LECTURE PRESENTATION: Assessments - Data Sheets 2013
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The document provides an overview of Cathedral Consulting's data sheet methodology. It discusses where data sheets fit in the consulting process, how they are completed, their typical components, differences between business review and operational assessment data sheets, and how financial analysis is presented for each. Key points include: data sheets are the analysis tool used in the work phase; they have topics, data, best practices, and findings sections; completion involves gathering and analyzing all available information; and financial analysis highlights trends and ratios to identify issues or concerns.
![is competing for this market segment in the area, and
how much room remains for growth of the E-Step
Consulting, Inc. model.
With that being said, the company has done well in
understanding the market and providing services to
meet a need in the market without this official analysis.
The desired strategic partnerships could add a unique
advantage in a competitive market.
4. Some observations on this exercise:
a. The data and findings were completed.
b. But the findings do not connect well with the
data or the best practices. It suggests that
there was other information that was not
entered in the Data section.
c. The engagement was focused on the need for
revenue growth, so more attention here
would have been useful.
d. In a MD review, this should be highlighted
and more development done.
e. Let’s look at Union Data Sheets:
i. Under the first Topic, Mission.
ii. Data contains the following answer:
The mission of the International Union Against Tuberculosis and Lung Disease is to
"bring innovation, expertise, solutions, and support to address health challenges in lwo
and middle income populations around the world."
iii. Best Practices has the following:
A mission statement states your beliefs which lead to a statement of purpose and
function. This statement provides future-oriented thinking and a laser-like focus.
iv. The findings and implications has the following:
[no posting]
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LECTURE PRESENTATION: Assessments - Data Sheets 2013
- 1. 1A Assess3 Data Sheets.WMA Cathedral Career Training Associate Track 1 Assessment 3 Data Sheets Topics 1. 2. 3. 4. 5. Where do the Data Sheets fit in Consulting? How are the Data Sheets done? What are the components of the Data Sheets? What are the differences between the BR and OA Data Sheets? What is the financial analysis for BR and OA? Reading (May need to be ‘copied’ to open. Some files show that they are not available, but when copied to a local folder, they open easily.): 1. OA Data Sheets Non-Profit (by cglynn@cathedralconsulting.com - 2), this folder. 2. OA Data Sheets THE UNION 120918, this folder. 3. TEMPLATE Data sheets Professional Service Firm 091107, this folder. 4. TEMPLATE Data sheets Standard 110609, this folder. 5. Financial Analysis for BR.xls, this folder. 6. FinAnalysisFamUni111201(1), this folder. 1
- 2. 7. BR Report E Step Consulting 2010, this folder. 8. OA Data Sheets THE UNION 120918, this folder. 9. OADataSheetsFamUni121204, this folder. Lecture 1. Where do the Data Sheets fit in Consulting? a. Data Sheets are the analysis tool to be used in the Work Phase of a consulting project. i. The engagement letter identified and shaped the issues. ii. The Work Phase started with the planning of the questionnaire, the interview and the gathering of other data. iii. Now the data should be gathered and the analysis part of the Work Phase begins. 2. What are the components of the Data Sheets? a. The Data Sheets have the following components: i. Topic. 1. The flow of the Data sheets should following the Questionnaire which in turn should allow for a reasonable flow to evaluate the enterprise. 2. The topic should match the question on the Questionnaire. ii. Data 1. The Data is the answers given to the question, plus all other information gathered. 2. It is important to put all of the answer/information in this box. 3. While the Data Sheet follows the Questionnaire, it is to be the gathering place for analysis of all information on the enterprise. iii. Best Practices. 2
- 3. 1. Best practices are an abbreviated look at the alternatives for the topic. 2. When a Questionnaire is prepared, these best practices should also be prepared. 3. In effect this component is the “Research” in the Assessment. 4. Therefore, doing adequate preparation of the Data Sheet in creating the Questionnaire is how Cathedral efficiently prepares the alternatives for issues identified. 5. The Best practices will also be the trigger for identifying issues, weakness or opportunities or threats that need to be addressed. iv. Findings and Implications: 1. Findings and implications are developed from the comparison of the data received to the best practices. 3. How are the Data Sheets done? a. Data Sheets should be completed by the Associate who has answered the questions and done the research. b. While there is a temptation to put the question answers directly on the data sheets, this has proven to be a bit risky, since the data sheets do not have the full information that the Questionnaire will have. c. The process is as follows: i. Taking the answers to the Questionnaire and research and other information, the Data component is completed. ii. After the Data component is completed, the best practices are compared to the data received. iii. The comparison should highlight differences. These differences need to be noted. 3
- 4. iv. The material differences should be highlighted for MD review. v. The completed Data sheets are reviewed with the MD to identify the SWOT components of the Assessment. d. Let’s consider the Data Sheets for E.Step Consulting. i. The Data sheets have been completed and included as an addendum. 1. Many clients find this a useful read. 2. Clients also find that it validates the work done in the Work phase. ii. On page 13 of the report, the Data Sheet topic is Market Positioning: 1. There are several answers given in the Data component: According to its website, E-Step Consulting has been assisting higher educational institutions to implement various applications within the Oracle PeopleSoft® line of products since 2000. New service innovations include strategic partnerships. 2. The Best practices highlight some principles: Management should know the market and then position the company accordingly. Some market segments can be generally defined as: a) Pricing be) Quality c) Speed of service d) Strategic relationships form effective market penetration strategies. These relationships can range from referrals to full joint ventures. 3. The Findings and implications have some recommendations: Knowledge of competition and what is occurring in the market place is important for success to continue. A competitor analysis would be helpful to see who else 4
- 5. is competing for this market segment in the area, and how much room remains for growth of the E-Step Consulting, Inc. model. With that being said, the company has done well in understanding the market and providing services to meet a need in the market without this official analysis. The desired strategic partnerships could add a unique advantage in a competitive market. 4. Some observations on this exercise: a. The data and findings were completed. b. But the findings do not connect well with the data or the best practices. It suggests that there was other information that was not entered in the Data section. c. The engagement was focused on the need for revenue growth, so more attention here would have been useful. d. In a MD review, this should be highlighted and more development done. e. Let’s look at Union Data Sheets: i. Under the first Topic, Mission. ii. Data contains the following answer: The mission of the International Union Against Tuberculosis and Lung Disease is to "bring innovation, expertise, solutions, and support to address health challenges in lwo and middle income populations around the world." iii. Best Practices has the following: A mission statement states your beliefs which lead to a statement of purpose and function. This statement provides future-oriented thinking and a laser-like focus. iv. The findings and implications has the following: [no posting] 5
- 6. v. What do we see? 1. This is a case where the data is entered well. 2. But the findings do not follow the application of the best practices. f. The Family Unity Data sheets are an excellent example of fully completed Data Sheets. i. Topic: Mission ii. Data: “To contribute to the prosperity of the working boys and their families is to contribute to the present and future welfare of the community.” Members in the meeting were not able to clearly recite the mission statement. iii. Best Practices: A mission statement states your beliefs which lead to a statement of purpose and function. This statement provides future-oriented thinking and a laser-like focus. iv. Findings: It is recommended that board members and staff are able to recite the mission statement. g. One of the real issues is that Data Sheets take time. i. The time for entry and review is often pressured to a minimum. ii. But the Data sheet is the analysis form that assures a measure of consistency in quality of thinking. iii. The Data sheet gives the Associate the ability to see things they are not as familiar with. iv. The Data Sheet gives the MD a way to look at the data gathered to identify concerns and opportunities for the client. v. Therefore, it needs to be the engagement team’s collective responsibility to focus on good completions of the Data Sheets. 6
- 7. h. Data Sheets need to be saved as part of the work product for an engagement, even if not included in the report. 4. What are the differences between the BR and OA Data Sheets? a. The formats are identical. b. The flow is consistent with the Cathedral Way for Assessment Tools. c. However, it is important to be sure that each question or topic is fully “best practiced.” d. It is the discipline of doing the Questionnaire with the Best practice research that gives the depth of analysis that good consulting looks to generate. e. Alternatives should be part of the Best practices. This then allows the Associate and MD to evaluate alternatives to issues that may be identified. 5. What is the financial analysis for BR and OA? a. The financial analysis is designed to use the prior years’ information to give normal trend and other information. i. The financial analysis should be presented in the Background Section of the Report, since it is based on historic data. ii. Good financial analysis will add to the SWOT findings. b. The template in this folder is a good example of the type of financial analysis warranted. The components are: i. Sales trends. ii. Revenue/customer grouping and trends. iii. Cost of Sales trends, including components. iv. Income statement trends, using an abbreviated income statement. v. Balance sheet trends. vi. Basic balance sheet rations, such as working capital and liquidity. vii. Equity trends, including amount and returns. 7
- 8. c. The purpose of financial analysis is to highlight the information that the financials reveal. i. Simple examples are 1. Profitability – a. Is it going up or down i. As a % of sales ii. In whole dollars. 2. Liquidity – a. How much working capital is needed? b. What is the trend of working capital? c. How much liquidity is available? d. Is there a seasonality to working capital? ii. The key is to look at the financials fully as given. iii. Then to evaluate them according to any issues or worries that the client may have. 1. For example, if the client has expressed concerns about cash flow, the working capital analysis is critical. 2. If the client expressed concerns about profits, the expense analysis is critical. Product profitability may be another critical analysis. 8
- 9. 3. If the client has expressed concerns about revenue, the customer and revenue components is critical. Fee Income by Customer for 2007 Caraway Osprey Maple Ivory Giraffe Sapphire Ginger Other Egret Jasmine Sunflower Cardinal Nightingale Tanager Total* Sales $ 92,097 $ 42,086 $ 36,818 $ 26,696 $ 25,828 $ 17,875 $ 15,406 $ 7,715 $ 5,200 $ 4,368 $ 2,450 $ 2,000 $ 1,863 $ 1,191 $281,592 % of Total Sales 33% 15% 13% 9% 9% 6% 5% 3% 2% 2% 1% 1% 1% 0% 100% 9
- 10. d. In this folder is a good financial analysis for Family Unity. i. Endowments for nonprofits can be a key issue, so here the analysis shows what is happening. Endowment by Year $1,400,000.00 $1,200,000.00 Amount $1,000,000.00 $800,000.00 $600,000.00 Endowment $400,000.00 $200,000.00 $0.00 2009 2010 2011 Year ii. P&L or Activity is always relevant, so the trends of expenses to revenue is shown: Income & Expense Comparison by Year $2,500,000.00 Amount $2,000,000.00 $1,500,000.00 Income $1,000,000.00 Expenses $500,000.00 $0.00 2009 2010 2011 Year 1. Clearly this chart shows the weakening operating position. 10
- 11. iii. The assets strength can be relevant as shown in this chart. Growth of Assets $4,000,000 $3,624,049 $3,483,438 $3,500,000 $3,611,003 $3,388,368 $3,555,621 $3,258,539 Amount $3,000,000 $2,500,000 $2,000,000 Total Assets $1,500,000 Total Liabilities $1,000,000 Net Assets $500,000 2008 $297,082 $222,635 $140,611 $- 2009 2010 Year 1. That liabilities are growing and the assets declining is a problem 2. But liability growth is consistent with the lack of cash flow from current activities as shown by P&L. e. Many times the ability to do analysis is limited due to available financial information. i. The key is to do the best with what has been given. ii. The lack of financial information will need to be both a Weakness and a Threat. iii. This kind of analysis with what is given can highlight the importance of financial information. f. Industry information should be added to the financial analysis. i. There are several sources of financial information for the industry. ii. Using industry benchmarks is the equivalent to having best practices in the financial analysis section. 11
- 12. g. Financial analysis can be presented in the form of charts. i. Under the Modeling course, lecture 5 is on presenting financial analysis. Only a brief summary is used here. ii. Charts help get the picture of trends. Income Trend $2,500,000 $2,000,000 Dollar Amount $1,500,000 Revenues $1,000,000 Cost of Sales $500,000 Gross Profits Net Income $2005 2006 2007 $(500,000) Year iii. Charts can help see the rations. Income Trend Analysis 151% 150% Percentage 125% 100% 102% 100% Revenues 75% 65% 50% 50% 27% 25% 27% Cost of Sales Gross Profits 0% 2005 2006 2007 Year Review and take the Quiz 12