I'm pretty sure most of us missed the Crusades … and know very little of medieval warfare.While battle strategy in that era appears to be random and haphazard, certainly in most movies depicting that period, planning invariably eclipsed brute force. Strategy proved to be the touchpoint for success in every battle, including the ones we’re…
I'm pretty sure most of us missed the Crusades … and know very little of medieval warfare. W hile battle strategy in that era appears to be random and haphazard, certainly in most movies depicting that period, planning invariably eclipsed brute force. Strategy proved to be the touchpoint for success in every battle, including the…
Most of us weren't around during World War II ... but D-Day was the largest amphibious invasion of all time.It involved over 250,000 troops and 15,000 ships landing along a 50-mile stretch of the Normandy coast on June 6, 1944.Luck?Accident? ... or the result of rigorous strategic planning and project…
Break the impasse. Reach the Summit.Too often we set these BHAGs ("Big Hairy Audacious Goals") but don't create the milestones and timelines that give us a chance of achieving them. Put these 4 Ground Rules into action to make sure you reach the summit. Today is one of those occasions when…
The Big River series is a 12 part installment about a company desperately seeking cash to fuel their growth and the struggles they face trying to find it.
“All intelligent investing is value investing — acquiring more than you are paying for. You must value the business in order to value the stock.”
~ Charlie Munger
How important is valuation?
John Wilson, CEO of Ace Business Stuff, spent the last few weeks preparing for his meeting with Lary Blogger. He called a few days ago to follow up on his recent conversation with his attorney, Frank Lee Documents, when they spoke about investors, [kastooltip msg=”Dilution” tooltip=”A reduction in earning per share of common stock that occurs through the issuance of additional shares or the conversion of convertible securities”] and [kastooltip msg=”Valuation” tooltip=”The process of determining the current worth of a company. An analyst valuing a company may look at the company’s management, the composition of its capital structure, prospect of future earnings, and market value of assets. Judging the contributions of a company’s management would be more subjective, while calculating intrinsic value based on future earnings would be an objective technique.”].
Valuation is the bedrock for investors
“Hi, Lary. I appreciate your coming by to meet in person to talk further about some of the issues we discussed a few weeks ago. Can we talk about valuation first, since that seems to be the foundation for conversations with prospective investors? (more…)
The Big River series is a 12 part installment about a company desperately seeking cash to fuel their growth and the struggles they face trying to find it.
The Big River series is a 12 part installment about a company desperately seeking cash to fuel their growth and the struggles they face trying to find it.
What happens if we run out of cash?
“John, are you ready for our meeting? We said yesterday that we were going to meet to go over our financial projections and review a possible bank proposal.”
“I’ll be right there, Tom,” John Wilson, company CEO said to his controller.
John reflected on their conversation last week about the Company’s expected negative cash flow and the need to borrow from their bank, most of which resulted from giving extended terms to their customers.
John learned his lesson and wanted to avoid borrowing, but Tom had been pretty explicit about the need.
First, we need to review our short term cash needs
“John, I’ve gone over our short term cash needs again,” Tom said after they gathered in the conference room and were looking at some numbers on the overhead projector.
“I’ve created a simple example on the screen with all the numbers shown in thousands, which you can see in Figure 1 – Borrowing Availability, below. (more…)
“Make use of time, let not advantage slip.” ~ William Shakespeare What Does It Take to be a Great Leader? As we've all learned, most of life's lessons don't travel in a neat formation accompanied by bugles and cavalry. They arrive filthy and unkempt, prominent in the mess we've made…
The Big River series is a 12 part installment about a company desperately seeking cash to fuel their growth and the struggles they face trying to find it.
The Big River series is a 12 part installment about a company desperately seeking cash to fuel their growth and the struggles they face trying to find it.
“We’re broke,” Tom mumbled to himself. Tom Sampson is the controller of Ace Business Stuff and was reviewing his latest calculations about their cash flow.
“What do you mean, we’re broke?” Tom looked up sheepishly to see John Wilson standing in his doorway. He fingered his collar and turned to address the company’s CEO. “We can’t be broke because business has never been better,” John said. (more…)