Key to success – recurring cash flows
Key to success for Entrepreneurs – persistence!
Key to success for BP- it Explains 1) Management, 2) Management, 3) CF Executive Summary – the most important section Include ROI and NPV (IRR?) Ratio analyses
Key point – must use the same accounting method
Key point: Successful entrepreneurs know their cash position at all times. Chapter 5:
Liquidity – the most important ratios
Key point – Entrepreneurs should know how many widgets she/he has to sell to break even. Purpose: to help people make good decision
Introduction – this is St. Edward’s University!
In contrast to the chapter’s opening sentence, the firm’s Values are more important than positive cash flows. Always have enough cash (there are no other goals)
A/R Credit policy-Must be a formal written policy
Managing Accounts Payable -Pay bills before their due dates – builds goodwill Working Capital Management -How much cash to have? (don’t spend it all!) Chapter 7:
Key point – Valuation is a subjective art (and part science too). Key point - Entrepreneurs should value their company at least once per year. Key point – Free Cash Flow analysis is essential for entrepreneurs. Key point – Past and future cash flows determine a firm’s value. Key Point – Valuation methods include: asset based; cash flow capitalization; and multiples. Key Point - Valuation helps determine a sale price and how much equity to give up. Chapter 8:
Key point – never run out of money
Key point: Really understand the business, product, and market Key point: Have a good product
Key point: Choose the source of capital wisely
Key Point: Investors invest in the entrepreneur
Key point – The type of debt obtained depends on the firm’s point in its life Key point: With debt financing, the entrepreneur retains ownership Key point: Debt financing interest must be paid – it is a drain on cash...
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