© Ganesh Srinivasan, 2006. All international rights reserved.

This information cannot be reproduced or distributed without legal permission

from me [sganesh13@yahoo.co.in ] or [sganesh13@gmail.com ]

First of the Series of Presentations

 Analysis for Some Companies

Operational Analysis

 The Basis
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Operational Analysis - Basis
© Ganesh Srinivasan, 2006. All international rights reserved.

Revenues
Income Cost Of Goods Sold [COGS]
Statement These
elements are
Sales, Genl. & Admn. [SG & A] Expenses taken as
Inputs

Cash & Equivalents Values from

Current Assets Management
Balance Net Receivables
Reports
Sheet Working Capital
Inventories [at least for 3
years]
Other Current Assets
Available in
Current Liabilities public domain
or from
Accounts Payable company
Sub level elements are / can be taken sources
Short Term Debts
Guideline:- elemental value > 1% of Revenues
Other Current Liabilities
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Operational Analysis - Basis
© Ganesh Srinivasan, 2006. All international rights reserved.

Revenues
Income Cost Of Goods Sold [COGS]
Statement A software for
analysis is
Sales, Genl. & Admn. [SG & A] Expenses developed by
me

Cash & Equivalents The software

Current Assets computes
Balance Net Receivables

Sheet Working Capital

Inventories CAGR
[Compounded
Other Current Assets Annual Growth
Rate] for each
Current Liabilities element

Accounts Payable Also each

element as %
Short Term Debts of Revenues
Other Current Liabilities
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from me [sganesh13@yahoo.co.in ] or [sganesh13@gmail.com ]
Operational Analysis - Basis
© Ganesh Srinivasan, 2006. All international rights reserved.

Revenues
Income Cost Of Goods Sold [COGS] The software
Statement identifies and
segregates the
Sales, Genl. & Admn. [SG & A] Expenses elements as

Cash & Equivalents Well

Current Assets Managed
Balance Net Receivables

Sheet Working Capital

Inventories Needs to be
improved
Other Current Assets

Current Liabilities Course

Correction
Accounts Payable
The ‘Speeds of all elements in the entire needed of
Operational Chain need to be smoothened out’ Short Term Debts what I call as
‘Knee-Jerk’
CAGR of Revenues being the governing speed Other Current Liabilities reactions
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Operational Analysis - Example
© Ganesh Srinivasan, 2006. All international rights reserved.

Legend: [CAGR%; As % of Revenues]

Revenues [23.4%; 100%]
Income COGS [24.3%; 76%]
Statement Areas that are
SG & A [8.3%; 7%]

Cash [14.7%;8%] Well

CA [17.6%; 44%]
Managed
Balance Receivables [20%; 24%]

Sheet WC [6.1%; 5%]

Inventories [19.1%; 6%] Needs to be
improved
Other CA [12.9%; 7%]

CL [19.8%; 40%] Course

Correction
Payable [23.2%; 10%]
needed of
what I call as
TOYOTA ST Debts [18.3%; 17%]
‘Knee-Jerk’
Other CL [19.6%; 14%] reactions
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Operational Analysis - Example
© Ganesh Srinivasan, 2006. All international rights reserved.

Legend: [CAGR%; As % of Revenues]

Revenues [28.6%; 100%]
Income COGS [28.7%; 73%]
Statement Areas that are
SG & A [26%; 21%]

Cash [-2%; 4%] Well

CA [21%; 34%]
Managed
Balance Receivables [31.8%; 11%]

Sheet WC [17.2%; 8%]

Inventories [17.5%; 9%] Needs to be
improved
Other CA [11.6%; 5%]

CL [22.1%; 27%] Course

Correction
Payable [21%; 13%]
needed of
what I call as
Suzuki Motor ST Debts [12.2%; 4%]
‘Knee-Jerk’
Other CL [29.4%; 11%] reactions
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Operational Analysis - Example
© Ganesh Srinivasan, 2006. All international rights reserved.

Legend: [CAGR%; As % of Revenues]

Revenues [19%; 100%]
Income COGS [19.3%; 67%]
Statement Areas that are
SG & A [21.6%; 26%]

Cash [23.2%;10%] Well

CA [22.9%; 49%]
Managed
Balance Receivables [20.2%; 21%]

Sheet WC [52.7%; 11%]

Inventories [23.1%; 10%] Needs to be
improved
Other CA [31.5%; 9%]

CL [17%; 39%] Course

Correction
Payable [17.5%; 10%]
needed of
what I call as
Honda Motor ST Debts [8%; 12%]
‘Knee-Jerk’
Other CL [28.7%; 19%] reactions
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Operational Analysis - Example
© Ganesh Srinivasan, 2006. All international rights reserved.

Legend: [CAGR%; As % of Revenues]

Revenues [2.5%; 100%]
Income COGS [5.7%; 79%]
Statement Areas that are
SG & A [-6%; 11%]

Cash [38.5%;40%] Well

CA [4%; 129%]
Managed
Balance Receivables [8.5%; 81%]

Sheet WC [8.6%; 114%]

Inventories [24.2%; 12%] Needs to be
improved
Other CA [-11.7%; 23%]

CL [-27.5%; 14%] Course

Correction
Payable [6.4%; 14%]
needed of
what I call as
Ford Motor ST Debts
‘Knee-Jerk’
Other CL [-38.1%; 6%] reactions
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from me [sganesh13@yahoo.co.in ] or [sganesh13@gmail.com ]
Operational Analysis - Example
© Ganesh Srinivasan, 2006. All international rights reserved.

Legend: [CAGR%; As % of Revenues]

Revenues [1.8%; 100%]
Income COGS [1.4%; 74%]
Statement Areas that are
SG & A [-7.1%; 8%]

Cash [29.5%;43%] Well

CA [18.4%; 287%]
Managed
Balance Receivables [21.2%;205%]

Sheet WC [22.7%; 219%]

Inventories [10.8%; 8%] Needs to be
improved
Other CA [7.8%;42%]

CL [6.5%; 68%] Course

Correction
Payable [2.5%; 15%]
needed of
what I call as
General Motors ST Debts
‘Knee-Jerk’
Other CL [7.9%; 53%] reactions
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More to Follow
© Ganesh Srinivasan, 2006. All international rights reserved.

• Next presentation
– Analysis for some more companies from across
industry segments
• Third presentation
– Approach to implementation
– Identification of projects with defined objectives
• Fourth and subsequent presentations
– Few more case studies, some as desired by the group