Assess the ability of your business to generate more cash, calculate its cash runway and understand its return on equity

Mettle Corporate & Specialised Finance

* We do not save a copy of your results, should you like to discuss them with us, please be sure to print this screen to keep a record of it.

INPUT AREA:

KEY: Mettle Corporate & Specialised Finance

The forecasts assume that revenue and expenditure is earned and incurred evenly throughout the year and do not take account of seasonality. They also do not take major asset acquisitions, borrowings or corporate transactions into account.

Income Statement

Balance Sheet

Cash Generation Management

Monthly Cash Flow

MANAGE CASH GENERATION

The following demonstrates the impact that changes in inventory, debtors and creditors can have on the ability of a business to generate cash. This result is calculated using the inputs in the Cash Generation Management cells above. The result is the difference between the before and after positions.

MONTHLY CASH RUNWAY CALCULATOR:

RETURN ON EQUITY CALCULATOR (Du Pont Analysis):

Net Profit / Revenue = Margin

Revenue / Total Assets = Asset Return

Total Assets / Equity = Leverage

Margin x Asset Turnover x Leverage = Return on Equity



The Du Pont Analysis uses a company's income statement and balance sheet to assess its ability to generate shareholder return through asset efficiency, margin and leverage. Significant asset purchases, corporate actions, or other significant changes in a year can distort this analysis. One can use average assets and shareholders' equity to mitigate this distortion. However, this adjustment assumes that balance sheet changes occur steadily throughout the year, which may in itself lead to distortion.

Returns on equity vary significantly between countries and industries and should be relatively compared. Generally speaking, higher returns on equity indicate better financial management. However, the underlying reasons should be investigated such as variability of income and debt levels. In South Africa, a return of equity of at least 20% is expected with returns below 10% considered poor.

* We do not save a copy of your results, should you like to discuss them with us, please be sure to print this screen to keep a record of it.