Questions for Analyzing Your Balance Sheet Items

1.      How well does your capital structure conform to the matching principle between your assets and liabilities/capital?

2.      How optimal is your capital structure in terms of your WACC?

3.      How optimal is the amount of cash in your bank accounts in terms of risk/return?

4.      How solid is your cash management methodology?

5.      How efficient is your cash management process?

6.      How efficient are your cash management tools?

7.      How competent is your cash management personnel?

8.      How optimal is your cash/equivalents (marketable securities) ratio?

9.      How optimal is your marketable securities portfolio (in terms of risk/return)?

10.  How optimal is your balance between cash/credit/prepayment sales?

11.  How optimal is your portfolio of accounts receivable (in terms of duration)?

12.  How efficient is your system for performing customer credit checks?

13.  How efficient is your system for calculating credit scores?

14.  How comprehensive is your customer database?

15.  How solid is your A/R management methodology?

16.  How efficient is your A/R management process?

17.  How efficient are your A/R management tools?

18.  How competent is your A/R management personnel?

19.  How competent is your A/R collection agency?

20.  How efficient are your relationships with your A/R collection agency?

21.  How solid is your inventory management methodology?

22.  How optimal is your methodology for inventory costs allocation?

23.  How efficient is your inventory management process?

24.  How competent is your inventory management personnel?

25.  How efficient are your inventory management tools?

26.  How competent is your inventory management personnel?

27.  How efficient is your method and process for evaluating prepayment/purchase on credit choice?

28.  How efficient is your Short-Term Notes Payable management system?

29.  How efficient is your system for maximizing financial value of your PPE (equipment, buildings and land)?

30.  How optimal are your depreciation and amortization schedules from tax benefits standpoint?

31.  How efficient is your system for putting together (determining terms and conditions) of your long-term notes receivable?

32.  How efficient is your system for monitoring and managing your long-term notes receivable?

33.  How efficient are your long-term investments from operational standpoint?

34.  How solid is your A/P management methodology?

35.  How efficient is your A/P management process?

36.  How efficient are your A/P management tools?

37.  How competent is your A/P management personnel?

38.  How solid is your methodology for estimating your employee pension funding?

39.  How efficient is your process for estimating your employee pension funding?

40.  How solid are your tools for estimating your employee pension funding?

41.  How competent are your actuaries?

42.  How efficient is our employee benefit system in terms of generating an incremental financial value compared to motivation system that includes no benefits?

43.  How much incremental financial value does each new benefit add?

44.  How optimal is your equity structure (in terms of various types of securities)?

45.  How optimal are terms, conditions and other features of each security issue?

46.  How efficient are your procedures for dealing with your treasury stock?