Important Aspects of Business Strategy

Important Aspects of Business Strategy

Most organizations only realize 60% of their strategies potential value due to issues in strategic development and/or execution. This gap between the strategic plan and actual performance results is known as the Strategy-to-Performance Gap.

This presentation explains the Strategy-to-Performance Gap, its root causes, as well as identifies 7 rules to follow to close this gap. These rules allow an organization to objectively assess any performance shortfall and determine whether it originates from the strategy, the plan, the execution, or its employees’ capabilities.

For a further discussion and guidance on Strategy join us with Ahmed Seedat on 7 August 2018 at Standard Bank Kingsmead Auditorium at 5:30 pm

RSVP: 0312081898 or kzn@minara.org.za or let us know in the comments below that you will be attending

Financial Modeling | An Inside Look

Financial Modeling | An Inside Look

An Inside Look at Financial Modeling for Businesses

Financial modelling is an instrument that can be utilized to predict the picture of a financial or security instrument or the financial performance of a company depending on the entity’s historical performance. In financial modelling, financial models are prepared that are specific to a company for use in decision-making and performance of financial business analysis. Essentially, it is merely the construction of a financial representation of aspects of given security of the firm. It is also a mathematical model of various elements of a company’s financial health. The financial model can be compiled on paper or in excel allowing ease of analysis of the influence of various assumptions or the alteration in the value of different variables thus ensuring increased flexibility.

  • Financial modelling can be considered as a mirror indicating:
  • Whether an organization needs additional funds in form of equity or debt
  • Comparative analysis (which companies to invest in for better returns)
  • Determining whether a company had a shift in direction in terms of expansion, loss of customers, or other situations
  • Valuation and analysis of FPOs, IPOs, and Firms
  • The business’ reaction to various market conditions or financial situations
  • Assessment and identification of risk levels
  • Determining strategies and business plans by identifying the business’ weaknesses and strengths

An effective financial model should evaluate risks, communicate assumptions and conclusions clearly, focus on the primary cash flow drivers, and be comparably simple.

The working in financial modelling should be desirably free from errors and easy to understand and read for purposes of auditing. In order for a financial model to be reliable, easy to check, and easy to navigate, it should follow the following principles.

  • Versions of documents should be kept in the event that future upgrades occur
  • There should be a written executive summary on top if it is required
  • Page breaks should be used if need be
  • The correct number of sheets should be maintained
  • The firm’s standard format should be followed for the most accessible results

Building a Financial Model

Financial modelling typically involves making assumptions concerning the future performance of a business and it is one of the most important and subjective elements of company valuation.

Various approaches to forecasting in financial modelling include:

  • Versions of documents should be kept in the event that future upgrades occur
  • There should be a written executive summary on top if it is required
  • Page breaks should be used if need be
  • The correct number of sheets should be maintained
  • The firm’s standard format should be followed for the most accessible results