This book is accompanied by a companion website:
The following sections provide a summary of the software and other materials you'll find on the website.
A number of illustrative performance dashboards, analytical tools, and Excel models used in the book are included in the accompanying website. These items are identified in the book with a website logo . The dashboards and spreadsheets are intended as working examples and starting points for the reader's use. An important theme of this book is to underscore the importance of selecting the appropriate measures and dashboards. It is very important to carefully select the measures and analytical tools that are most appropriate for each circumstance. Accordingly, most of the dashboards and models will have to be tailored to fit the specific needs of each situation. Please note that in order to facilitate changes to the analyses, none of the formulas in the worksheets are protected. A copy of the original files should be retained in the event that formulas are inadvertently changed or deleted.
The spreadsheets contain the data used in the examples provided in the book. In order to fully understand the worksheets, including the objective, context, and logic of the analysis, the user should refer to the appropriate example in the text. For each worksheet, the data input fields are generally highlighted in color. All other fields contain formulas. The reader should save these files under a different name and use them to begin developing dashboards and analysis for the reader's specific needs. Using the models on the Website‐ROM requires Microsoft Excel software and an intermediate skill level in the use of that software. Many of the worksheets are stand‐alone analyses that are not linked to the other spreadsheets. However, some of the workbook files contain models that require data input on the first worksheet to drive the models on subsequent worksheets in that file.
The website also includes a Quick Reference Guide (Table 2.8) that can be printed, laminated, and retained as a reference for financial terms and ratios and key aspects of valuation and performance measurement.
All contents are Excel spreadsheets unless otherwise noted.
Chapter 2 | Fundamentals of Finance |
Table 2.5 | Roberts Manufacturing Co. Historical and Estimated 2018 Financials |
Table 2.7 | Roberts Manufacturing Co. Performance Assessment Summary |
Figure 2.2 | Key Performance Trends for Roberts Manufacturing Co. |
Table 2.8 | Key Financial Terms and Measures: Quick Reference Guide |
Chapter 3 | Key Analytical Tools and Concepts |
Table 3.1 | Finished Goods Inventory – Vance Corp |
Table 3.2 | Finished Goods Inventory – Vance Corp: Descending Order |
Table 3.3 | Analysis of Finished Goods Inventory |
Table 3.4 | Stock Price Sensitivity Analysis |
Table 3.5 | Expected Value of Sales Plan |
Figure 3.1 | Decision Tree: Replace Existing Product |
Table 3.6 | Return on Equity Analysis |
Figure 3.2 | Revenue Process and Accounts Receivable Analysis |
Table 3.7 | Order Processing Costs Allocated by Sales Dollars |
Table 3.8 | Costs Assigned Based on Activity |
Table 3.9 | Business Model Illustration: Traditional View |
Table 3.10 | Business Model Illustration: Comprehensive View |
Table 3.11 | Business Model Benchmark Summary Based on Company Reports and SEC Filings |
Table 3.12 | Varying Business Models under the Same Roof |
Table 3.13 | Business Models in a Homogeneous Company |
Table 3.14 | Cost and Breakeven Analysis |
Table 3.15 | Operating Leverage Illustration: Current Situation |
Table 3.16 | Operating Leverage Illustration: Revised Cost Structure |
Chapter 4 | Developing Predictive and Analytical Models |
Figure 4.1 | Financial Model Architecture |
Table 4.2 | Product Revenue and Margin Documentation |
Table 4.3 | Revenue Plan Model – Existing Products |
Table 4.4 | Revenue Plan Model – New Products |
Figure 4.2 | Model Summary |
Chapter 5 | Building Analytical Capability |
Table 5.1 | Experience, Skill, and Competency Inventory |
Table 5.2 | Best Practices Checklist Excerpt |
Table 5.3 | Report and Analysis Inventory and Assessment |
Table 5.4 | FP&A Improvement Plan |
Chapter 6 | Communicating and Presenting Financial Information |
Figure 6.1 | Revenue Process–Accounts Receivable Dashboard |
Figure 6.2 | Cost Pie Chart |
Figure 6.3 | Histogram of Expenses |
Figure 6.4 | Comparative Histogram Chart |
Figure 6.5 | Doughnut Graph – Percentage Completion |
Figure 6.6 | Line Graph |
Figure 6.7 | Stacked Column Graph |
Figure 6.8 | Stacked Columns with Float |
Figure 6.9 | Bar Chart |
Figure 6.10 | Dual Axis Graph |
Figure 6.11 | Reconciliation (Waterfall) Graph |
Table 6.1 | Sensitivity Chart |
Figure 6.12 | Speedometer Chart |
Figure 6.13 | Human Capital Management Assessment |
Chapter 7 | Business Performance Management |
Table 7.2 | Project Timeline |
Chapter 8 | Dashboards and Key Performance Indicators |
Figure 8.2 | Personal Health and Fitness Dashboard |
Figure 8.4 | Quarterly Corporate Dashboard |
Figure 8.5 | Example of Weekly Dashboard |
Figure 8.6 | New Product Development Dashboard |
Figure 8.7 | Revenue Process/Receivables Improvement Dashboard |
Figure 8.8 | Dashboard for Specialty Retail: Lawn and Garden |
Figure 8.9 | Dashboard for Ski Resort |
Figure 8.10 | Dashboard for Medical Center |
Chapter 9 | Institutionalizing Performance Management |
Figure 9.3 | Business Unit Accountability Dashboard |
Chapter 10 | Measuring and Driving What's Important: Innovation, Agility, and Human Capital |
Figure 10.1 | Historical Performance Recap: Apple |
Figure 10.2 | Comparative Performance: Netflix and Blockbuster |
Figure 10.4 | New Product Development Dashboard |
Figure 10.5 | Innovation Dashboard |
Figure 10.9 | Agility Dashboard |
Table 10.2 | Investment in New Hire |
Figure 10.11 | HCM Portfolio Analysis |
Table 10.3 | Headcount Analysis |
Figure 10.13 | HCM Dashboard |
Chapter 11 | The External View: Benchmarking Performance and Competitive Analysis |
Figure 11.1 | Quarterly Performance Recap: Under Armour |
Table 11.1 | Comprehensive Benchmark Analysis |
Figure 11.3 | Apple Performance Trends |
Figure 11.4 | Amazon Performance Trends |
Table 11.2 | Benchmark Survey and Target Worksheet |
Chapter 12 | Business Projections and Plans: Introduction and Best Practices |
Figure 12.2 | Historical versus Plan Trends |
Figure 12.3 | Sales Run‐Rate Analysis |
Figure 12.4 | Actual Revenue versus Forecast Range |
Table 12.1 | Upside and Downside Event Summary |
Figure 12.5 | Sensitivity Analysis: Key Assumptions |
Figure 12.6 | Scenario Recap |
Table 12.2 | Revenue Probability Analysis |
Figure 12.7 | Using Business Model to Develop Projections |
Chapter 13 | Budgets, Operating Plans, and Forecasts |
Table 13.1 | Traditional Departmental Budget |
Figure 13.2 | Budget Roll‐Up Illustration |
Figure 13.3 | Dashboard: Evaluation of Operating Plan |
Table 13.2 | Rolling Forecast Method |
Table 13.3 | DBO Supporting Schedule: Product Margins |
Table 13.4 | DBO Supporting Schedule: Gross Margins |
Table 13.5 | DBO Supporting Schedule: Marketing |
Table 13.6 | DBO Income Statement |
Table 13.7 | DBO Supporting Schedule: Balance Sheet and Cash Flow |
Figure 13.8 | DBO Presentation Summary |
Chapter 14 | Long‐Term Projections |
Table 14.1 | LTP: Revenue and Margin Projections |
Table 14.2 | LTP: Operating Expense Projections |
Table 14.3 | LTP: Capital Assets and Depreciation |
Table 14.4 | LTP: Capsule Financial Summary |
Figure 14.2 | LTP: Presentation Summary |
Table 14.5 | Traditional Retail Model |
Table 14.6 | New Reality for Established Retailers |
Figure 14.3 | Comparison of Traditional versus New Reality Retail |
Chapter 15 | Revenue and Gross Margins |
Table 15.1 | Revenue Planning Worksheet: Product Detail |
Table 15.2 | Forecast Evaluation Worksheet |
Figure 15.2 | Revenue Variance |
Figure 15.3 | Revenue Change Analysis |
Table 15.3 | Market Size and Share Analysis |
Table 15.4 | Revenue Forecast Accuracy |
Figure 15.4 | Forecast Progression Analysis |
Table 15.5 | Quarterly Sales Trend |
Figure 15.5 | Year‐over‐Year Growth |
Figure 15.6 | Revenue in Product Development Pipeline |
Figure 15.7 | Backlog Analysis |
Table 15.6 | Comprehensive Revenue Measures |
Figure 15.8 | Revenue Growth and Innovation Dashboard |
Table 15.7 | Gross Margin Analysis |
Figure 15.10 | Gross Margin Reconciliation |
Figure 15.11 | Dashboard: Gross Margin and Pricing Strength |
Chapter 16 | Operating Expenses and Effectiveness |
Table 16.1 | Sales and Value Added per Employee |
Table 16.2 | Head Count Analysis |
Figure 16.3 | Revenue Patterns |
Table 16.3 | Critical New Product Development Status |
Table 16.4 | Natural Expense Code Analysis |
Figure 16.4 | Natural Expense Code Analysis Histogram |
Figure 16.5 | Operational Effectiveness Dashboard |
Figure 16.6 | New Product Development Dashboard |
Chapter 17 | Capital Management and Cash Flow: Working Capital |
Table 17.1 | Operating Capital (Working Capital Less Cash and Debt) |
Table 17.2 | Operating Capital Forecast – Thomas Industries |
Table 17.3 | Working Capital Improvement Illustration |
Table 17.4 | DSO Count‐Back Illustration |
Table 17.5 | Best Possible DSO Estimate |
Figure 17.4 | Revenue Process–Accounts Receivable Dashboard |
Figure 17.5 | DSO Drivers |
Table 17.6 | Accounts Receivable Aging Schedule for Morehouse Company |
Table 17.7 | Accounts Receivable Past Due Analysis |
Figure 17.6 | Past Due by Root Cause |
Table 17.8 | Accounts Receivable Roll‐Forward Summary |
Figure 17.8 | Excess and Obsolete Inventory Summary |
Figure 17.9 | Supply Chain and Inventory Dashboard |
Table 17.9 | Inventory Trend Schedule by Category |
Table 17.10 | Inventory Roll‐Forward Summary |
Table 17.11 | Inventory Forecast Analysis |
Chapter 18 | Capital Management and Cash Flow: Long‐Term Assets |
Table 18.1 | Asset Utilization Review |
Table 18.2 | Projecting Property and Equipment and Accumulated Depreciation |
Table 18.3 | Acquisition Purchase Price Allocation |
Figure 18.3 | Goodwill and Intangible Assets as a Percentage of Total Assets |
Table 18.4 | Estimating the Economic Cost (Penalty) of Retaining Excess Cash |
Figure 18.4 | Long‐Term Capital Dashboard |
Chapter 19 | Risk, Uncertainty, and the Cost of Capital |
Figure 19.6 | Sensitivity of Value to Cost of Capital |
Table 19.3 | WACC Computation |
Figure 19.9 | WACC Visual Summary |
Figure 19.12 | Cost of Capital Dashboard |
Chapter 20 | Capital Investment Decisions: Introduction and Key Concepts |
Table 20.1 | NPV Illustration |
Table 20.2 | IRR Illustration |
Table 20.3 | Payback Illustration |
Table 20.4 | Combined Illustration |
Table 20.5 | Capital Expenditure: Manufacturing Project |
Table 20.6 | Capital Expenditure: Pharmaceutical Product Development |
Chapter 21 | Capital Investment Decisions: Advanced Topics |
Table 21.1 | Project Investment Analysis: Procrastination Pharmaceutical |
Table 21.2 | Sensitivity Analysis |
Table 21.3 | Sensitivity and Break‐Even Analysis |
Figure 21.4 | Scenario Recap |
Figure 21.6 | Event/Option Tree |
Figure 21.7 | Option Event Summary for Procrastination Pharmaceutical |
Figure 21.8 | Option Value Illustration |
Figure 21.9 | Capital Investment Summary |
Table 21.4 | Capital Investment Allocation |
Table 21.5 | Capital Plan Ranking |
Table 21.6 | Review of Capital Investments |
Chapter 22 | Business Valuation and Value Drivers |
Table 22.1 | DCF Valuation Model |
Table 22.2 | DCF Sensitivity Analysis |
Figure 22.2 | Value Decomposition |
Table 22.3 | Roberts Manufacturing Co. Valuation Summary Table |
Figure 22.3 | Roberts Manufacturing Co. Valuation Summary Graph |
Figure 22.4 | Valuation Summary |
Table 22.4 | Benchmarking Summary |
Table 22.5 | Summary of Full Potential Value |
Figure 22.6 | Estimating Full Potential Valuation |
Chapter 23 | Analysis of Mergers and Acquisitions |
Figure 23.1 | Stand‐Alone and Synergy Value |
Table 23.1 | Sheridan Acquisition Co. Acquires Roberts Manufacturing Co. |
Table 23.2 | Accretive‐Dilutive Test Illustration |
Table 23.3 | Control Premium Analysis |
Table 23.4 | DCF Stand‐Alone |
Table 23.5 | DCF Synergy and Stand‐Alone |
Table 23.6 | Synergy Valuation and Control Premium Test |
Figure 23.3 | Sources of Acquisition Value |
Table 23.7 | Economic Profit/ROIC Test |
Figure 23.4 | Comparative Value Summary: Acquisition of Roberts Manufacturing Co. |
Figure 23.5 | M&A Dashboard |
Figure 23.6 | Dashboard for a Specific Acquisition |
The user may need to modify some of the charts and graphs on the website in order to substitute specific performance measures for those contained in the sample dashboard. In order to modify chart titles, alter axis labels, and make other changes to charts, click on the chart, then select Chart in the menu commands and then select Options. A menu of available chart options will be presented, including titles, labels, and scale selections.
The user may also want to change the scale of the charts to better present the data for each situation. This can be accomplished by double clicking on the “Value Axis” label on the graph and selecting Scale to change axis minimum and maximum values.
A glossary of commonly used financial, value, and performance management terms is included in the back of the book.
Jack Alexander