# Help I m Overwhelmed

## Help! I ‚ m Overwhelmed!

All of this discussion about ratios can seem daunting, but don ‚ t get discouraged. As a WLP professional and former mathematics teacher pointed out to me, all her math students became discouraged about midway through the school year. They also felt better about what they were learning as time went on and they became more comfortable and confident. The important thing is not to give up. Familiarity, comfort , and confidence with ratios and financial statements make all the difference in helping your audience understand your value.

## Examples of Asset Financial Value Chains

How can you use this information about balance sheets and ratios to communicate your value? To see how assets break into cascading measures through an organization and how those measures can be translated into value chains, take a look at figure 5-6. To help draw a visual link from the financial value chain to WLP interventions, the financial value chains have possible WLP interventions depicted.

Figure 5-6: Asset measure and sample financial value chain.

In the top half of figure 5-6, starting on the left-hand side, are examples of asset measures for each type of audience, ending on the right with examples of WLP interventions that may improve those measures. The closer you get to the Individual level of your audience, the longer and more varied the list of possible measures and interventions becomes. The list of measures and possible interventions in this example are not restricted to what ABC MediCompany might use and are by no means exhaustive in covering every type of organization in every industry.

In figure 5-6, examples of current and long- term asset measures are combined. The interesting thing to note is that although the terms have changed at the Senior or possibly the Mid-level, many of the same measures can appear for the 1st/Ops and Individual audiences as were on the income statement.

 Important ‚ The same intervention can sometimes positively affect profit, position, and cash all at the same time. You can keep your value communication fresh and more powerful by understanding how to point out the impact of your interventions in terms of more than one financial statement.

The sample asset-based value chain in figure 5-6 selects current assets as the Senior-level measure and AR as the Mid-level measure. To help with monthly and weekly collections, employees are receiving training and reinforcement coaching in effective telephone techniques when asking for payment.

## Examples of Liability Financial Value Chains

A similar set of measures and a sample financial value chain are shown on figure 5-7.

Figure 5-7: Liability measures and sample financial value chain.

In this case, administrative assistants are required to attend monthly lunch -and-learn sessions. The cost of these sessions is being questioned. The value of the sessions is being linked to a number of profit, position, and cash measures. This sample value chain lists just one: helping to control the expenses for office supplies . In reality, any number of chains could be drawn to show how a WLP professional helps to reduce current liabilities such as the expenses in accounts payable. Chains could also be drawn to show how a WLP intervention reduces the need for short- or long- term debt by cutting costs, conserving cash, or generating additional revenue that could be used to fund expenses without the need for more debt.

 Important ‚ Because ratios compare such items as assets, liabilities, equity, revenue, costs, and profit, you can also point out how any of the financial value chains improve the ratios that the Senior executive measures are a part of.