Financial AvenuesMoney is a measurement to which Performance Avenues can be applied to create critical conversations about how an organization is doing and how it can improve. Review and discuss the financial performance of your people, your teams and your company using this Financial Avenues tool. For example, are you leading with your capital and managing with your margins? What's happening now and what will happen in the future with your capital, ROI, leverage, profit margins and revenue?
>>> Leading with CapitalCompanies lead by strategically and effectively directing their hard and soft assets including people, capabilities, intellectual property, brands, real estate, equipment, and relationships. How do we invest our financial resources -- equity, debt and working capital -- to take advantage of the best opportunities to fulfill our company's mission and generate the highest income in a fast changing world? What are the right businesses and models for our company?
How well is our company leading with its capital?
>>> Learning with Return on InvestmentCompanies learn how well they are doing from the various ways they determine and compare their Return (s) on Investment of assets, equity and sales. These are measurements of capital investment strategies and operational plans and must include accurate and complete income, costs, assets and liabilities. ROI's are critical results that show trends and speak to the current success and long-term sustainability of the company. Dig into and learn from the right numbers.
How well is our company learning from its Return on Investment?
>>> Innovating with LeverageCompanies innovate and grow not by speculation, but by assuming well-measured risk -- in addition to the inherent risk their business is already managing. The leverage of newly earned capital and debt while maintaining a low debt to equity ratio, especially for a company that has a low volatility of variable costs, spurs profitable new ventures and a competitive edge. Thoughtful leveraging fosters an environment where innovation is much more likely to flourish.
How well is our company innovating with risk-measured leverage?
>>> >>> Managing with Profit MarginsCompanies manage by planning for profit -- that is, by devising and monitoring systems that control and lower costs while optimally pricing their goods and services. A company's profit margin is simply the amount of net income per the amount of revenue in any given time period. When all company operations are constantly focused on what affect initiatives and decisions have on profits, quality earnings and operating margins expand at a commensurate rate.
How well is our company managing for higher profit margins?
>>> >>> Promoting with RevenueCompanies that promote effectively will generate more revenue that can, if costs are contained, contribute significantly and sustainably to profit margins. Marketing budgets, incentives for sales people, sales programs, and discounting all need to be looked at to see how revenue can be increased with greater penetration and market share. It's profitable to invest in collecting and measuring data on current and new markets and on a range of customer responses.
How well is our company promoting with increased revenue in mind?