical approach, and a spherical outlook.” We hope you will join the journey with us. This program promises to reach the core of your business and uncover the potential. Read on to find out more...
Copyright © Universal Business Team 2015
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COMPARISON CHART
UBT Financial Health Check & Report Monthly Tracking of Key Financial Data Quarterly UBT Financial Health Check Update Report
SPHERICAL 360 REPORT LEVEL 1
SPHERICAL 360 COACH LEVEL 2
SPHERICAL 360 CONSULT LEVEL 3
• • •
• • •
• • •
•
•
Quarterly 3hr Meeting with UBT Approved Business Coach. (1st FTF, Balance GTM) 5hr ‘Deep Dive’ Consulting Workshop On-site Including KPI Setup for Monitoring
•
Weekly KPI Monitoring & Scoreboard Reporting
•
Copyright © Universal Business Team 2015
SPHERICAL 360 KNOW YOUR BUSINESS
4
SPHERICAL REPORT Accountability Have you looked at your company budget recently? Do you possess a complete grasp of the financial status of your business? How can you be 100% sure your finances are on the right track? Your financial information has the power to reveal a lot about your business. You may have a fair idea of how your finances are shaping up – but how about a second opinion? A Financial Health Check is essential for maintaining the stability of your business, keeping track of the ongoing success of your business, and providing you the peace of mind you need in knowing your business is in good health – or if it’s in desperate need of a financial bypass. Receive a monthly report that shows how you are tracking – it is empowering.
Copyright © Universal Business Team 2015
This Spherical Report includes: •
UBT Financial Health Check & Report - Our financial health check report monitors and analyzes fundamental areas of your business, identifies possible pain points, and highlights potential avenues for improvement. This also includes expert advice and insights from a UBT accountant.
•
Monthly Tracking of Key Financial Data – Our Spherical 360 team will provide you with a comprehensive, one-page monthly tracking report focusing on sales as well as other essential factors.
•
Quarterly UBT Financial Health Check Update and Report – You will receive an update on your FHC every financial quarter.
UBTA Financial Overview
UBTA Financial Overview
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UBTA Financial Overview
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OVERHEAD EXPENSES & OTHER INCOME
PROFIT & LOSS
ACCOUNTANT'S INSIGHTS
Prepared by UBT Business Advisory
Prepared by UBT Business Advisory
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Prepared by UBT Business Advisory
1
If we start with the Liquidity Ratios the improvement is obvious to the point where by the end of this last year the Current & Quick Ratios are both above the minimum guidelines as shown to the right hand side. Two of the main related fundamentals that effect these ratios, the Stock Turnover and Debtor Days have both been good right through which indicates that these aspects of the operation are well managed and have contributed to the recovery of the liquidity.
12 months
12 months
12 months
12 months
06/2014
06/2013
06/2012
06/2011
Sales
7,521,554
5,876,214
4,911,737
4,271,076
TOTAL REVENUE $
7,521,554
5,876,214
4,911,737
4,271,076
12 months
06/2014
REVENUE
Opening Stock
The liquidity had been under pressure from the classical reason of significant growth and the higher level of labour and other costs since the expansion of the business was set on. Improved cashflow from increasing margins and GP dollars, along with retention of profits, have all contributed to the turnaround.
Purchases Less: Opening Stock TOTAL COST OF SALES $
3
479,317
457,685
346,389
481,841
3,810,946
2,977,212
2,538,856
2,158,280
-596,250
-479,317
-457,685
-346,389
3,694,013
2,955,580
2,427,560
5
164,750 164,750
163,520 163,520
143,520 143,520
Warehousing Costs
170,250
160,800
168,052
168,052
Freight & Cartage
249,915
194,856
173,200
108,191
Packing Supplies Repairs & Maintenance Depreciation - Plant & Equipment (adjusted from Overheads)
17,503
16,220
15,870
14,650
451,293
356,376
326,100
259,300
13,256
18,516
18,700
13,505
49,894
44,355
37,011
37,915
Freight & Cartage (adjusted from Overheads)
8,510
7,200
6,850
6,253
Hire of Plant & Equipment
3,560
2,980
3,650
3,059
(adjusted from Overheads)
Waste Disposal (adjusted from Overheads) TOTAL DIRECT EXPENSES $
8,250 972,431
10,730 812,033
5,995 755,428
5,450 616,375
TOTAL COST OF GOODS SOLD $
4,847,669
3,932,363
3,346,508
3,053,627
GROSS PROFIT $
2,673,885
1,943,851
1,565,229
1,217,449
36%
33%
32%
29%
John Smith
150,000
120,000
70,000
40,000
Sally Smith
150,000
120,000
70,000
40,000
Sam Smith TOTAL OWNERS REMUNERATION ALLOWANCE $ Total Other Income Total Overheads Show
Show
Owners Remuneration Allowance NET PROFIT $
Show
RATIOS REPORT
150,000 450,000
120,000 360,000
70,000 210,000
19,500
25,250
30,115
23,450
19,365
16,500
500
400
250
116
89,250
113,750
84,300
96,433
4,050
9,400
10,200
Borrowing Costs
19,500
25,250
30,115
1,413,744
1,366,875
1,322,403
8%
360,000 210,000 120,000 189,607 UBTA Financial 13,604 Overview -194,839 3%
29,500
9,815
400
400
500
452
Building Costs
27,810
24,860
21,290
23,924
Consultancy Fees
18,950
Insurance Motor Vehicle Charges
6,015
8,170
7,270
52,150
54,271
87,200
103,627
48,500
Registration Fees
7,250
9,984 53,500
22,305
Rates & Taxes
7,100
4,991 47,560 81,250
Printing & Stationery
89,382 30,784 45,200
27,300 41,020
23,555 40,308
3,100
2,400
2,100
1,192
152,000
142,600
139,600
135,600
Repairs & Maintenance
13,500
12,000
15,600
14,819
Research & Development
18,950
19,600
23,600
17,099
7,250
6,080
6,750
Rent
Security Staff Amenities
16,520
Staff Training & Welfare
13,500
Subscriptions
15,587 9,600
13,600 18,300
6,544 13,405 18,132
4,950
2,360
1,750
1,405
Superannuation Contributions
67,876
51,856
48,213
34,971
Telephone
51,500
49,205
47,800
50,459
Travelling Expenses
67,800
56,950
58,620
52,605
Uniforms
7,800
Depreciation Loss On Sale (adjusted from other income)
8,100
8,260
3,136
40,477
37,588
52,090
62,031
834,239
818,051
9,181 801,594
806,684
Wages
754,180
576,180
535,780
487,013
TOTAL OVERHEAD WAGES $
754,180
576,180
535,780
487,013
15,576 15,576
19,513 19,513
29,501 29,501
28,706 28,706
1,603,995
1,413,744
1,366,875
1,322,403
SUBTOTAL OVERHEAD EXPENSES $ OVERHEAD WAGES
40,000 120,000
0 1,603,995 450,000 619,890
NET PROFIT %
Prepared by UBT Business Advisory Page 10 of 11 | UBTA Financial Overview
0
Hire Purchase Charges
GROSS PROFIT MARGIN
Show
30,115
TOTAL OTHER INCOME $
Advertising
OWNERS REMUNERATION ALLOWANCE
UBTA Financial Overview
25,250
Administration
2,293,732
181,225 181,225
Light & Power
The comment in the Vision page regarding capital needed for the rapidly increasing sales is noted. An important and essential step would be to obtain a Strategic Forward Plan tool from UBT in which the last years data is input along with two levels of sales growth. The tool then calculates the funds needed from external sources to fund the growth. This means there doesn't need to be any angst or issues but the growth can be managed according to available resources. This is a step management needs to undertake shortly.
06/2011
19,500
Bank Charges
Direct Wages TOTAL WAGES - DIRECT EXPENSES $
Debt to Equity and ROI ratios have both also come within acceptable guidelines in the last period which is a great outcome from the growth undertaken. It is of interest to note that NP at 7% would produce an ROI of 60% with the ROI being ideal while the NP to Sales is only at 7% when 10 to 20 is often quoted. This is an example of how one benchmark can often not be taken on it's own.
06/2012
0
Accountancy
DIRECT EXPENSES
4
12 months
06/2013
Other Income
OVERHEAD EXPENSES (excluding overhead wages & interest)
WAGES - DIRECT EXPENSES
Labour Productivity has improved but while it is showing below acceptable levels, part of this is because a third of the Shareholder salaries are for the Operations manager. However further drilldown as to these wages costs is appropriate to review the classification between Direct and Overhead and the level of Overhead wages and whether efficiencies could be made without affecting the overall operating model and the bottom line.
12 months
OTHER INCOME
COST OF SALES
2
12 months
INTEREST Show
Show
Interest Show TOTAL INTEREST $
Show
RATIOS REPORT
0%by UBT Business -5%Advisory Prepared
TOTAL OVERHEAD EXPENSES $
© Universal Business Team Ltd 2015
Page 3 of 11 | UBTA Financial Overview
Critical Ratios Ratio
Targets
06/2014
06/2013
06/2012
06/2011
Low
High
Net profit rate (%)
8%
3%
0%
-5%
10%
20%
Overheads to sales
21%
24%
28%
31%
20%
30%
Sustainable Business Ratio
61%
76%
91%
111%
50%
75%
Liquid Ratio (:1) (Quick Ratio)
1.2
0.8
0.5
0.6
1
1.5
Gross Profit to Wages Multiple
0.3
0.3
0.3
0.4
3
4
2.3
3
Altman Z Score
5.9
4.8
3.4
Comments
9
12
12
12
12
12 months
12 months
12 months
12 months
Profitability Ratios
06/2014
06/2013
06/2012
06/2011
Low
High
Calculation
Gross Profit rate (%)
36%
33%
32%
29%
30%
45%
Gross profit / Sales
Net profit rate (%)
8%
Return on equity before tax (%)
3%
146%
80%
© Universal Business Team Ltd 2015
TARGETS
0%
-5%
10%
20%
Net profit / Sales
6%
N/A
25%
35%
(Net profit - Tax) / Opening Equity
Gross Profit to Wages Multiple
0.3
0.3
0.3
0.4
3
4
Overheads to sales
21%
24%
28%
31%
20%
30%
Overhead costs / Sales
Operating Self-sufficiency
1.2
1.1
1.0
1.0
0.5
1.1
Sales / Total Expenses
Overhead wages / Gross Profit
50%
75%
Other overhead expenses / Wages + Owners remuneration
06/2014
06/2013
06/2012
06/2011
Low
High
Calculation
Current ratio (:1) (Working Capital Ratio)
2.1
1.6
1.2
1.1
1.2
2.0
Current assets / current liabilities
Liquid Ratio (:1) (Quick Ratio)
1.2
0.8
0.5
1.5
(Current assets - Stock)/Current liabilities
Stock to working capital
0.8
1.3
4.2
Sustainable Business Ratio
61%
76% 365
Liquidity Ratios
91% 365
111% 365
366
0.6
3.0
Stock / Working capital
25
45
Average creditors / Sales x days in period
5.9
4.8
3.4
2.3
3.0
9.0
Refer to Altman Z Table
Leverage Ratios
06/2014
06/2013
06/2012
06/2011
Low
High
Total Debt to Equity Ratio
237%
221%
475%
546%
80%
120%
Operating cash flow to total debt (%)
71%
24%
6%
-11%
Creditor days
25.30
Interest Coverage
31.89
36.42
7.8
1.0
N/A
Altman Z Score
1.0
30%
50%
Calculation
27
7
-4
3
4
18%
24%
14%
13%
45%
55%
Activity Ratios
06/2014
06/2013
06/2012
06/2011
Low
High
28%
20%
15%
N/A
5%
20%
23
21
23
N/A
35
55
Average debtors/Sales x Days in period
Debtor Days (days)
43
44
N/A
75
90
Average Stock/(COGS+Direct expenses) x Days in period
33
31
N/A
65
120
Debtor days + Stock days - Creditor days
Trading Ratio
11
16
45
96
7
12
Sales/Working capital
Break-even
06/2014
06/2013
06/2012
06/2011
Survival Break-even Sales
4,511,987
4,273,714
4,289,296
4,639,277
Overheads + Loan repayments / Gross Profit %
Incentive Break-even sales (150%)
6,767,981
6,410,570
6,433,944
6,958,916
Survival Break-even * 1.5
11
740,121 425,325
937,093
1,124,445
1,165,446
479,317 384,731
108,350 457,685 291,213
44,431 346,389 338,863
479,674
547,174
432,989
15,959
(122,848)
(136,452)
436,521
552,971
729,457
424,101
06/2013
236,507
06/2012
213,640
4,911,737
4,271,076
3,932,363
3,346,508
3,053,627
164,750
163,520
143,520
1,943,851
1,565,229
1,217,449
360,000
210,000
120,000
189,607
13,604
06/2012
1,413,744
1,366,875
576,180
535,780
37,588
52,090
19,513
29,501
06/2013 1,100,930 530,107 -
06/2012 909,300 198,354 -
Adjustment Notes
06/2011
5,876,214
06/2013
© Universal Business Team Ltd 2015
Adjustment Notes
784,552 438,163 1,699,428
374,354
Targets
06/2011
687,924 436,521
(194,839)
Adjustment Notes
06/2011 1,322,403 487,013 62,031 28,706
Adjustment Notes
06/2011 750,533 (104,954) -
Altman-Z Score Calculation - Manufacturer Formula Working Capital / Total Assets Retained Earnings / Total Assets EBIT / Total Assets True Equity / Total Liabilities Sales / Total Assets Altman Z Value
06/2014 0.4 0.3 1.6 0.3 3.4 5.9
06/2013 0.3 0.0 1.0 0.3 3.3 4.8
06/2012 0.1 -0.1 0.4 0.1 2.9 3.4
06/2011 0.0 -0.1 -0.2 0.1 2.5 2.3
Factor 1.2 1.4 3.3 0.6 1
Score Formula Result * Factor Formula Result * Factor Formula Result * Factor Formula Result * Factor Formula Result * Factor
Calculation
40
10
796,274 338,589 1,678,646
EBIT/Interest expense
38
9
Page 4 of 11 | UBTA Financial Overview
06/2012
600,817 336,276
Current period sales - previous period sales / Previous period sales
Working Capital Days
2
975,171 495,854 1,777,847
Closing equity/(Current assets + Non current assets)
Stock Turnover (days)
12
06/2013
(Current liabilities + Non current liabilities) / Closing equity (Net Profit + Depreciation)/(Current liabilities + Non current liabilities)
69
Equity Ratio (%)
Sales Growth (%)
Critical Ratios Balance Sheet Ratio Drivers 06/2014 1,378,397 CURRENT ASSETS - $ 782,147 CURRENT ASSETS - $ (Less Stock) 2,215,373 TOTAL ASSETS - $ 668,177 CURRENT LIABILITIES - $ 257,221 NON-CURRENT LIABILITIES - $ 925,398 TOTAL LIABILITIES - $ 710,220 WORKING CAPITAL - $ 596,250 CLOSING STOCK - $ 544,364 CLOSING DEBTORS - $ 562,924 CLOSING CREDITORS - $ 480,849 RETAINED EARNINGS - $ 336,276 TOTAL DEBT (interest-bearing) - $ 391,282 TRUE EQUITY - $ P&L Ratio Drivers 06/2014 7,521,554 SALES - $ 4,847,669 COST OF GOODS SOLD - $ 181,225 WAGES (Direct Expenses) - $ 2,673,885 GROSS PROFIT - $ 450,000 OWNERS REMUNERATION ALLOWANCE - $ INCOME TAX - $ 619,890 NET PROFIT - $ Overhead Ratio Drivers 06/2014 1,603,995 TOTAL OVERHEADS - $ 754,180 WAGES (Overhead) - $ 40,477 DECPRECIATION - $ 15,576 INTEREST - $ Other Ratio Drivers 06/2014 TOTAL WAGES & SALARIES (including owners 1,385,405 remuneration) - $ OWNERS DRAWINGS - $ 1,069,890 EBIT (Earnings before interest and tax) LOAN REPAYMENTS - $
Calculation
13.00
Page 7 of 11 | UBTA Financial Overview
14.00
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Page 8 of 11 | UBTA Financial Overview
Example of UBT financial health check
Copyright © Universal Business Team 2015
© Universal Business Team Ltd 2015
5
SPHERICAL 360 KNOW YOUR BUSINESS
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SPHERICAL COACH Accountability + Business Coach Whether you’re playing a sport or running a business, the universal principles of coaching remain the same. In sports, a coach pushes an athlete to achieve optimum performance by providing physical, emotional, and strategic support. The best coaches inspire their athletes to raise their performance, bring 110% of their A-game, and grab hold of greatness. We feel the best business coaches should always strive to bring out the best in their pupils so they can boost the success of their businesses. Our business coaches will provide superior support to you and your staff by offering guidance, accountability, and encouragement. Business Coaching helps owners of small and medium sized businesses with their sales, marketing, management, team building and so much more. More importantly, just like a sporting coach, your Business Coach will help you focus on the game.
Copyright © Universal Business Team 2015
The Spherical Coach Package includes: •
UBT Financial Health Check & Report – Our financial health check report monitors and analyzes fundamental areas of your business, identifies possible pain points, and highlights potential avenues for improvement. This also includes expert advice and insights from a UBT accountant.
•
Monthly Tracking of Key Financial Data – Our Spherical 360 team will provide you with a comprehensive, one-page monthly tracking report focusing on sales as well as other essential factors.
•
Quarterly UBT Financial Health Check Update & Report – You will receive an update on your FHC every financial quarter.
•
Quarterly 3-Hour Meeting With a UBT Approved Business Coach. You will receive a quarterly three-hour meeting with a UBT-approved business coach who will drill into any primary areas in your business requiring new strategic directions. Your first business coach meeting will take place one-on-one while the remaining meetings will occur via GTM.
450k 400k 350k 300k 250k 200k 150k 100k 50k k Target Sales $
Jan-15 270k
Feb-15 300k
Mar-15 386k
Apr-15 250k
May-15 301k
Jun-15 339k
Jul-15 390k
Aug-15 385k
Sep-15 358k
Oct-15 367k
Nov-15 336k
Dec-15 318k
Actual Sales $
254k
152k
GP$
80k
53k
360k
256k
k
k
k
k
k
k
k
k
134k
256k
Breakeven $
245k
245k
245k
245k
GP%
31%
35%
37%
100%
0%
0%
0%
0%
0%
0%
0%
0%
Example of monthly tracking of key financial data
Copyright © Universal Business Team 2015
7
SPHERICAL 360 KNOW YOUR BUSINESS
8
SPHERICAL CONSULT Accountability + Business Coach + Consulting Workshop + KPI Track Any successful, goal-oriented, and persistent person can benefit from the assistance of another individual who can help them brainstorm or bounce off new ideas. Gain a fresh new perspective, enhance your focus, and drive positive results into your business by taking the journey with UBT Spherical Consult. UBT Spherical Consult will work with you to achieve three goals for your business: •
A comprehensive, up-to-date understanding of your business
•
The essential principles of uniform reporting
•
Key feedback on how your business is tracking
Copyright © Universal Business Team 2015
The longer the program nourishes your business, the greater success your business will enjoy overtime: This Spherical Consult Package includes: •
UBT Financial Health Check & Report – Our financial health check report monitors and analyzes fundamental areas of your business, identifies possible pain points, and highlights potential avenues for improvement. This also includes expert advice and insights from a UBT accountant.
•
Monthly Tracking of Key Financial Data – Our Spherical 360 team will provide you with a comprehensive, one-page monthly tracking report focusing on sales as well as other essential factors.
•
Quarterly UBT Financial Health Check Update & Report – You will receive an update on your FHC every financial quarter.
•
Quarterly 3-Hour Meeting With a UBT Approved Business Coach – You will receive a quarterly three-hour meeting with a UBT-approved business coach who will drill into any primary areas in your business requiring new strategic directions. Your first business coach meeting will take place one-on-one while the remaining meetings will occur via GTM.
•
5-Hour Deep-Dive Consulting Workshop Including KPI Setup for Monitoring – After an extensive analysis and a detailed discussion about your goals and objectives, our UBTconsultants and advisors will bring you a review of your business. This workshop will include a special consultation on the major metrics and KPI’s you must be measuring to ensure ongoing success and vitality.
•
Weekly KPI Monitoring & Scoreboard Reporting – Once our UBT-approved consultants determine your KPI’s during the Deep-Dive Workshop, we will monitor your KPI progress weekly and deliver routine scoreboard reports to help your business stay on target.
Copyright © Universal Business Team 2015
9
SPHERICAL 360 KNOW YOUR BUSINESS
10
CLIENT EXPECTATIONS
SPHERICAL REPORT
Client Sign On
Spherical 360 Team Request Key Data
SPHERICAL COACH
3 hour Initial Face-to-Face Review
Quarterly Go To Meeting Review
SPHERICAL CONSULT
5 hour On-site Workshop
Weekly KPI Tracking
Data is Analyzed and Prepared into a Report
Client Receives Quarterly FHC & Monthly Sales Report Including Feedback
NEXT STEPS Join us today and discover how a spherical business outlook can unlock, unleash and upgrade the potential of your business. For more information on how to sign up for this program, please contact the Spherical 360 Team at: > Email:
[email protected] > Phone: 0800 UBT 123 > Fax: 0800 663 361 Copyright © Universal Business Team 2015
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Copyright © UBT Limited 2016 No part of this publication may be copied, reproduced, scanned, or stored in any electronic database, whether in whole or in part, in any form or by any means. Universal Business Team will not hesitate to take appropriate legal action if its rights in this respect are infringed. This UBT Brochure is provided as a useful resource. While we are confident in the products and services, you need not purchase them and should make your own enquiries and determine what is suitable for your circumstances. Although every effort has been made to provide accurate and up to date information, in issuing the document, no obligation is assumed to keep it up to date, nor is any liability assumed for the contents or for the performance of any products and services acquired or their pricing and no endorsement or guarantee is made or intended of anything in this Brochure by any UBT entity or by any officer, employee, agent or representative thereof. 18.8.16
