FinSim IS TM - Perth's Unique Behavioral Proforma®
What is a Behavioral Proforma®?
A Behavioral Proforma®is an interactive product which simulates the real-life performance o
f an individual or a team as reflected in an income statement based on their behavioral characteristics. In the case of FinSim IS™ the behavioral characteristics being modeled by the simulation are the Financial Signature® of an individual or a team
that has completed Perth’s Financial Outcome Assessment®. The simulator predicts the income statement that will result from the operational performance of the individual or team whose Financial Signature® has been assessed
What is FinSim IS™?
FinSim IS™ stands for Financial Signature Simulator for Income Statements. It is a unique and highly innovative approach to leadership development by linking a leader’s behavior directly to financial performance. FinSim IS™ allows an individual’s or a team’s impact on an income statement to be forecasted just based on the Financial Signature® of that individual or team. The simulator is designed to be used post-assessment, as an aid to show someone who has been assessed how their Financial Signature® will impact their financial performance.
What Will FinSim IS™ Forecast?
The model will predict for any Financial Signature® the following performance:
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Gross margin
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COGS
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Expenses
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Profitability
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Valuation
It will show this in the form of an actual income statement. Included in the results is an estimate of the valuation of the company so that the model can also be used for M&A purposes and for the purposes of forecasting stock prices.
FinSim IS™ comes as a series of interactive models, each designed to be used in a specific industry. The reason that it is designed this way arises from the fact that a company’s financial metrics are largely dependent on the industry it participates in. Every industry has a characteristic gross margin and expenses level. In the case of a financial industry there will be characteristic levels of interest revenues and expense. These also impact valuations where companies have characteristic levels of profitability and valuation levels.
The model is designed around average levels of metrics for a given industry. For each industry the model contains this average and associated ranges for a particular metric to take into account variation within the industry. The predicted financial performance is therefore tied to these averages and ranges. The ranges are designed to cover the expected ranges for companies in the industry varying from the performance of a Marketmaker down to the level of an Industrialist.
Using FinSim IS™
FinSim™ is designed for use in the following situations:
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With team development programs, to show the actual financial ramifications associated with the behaviors of a team
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With individual coaching programs, to show financial performance associated with individual behaviors
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In onboarding, to help prepare new hires or new promotees for their new situation and to show them how they can improve their performance
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With board programs, to show them the desired behaviors for a new CEO and how to link their performance with enterprise valuation objectives
- For Management Due Diligence for private equity companies and portfolios, to predict the likely financial impact of a new CEO and management team
An Integrated Leadership Approach
FinSim™ is designed for use within the Perth family of products. These include its unique assessments, its integrated training and coaching, and its financial statement behavioral simulators. All of these are unique in the industry. They are designed to provide totally new insights and new ways of thinking about management, financial performance and competitive success.