CFO Career Grid

1. CFO Career Grid Corporate Crossfunctional International New Co.’s Manager Entry Development of Finance Planning, Reporting, Investor Relations Audit Tax Acct. Cost Accnt. Business Analysis, Treasury Strategic Planning

2. Tax - Responsibilities • Federal • Social Security • Corporate • Sales • State • Sales • Payroll • Audit • Any of the above.

3. Tax - Personnel • Personnel • Rules & Regs.  Specialized/Technical People who make it their career • During Audit Time(s) • Need other Specialists & Best Negotiators to provide support

4. Tax - Responsibilities • Minimization of Given Tax Payments • Effects of M&A’s • Classification of Assets • Ownership • Depreciation

5. Tax - Responsibilities • International Planning Function • For at least 4-5 Countries • (or different places with Impacts on Business) • Incentives • Tax-Sheltered Programs

6. International Tax Planning U.S.GmbHEire 35% 55% 10% Royalties Trademarks Management Fees (Same Scenario w/ States) • State Income Taxes •Property Taxes •Sales Taxes •Corporate Payrolls

7. Lessons Learned - Tax • Aggressively Challenge IRS • But reserve aggressively as well • Global Businesses demand - World Class Planning • Always include Tax Management in M&A • Planning and Negotiations • At the Beginning & Strategic Level

8. Operations & Cost Accounting • Highly Competitive Global Economy • Firms that Accurately Measure and Understand their Costs may Survive. Those that Don’t, Will Not.

9. Operations & Cost Accounting • Controlling Costs & Capital • Raw Materials • Processes • Systems • Capital Budgeting & Returns on Capital -- Productivity

10. Operations & Cost Accnt. SystemImperatives • CEO & Team Understand Concepts of System • Shared commitment to making them work efficiently. • Timely & Accurate (System) Numbers

11. Operations & Cost Accnt. SystemImperatives • Integrated Systems  One Forecast • Marketing - Updated & Sensitized • Manufacturing as necessary • Distribution, etc… (-bonuses based on the above One Forecast)

12. Operations & Cost Accnt. Systems • Management from Top to Bottom must Know the Systems • Lower Levels must be trained in the use of the systems and the need for required discipline. • i.e.: Time Lines & Accuracy

13. Operations & Cost Accnt. Systems Responsibilities: • Sales & Production Forecasts • Procurements • Maintenance of Product Data Records • Info. must be clearly defined & accepted by the members of management • Inventory Levels • Shrinkage, Obsolescence

14. Operations & Cost Accnt. Systems • Assigned to Specific Management Fxns. • Computer Based Systems • Updated on a Daily Basis • For Key Items: Manufactured, Used, or Purchased • Constant Training & Retraining • Accountability for Training

15. Operations & Cost Accnt. Systems • Manufacturing/Inventory Planning Systems • Must be Soundly Conceived • Integrated with: • Financial/Cost Accounting Systems

16. Operations & Cost Accounting Capital Appropriation Needs: • Climate in which Innovation Flourishes • Acceptable method for Evaluation of Proposals • Expenditures on a project to be Controlled & Periodically Reviewed • Planned Post-Audit Program • Shared Lessons Learned

17. Operations & Cost Accounting Budgeting & Financial Models • Capital Expenditures • Cost of Capital • Capital Rationing • i.e.: Strategically Important Projects • NPV & EVA

18. Analysis Methods • Breakeven Point • Cost/Volume • Variance

19. Break-Even Point • B.E.P. = Sales Revenue that Equals the Total Variable and Fixed Costs for a Given Volume at a Particular Capacity Utilization. • BEP units = Fixed Costs Unit Contribution • BEP dollars = Fixed Costs Contribution Margin

20. Cost-Volume-Profit Analysis $ Contribution Profit B.E.P. Fixed Costs Loss Units

21. Contribution Analysis • Contribution = Excess of Sale(s) over the Variable Costs or the Amount of Money Available to Cover Fixed Costs & Generate Profit.

22. Variance Analysis • Ability to Analyze & Explain The Casual Factors Behind Changes in Profits.

23. Variance Analysis • Volume Variance Variance = = (100 units – 110 units) * $4 = ($ 40) -- Unfavorable due to Fewer Units Actual Quantity Standard Quantity Standard Profit Per Unit _ *

24. Variance Analysis • Price/Cost Variance Variance = = 110 units * ($9.5/unit - $10/unit) = $ 55 -- Favorable if Price Unfavorable if Cost Actual Quantity Actual Price/Cost Standard Price/Cost _ *

25. Earnings Variance Analysis

26. Earnings Variance Analysis Good Volume Offset by Lower Price Levels and Higher Unit Costs

27. Operations & Cost AccountingNeed to Account for & Manage: • Overhead • Payroll, Benefits, etc… • Absorption • Sunk • Fixed • Semi-Variable • Influenced • Affects of every addition Costs

28. Operations & Cost Accounting Manage By: • Standard Cost Accounting • Std’s, Budgets, Variances • Inventory Valuation and Control • Avg., Std., LIFO, FIFO, Cost Specific LOT

29. Operations & Cost AccountingManage By: • Budgeting • Cycles • Annual are the most effective • Gamesmanship • Under promise, Over deliver • Allocations • Know their Influences

30. Lessons Learned - Restructuring • Bite the Bullet, for everyone’s sake • Cut Once and Cut Deep • Collapse Layers • Keep it Secret • Do it Quickly • Do All that You Can for Employees • Continue Recruiting

31. L.L. – Restructuring II • Empower People – Increase Span of Control • Over Communicate, At All Levels • Be Humble, Be Honest • For People and Markets: “Cutting Losses Rather Than Hoping for Rebounds.” “Hope is Not a Strategy”