I guess there should be 2 main group criterias; 1-evaluation of the business and 2- financials
and 1 should be broken down to
-dominant brand
-repetitive customers
-quality products and services
-expansion possibilities
and 2 should consist of
-Sales Growth (Sales / Pr. Yr. Sales)
-Gross Margins ((Revenue - COGS) / Revenue)
-Net Margins (Net Income / Revenue)
-Cash-to-Debt Ratio (Cash & Equivalents /(ST Debt + LT Debt))
-Flow Ratio ((Current Assets - Cash & Equiv.) / (Current Liab. - ST Debt))
-Cash Margin ((Operating Cash Flow - Cap. Ex.) / Revenue)
and each sub category should be weighted as (1) . For the financials the comparison should be between actuals and standarts. If the total points are above 7, the organization is a rule maker in its market...
What do you think?
Friday, October 26, 2007
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