East West Bancorp, Inc. · NASDAQ:EWBC
East West Bancorp — Investor Presentation (June 2016)
21 slides from East West Bancorp's investor presentation, June 2016
Slide 1: Managing Cash Flow
Managing Cash Flow
Slide 2: Pre-Test
Pre-Test • Locate the Pre- and Post-Test Form at the back of your workbook. • Complete the BEFORE Training column to assess your knowledge on this topic before participating in this class. MANAGING CASH FLOW 2
Slide 3: Agenda
Agenda • Welcome, Pre-Test, Agenda, and Learning Objectives • Introductions • Case Study: Bob and The Wired Cup • The Opening Balance Sheet • Three Views of Cash Flow • What Can Bob Do? • Summary, Post-Test, and Evaluation MANAGING CASH FLOW 3
Slide 4: Learning Objectives
Learning Objectives • Describe the purpose of cash flow management in a start-up small business. • Assess a cash flow cycle and make some cash flow projections. • Describe how a cash flow statement can help assess and improve the financial health of a start-up. Continued … MANAGING CASH FLOW 4
Slide 5: Learning Objectives, cont.
Learning Objectives, cont. • Identify some ways to manage cash flow in terms of managing costs and potential income. • Identify ways to seek out expert technical assistance to improve cash flow management. MANAGING CASH FLOW 5
Slide 6: Introducing Bob and The Wired Cup
Introducing Bob and The Wired Cup Bob’s case begins on page 4 in your workbook. • The Wired Cup café has had a great start. • Bob faces some cash flow issues and needs to juggle his The Wired priorities. Cup • The good news: Bob is thinking ahead and he has great advisors: you! MANAGING CASH FLOW 6
Slide 7: Introductions: Where are you on the cash flow continuum?
Introductions: Where are you on the cash flow continuum? Intermediate: I know I’m an expert (and Beginner some, still have still have questions) questions Cash Flow Continuum MANAGING CASH FLOW 7
Slide 8: Opening Balance Sheet for The Wired Cup
Opening Current Assets: Assets Current Liabilities: Liabilities Cash $ 5,000 Bank Note $ 3,371 Balance Accounts Receivable $ - Accounts Payable $ - Pre-Opening Expenses Sheet for Accounting $ 250 Long Term Liabilities: $ 16,629 Advertising $ 500 The Wired Bank Charges $ 350 Total Liabilities $ 20,00
Slide 9: A Few Notes About Debt
A Few Notes About Debt • It takes effort to obtain a small business loan. • Your credit score will directly influence your ability to secure a loan. • Talk with a bank’s commercial loan officer before you need the loan. • Avoid using credit cards to finance your business. • Other modules in this Mon
Slide 10: Opening Balance Sheet for The Wired Cup
Opening Current Assets: Assets Current Liabilities: Liabilities Cash $ 5,000 Bank Note $ 3,371 Balance Accounts Receivable $ - Accounts Payable $ - Pre-Opening Expenses Sheet for Accounting $ 250 Long Term Liabilities: $ 16,629 Advertising $ 500 The Wired Bank Charges $ 350 Total Liabilities $ 20,00
Slide 11: Three Views of Cash Flow
Three Views of Cash Flow • Cash Conversion Cycle • Cash Flow Diagram • Cash Flow Statement MANAGING CASH FLOW 11
Slide 12: Cash Conversion Cycle
Cash Conversion Cycle Business pays for raw materials Business Business sells makes product product MANAGING CASH FLOW 12
Slide 13: Cash Flow Diagram
Cash Flow Diagram Page 7 in your workbook This diagram has been adapted from a diagram designed by George M. Dawson and illustrated by Buck Dawson, 1995. MANAGING CASH FLOW 13
Slide 14: The Wired Cup Cash Flow Statement
The Wired Cup Cash Flow Statement Page 10 in your workbook. This statement tells a story: • How much money Bob has to run his business. • How much money is moving in and out of The Wired Cup. • Where the money is coming from and where it is going. • When that money is moving in and out of the busine
Slide 15: What Can Bob Do?
What Can Bob Do? Group Discussion: • How can Bob increase sales revenue at The Wired Cup? • How could Bob negotiate a better deal with his vendors and suppliers? • How can Bob plan for seasonal ups and downs? • Is it wise for Bob to use a credit card to offset cash flow issues? • What do YOU recomme
Slide 16: Possible Ideas for Bob
Possible Ideas for Bob Increase revenue • Provide incentives for customers to pay in cash • Start catering • Sell gift cards • Increase number of corporate accounts Negotiate with vendors and suppliers • Ask for better terms or payment plans • Landlord: pay entire year’s rent in 10 months not 12 Red
Slide 17: What NOT to Do
What NOT to Do • Do not postpone paying estimated taxes • Do not hide from loan officers – they can provide invaluable advice • Do not pay vendors late (they can cut off supply) • Do not overestimate revenue • Do not underestimate costs MANAGING CASH FLOW 17
Slide 18: It Is Professional to Ask for Help
It Is Professional to Ask for Help Ask for advice and feedback: • Seek out expert technical assistance. • An accountant can help find ways to increase income and reduce expenditures. • Share ideas with other businesses to find ways to both compete and cooperate (co-opetition!) MANAGING CASH FLOW 18
Slide 19: Key Points to Remember
Key Points to Remember 1. Managing cash flow is a core competency of small business ownership. 2. An opening balance sheet tells a compelling story. 3. A cash flow statement continues the story. Use it to monitor projected and actual income and expenses. 4. Plan for seasonal fluctuations. 5. Try to
Slide 20: Toolkit of Resources
Toolkit of Resources See the Toolkit of Resources in your workbook for • Glossary of Cash Flow Terms more details. • Cash Flow Statement Template • Negotiating Better Terms • For More Information: technical assistance options – many of these are free! MANAGING CASH FLOW 20
Slide 21: Pre-Post Test and Evaluation
Pre-Post Test and Evaluation • If you have not already done so, assess what your knowledge on this topic was before you participated in this class. • Assess your knowledge on this topic after taking this class. • Complete the Evaluation Form. Your feedback is helpful! • Return both forms to the inst
East West Bancorp — Investor Presentation (June 2016) on 6ix