The outbreak of COVID-19 epidemic has severely impacted the catering, entertainment, transportation, tourism and other industries. When enterprises, especially small and medium-sized enterprises, delay the resumption of work for a long time, the break of cash flow often becomes the "last straw to crush camels".

under the epidemic situation, how to re-examine the cash flow of enterprises? Professor Tamia Liu believes that profits always reflect the past of enterprises, investors invest in the future of enterprises, and enterprises should strive to pursue free cash flow.

11 cash flow is the financial result of enterprise operation

cash flow is the result of enterprise operation, and healthy cash flow is the embodiment of mature enterprise operation ability. Professor Tamia Liu believes that the core goal of an enterprise is to realize enterprise value, including customer value, employee value, shareholder value and social value. From the financial point of view, corporate cash flow can be divided into three categories: cash flow from operating activities, cash flow from investment activities and cash flow from financing activities.

so, what is the cash flow status of SMEs under the epidemic situation? According to the report of 995 small and medium-sized enterprises surveyed by Tsinghua Peking University (Zhu Wuxiang, etc.), 34% of the enterprises' cash flow can't last for 1 months, and 61% of the enterprises' cash flow can't last for 3 months. When the cash flow is abnormal, 22.43% enterprises choose to reduce staff and pay, 21.23% enterprises choose loans, 13.58% enterprises choose shareholders to increase capital, 11.16% enterprises choose private loans, and 16.2% enterprises choose to stop production and go out of business.

Mr. Cao Dewang, the founder of Fuyao Glass, said in an interview with the media, "It's the enterprise's own problem that won't last for three months. It's boring to tell the country." Professor Tamia Liu said that although the words are cruel but calm, the enterprise itself is a profit-making organization. When there is a problem with cash flow, we should re-examine the problems existing in the normal operation of the enterprise.

how to re-examine the cash flow of enterprises in 12 epidemic situation

It is cash flow and cost management that determine whether enterprises can survive the cold winter of epidemic situation now, and it is the value of enterprises that determines which enterprises can embrace spring after the cold winter. Valuable enterprises can not only follow the environment immediately, but also lock in the needs of customers in advance. Professor Tamia Liu then gave a detailed explanation with six classic cases.

Case 1: Take Costco as an example

What kind of enterprise can have a steady stream of healthy cash flow?

The market is ever-changing. Professor Tamia Liu believes that the constant is the customer's demand for quality products and services. Compared with the purchase volume of Wal-Mart's million+categories, costco is preferred to 4,111. "If you don't see the consumer goods in your home in costco, it means that it is out of date."

By tracking consumers' preferences with big data, costco has locked in a membership fee of 91 million RMB in advance, and the renewal rate of customers is as high as 91%. In addition, there are no accounts receivable in the C-end business, and the inventory turnover days are only 31 days (far less than those of online retail giants such as Wal-Mart, Amazon and JD.COM). Therefore, although the gross profit margin is only 11%, costco still created a profit of 3.7 billion in 2119, which is 3.7 billion in cash flow.

Case 2: Take Wal-Mart as an example

Retained income is the safest source of capital, and it does not need to be returned or interest?

Professor Tamia Liu said that this conclusion has a prerequisite, that is, to ensure the maximization of shareholder value.

In the past five years, Wal-Mart distributed 1/3 of its profits to shareholders, and 1/3 of its shares were repurchased as equity incentives for its employees. Even though it was suppressed by its competitor Amazon in 2118, Wal-Mart still distributed 6 billion from the profit of 6.6 billion dollars in that year.

At present, the U.S. stock has repeatedly triggered the fuse, but Wal-Mart's stock is still rising, not only because the profit in 2119 was 1 times higher than that in 2118, but also because it still guaranteed the maximum shareholder value in difficult times and won the heartfelt follow-up of shareholders.

Case 3: Take Amazon as an example

Do you want to do a strategy that takes a long time to show results?

Amazon has invested 1.2% of its R&D intensity to build the AWS cloud service provider with the largest cloud share in the global market. In the process of increasing revenue, the additional working capital is negative all the year round and shows a downward trend, thus creating free cash flow.

as Bezos said, long-term free cash flow creates enterprise value. After the monopoly of the cloud market was low in 2115, Amazon's share price soared. Even in today's epidemic, Amazon still needs to expand its enrollment by one million employees.

profits reflect history, and stock prices reflect the future. enterprises must ensure a steady stream of free cash flow in their business activities before they can freely build their ecology and future.

Case 4: Take Tesla as an example

Is it difficult for long-term loss-making enterprises to get financing?

in 2119, the Shanghai government provided a subsidy of about RMB 591 million to Tesla's Shanghai factory, including more than RMB 311 million in cash. The Shanghai branch of several banks "gave" loans of * * * 19.75 billion yuan.

Although Tesla suffered long-term losses during 2111-2119, it has been continuously developing battery and electronic control technology, connecting with the China market to release its production capacity, and achieved positive operating cash flow after 2118.

in the long run, Tesla is valuable and always represents the direction of new energy vehicles and the future of making cars. So the bank gave him a loan and the government subsidized him.

Case 5: Take Fuyao Glass as an example

Don't put eggs in one basket. Diversification of business will reduce the risk?

Fuyao Glass has long focused on the automobile glass industry with heavy assets and high debts, and invested all its resources in the manufacturing industry with long payback period, becoming a global automobile glass giant.

Professor Tamia Liu thinks that the success of Fuyao Glass lies in "concentration", so he puts forward a "ten-dimensional analysis model" to study the financial statements of Fuyao Glass. Steady, 31-year-old car glass and sufficient free cash flow will eventually enable Fuyao Group to achieve a gross profit margin of 41%, a net interest rate of 17% and a return on net assets of 21%.

Case 6: Take Ford as an example

Are employees a cost? Is it a cash outflow?

when there is a problem in the capital chain, enterprises often prefer to reduce staff and pay. However, Professor Tamia Liu believes that this is only one of the coping methods, but it is by no means the only solution. Because the temperature, quality management and product advantages of an enterprise depend on employees, the value of employees is related to customer value, and whether the assets of an enterprise are effective depends on the efficiency of employees.

At the beginning of the last century, the automobile giant Ford Company distributed a profit of $28 million to its employees for a salary increase, which not only improved the efficiency of employees by 41%, but also improved the automobile production capacity and reduced the cost and price, and also turned employees into customers, thus ensuring Ford's future.

The epidemic situation in COVID-19 has caused the industry to press the "pause button". Can the epidemic situation turn the industry around in one fell swoop? Professor Tamia Liu shared that, according to the survey data of Sky Eye, from October 1 to February 7, 2121, more than 3,111 enterprises across the country have added "masks, protective clothing, disinfectant, thermometers, medical devices" and other businesses.

Professor Tamia Liu suggested that a valuable and sustainable enterprise must not compete for business in the current environment.

how can enterprises seize the opportunity to create value after the 13 epidemic?

there have never been great enterprises, only enterprises of the times. Professor Tamia Liu believes that in today's changeable world, just because your products make money today doesn't mean they will be popular tomorrow.

Professor Tamia Liu suggested that enterprises should first recognize the characteristics of the present era: compound interest of science and technology is reshaping the world. The world is changing very fast. The new technology of ABCD+5G has enabled us to move from the consumer Internet to the industrial Internet, from the era of people-to-people connection to an era of Internet of Everything, and to a digital era, which is reshaping the world.

This epidemic has caused the interpersonal contact in the physical world to be reduced to the extreme, and the "digital survival state" came into being. Many enterprises have developed a set of "contactless" digital market operation system under active or passive conditions. In the digital age, customer groups are changing greatly. Professor Tamia Liu suggested that enterprises should grasp three major trends:

1. The era of consumption upgrading is accelerating. Driven by three trends, the new consumption wave accelerates the iteration of the industry: from having more to having better; From functional satisfaction to emotional satisfaction; From physical high price to psychological premium.

2. The global trade competition pattern is abrupt. The global trade structure and the redistribution of science and technology are undergoing fundamental structural changes. China must pay attention to higher-quality development to meet the arrival of the era of consumption upgrading in China.

3. Change should be made at a good time. Only in good times can we have the trial and error cost of change, and enterprises should grow strategically. The second curve+ecological layout is the future of enterprises, which is the characteristic of strategy in the digital age. What is more important in this crisis is the "layout of the visible future" of valuable enterprises.

Finally, Professor Tamia Liu gave three prescriptions for enterprises:

1. Change the mode of thinking. When entrepreneurs encounter difficulties, the usual methods are to reduce inventory, lay off employees and reduce costs, and reduce investment and research and development, hoping to get through it, but now it can't.

2. Improve efficiency and optimize cost. Mature Internet technology will penetrate into the industry, and its production, trading, financing, circulation and other links will be upgraded, thus forming an extremely rich new scene, greatly improving the efficiency of resource allocation.

3. Fear cash and expand cautiously. With the continuous economic downturn, deleveraging and the policy orientation of eliminating zombie enterprises, as individuals or enterprises, there is less impulse to run blindly, more craftsman spirit and fear the market.

Finally, Professor Tamia Liu sent a message: Don't chase a horse. Use the time of chasing horses to plant grass. When bloom is warm in spring, there will be a number of fine horses for you to choose from.

-a written record of Tamia Liu's open class.