INVEST LIKE AN INVESTOR - william eastman

...in "Core Assets"

​PROFIT RADIO "A Network of Entrepreneurs for Entrepreneurs"

Introduction
One theme consistent in Season 3 is the station's becoming your CGO - Chief Growth Officer for Hire, the underlying role of the Network. All of my shows: Growth Community, Building in Front of You, Your MLM Empire, Economics for Owners, the Self Managing Organization, and Creating a Consulting Business - everything centers on how to use the IBGR Network for business success.  This show is different - I am looking at the life and how can I manage this and many other businesses if "I AM LIVING THE LIFE"?

​Our relationship with the listening audience of entrepreneurs and owners: 

• Provide INSIGHTS that are useful
• Provide TOOLS that work
• Provide RESOURCES that saves time and money
• Make a FINANCIAL impact on the business 

That is what is meant by Looking at IBGR as your CGO - your virtual Chief Growth Officer.

Last week we tackled "Exponential Growth". This week shifts the conversation to making the right investment decisions.

LISTEN > ENGAGE > APPLY

Objectives - The WHY
The answer to the why is simple, if you didn't own it would you invest in it? This show is from deep in the archives of my years doing turnarounds and how we would run the business in preparation to sale.

Key Issues - Owner Perspective:​

1. Where do I invest in the business?
2. How do I measure it's return?

What You Need to Know - The WHAT​
Revenue
The amount of money the company collects based on selling its offer. It is usually referred to as Top Line and comes from

• Revenue from Sales:  often referred to as the “top line” because it sits at the top of the income statement, income generated before any expenses are subtracted from the calculation;
• Revenue from Invested Capital: revenue from investments made by the company, a calculation used to assess a company's efficiency at allocating the capital under its control to profitable investments. The return on invested capital ratio gives a sense of how well a company is using its money to generate returns;

to determine the total amount of money collected during a period, which is usually defined as a quarter (three calendar months or 13 weeks) or a year. 

Earnings
The amount of money the company keeps after all expenses, taxes, etc., have been paid. Starting with Revenue, you subtract

• Production Costs (materials, labor, overhead)
• Selling Costs (cost of sales)
• Taxes (federal, state, local)

to determine the amount of profit produced during a specific period, which is usually defined as a quarter (three calendar months or 13 weeks) or a year. 

Net Investment
​The amount of the money the company retains for reinvestment in improvements and growth. It is based on

• Working Capital (inventory, accounts receivable, cash, liabilities)
• Permanent Investment (investors)
• Funded Debt (current debt)

to indicate how much a company is spending to maintain and improve its operations. If net investment is positive, the company is expanding its capacity.

If net investment is negative, its capacity is shrinking.

This is a more sophisticated way at looking at the traditional
Assets - Liabilities = Retained Earnings measure of company performance over a specified period usually defined as a quarter (three calendar months or 13 weeks) or a year.
​
What You Need to Do​​ - The HOW
The complex reflection of all activities of every individual everyday of the period being measured.

• ROI = Earnings as % of Sales X Turnover
  • Earnings as % of sales = Earnings / Sales
    • Sales - Costs
      • Costs = Production + Selling +Admin + Income Taxes
  • Turnover = Sales / Net investment
    • Net Investment = Working Capital + Permanent Investment - Funded Debt
      • Working Capital = Inventory + Accounts Receivable + Cash - Liabilities

We are your single, one stop source for business success, period, end of story.

1. ​Listen to the #owrlife Series 
2. JOIN the Community of Commerce - A Network of Entrepreneurs for Entrepreneurs
3. Show Up Next week

Make sure you leave some thoughts in the comment section below. I am interested in continuing the conversation.

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