SABER INDUSTRIES, INC

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Finance and AccoutningforEngineers

• MT 251
• Vanderbilt University
• School of Engineering
• David A. Berezov, CPA MBA
• Adjunct Professor of Management of Technology

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• Saber Industries, Inc.
• David A. Berezov
• President

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SABER C-250
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SABER C-250
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SABER C-550
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SABER C-550
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SABER C-550
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SABER C-1200
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SABER C-1200
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SABER C-2200
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SABER C-800TT
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SABER C-1200TT
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SABER C-1200TT
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SABER C-1200TT
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SABER C-1200TT
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SABER RB-550
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SABER WIDE BELT C-1200
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SABER WIDE BELT
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SABER WIDE BELT
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SABER CVF-1200
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SABER WIDE MACHINE
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SABER WIDE MACHINE
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SABER WIDE BELT C-1200
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Finance and AccoutningforEngineers

• MT 251
• Vanderbilt University
• School of Engineering
• David A. Berezov, CPA MBA
• Adjunct Professor of Management of Technology

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Course Description

• Topics are studied from the perspective of
  Engineering Professionals working in business
  organizations

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Topics Covered

• Time Value of Money
• Capital Budgeting
• Capital Formation
• Financial Accounting and Reporting
• Performance Measurements
• Working Capital Management

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Course Objectives

• Develop an understanding of what is required for
  an otherwise successful engineering project to be
  considered a financial success.
• Develop an understanding of what is required for
  business enterprises undertaking such projects to
  be considered financially successful.

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The Problem

• Why do some finance and accounting managers say,
  The Engineers just dont get it ?
• Why do some engineers refer to business skills as
  Soft Skills?

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A Question of Context ?

• The Value 111, is it one hundred eleven,
  seven or two hundred seventy three
• (decimal, binary or hex)
• We shipped 12,000 product this month and
  collected payments of 8,000, What are our
  Sales for the month, 12,000 or 8,000 ?
• (accrual method or cash method )

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Even the hand calculators are loaded with
different functions

• Engineering calculators Sin, Cos, Tan, Pi, Log,
  Deg, Rad
• Financial Calculators
• PV Present Value
• FV future value
• IRR Internal rate of return
• PMT Payment
• I Interest rate

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• Finance and Accounting for Engineers views
  individual projects and businesses as though they
  were machines.

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SimpleBusiness Machines

• Projects are viewed as machines fueled by
  capital, operated over time and producing a
  measurable output. We start with the time value
  of money as applied to simple cash flows
  including future sums, annuities and
  perpetuities. We then investigate the more
  complex cash flows engineered in the capital
  budgeting process, and introduce the element of
  risk.

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Whats the FV of an initial 100 after 3 years if
i 10?
0
1
2
3
10
FV ?
100
Finding FVs (moving to the right on a time line)
is called compounding.
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After 1 year
FV1 PV INT1 PV PV (i) PV(1 i)
100(1.10) 110.00.
After 2 years
FV2 PV(1 i)2 100(1.10)2 121.00.
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After 3 years
FV3 PV(1 i)3 100(1.10)3 133.10.
In general,
FVn PV(1 i)n.
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Complex Machines

• Simple cash flows are expanded to complex
  business enterprises. We review the basics of
  financial accounting and reporting with the goal
  of teaching the engineer the language of the
  financial community. With the terminology in
  hand, we look at inventory and its relation to
  product development activities

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Performance Measurements

• We then look at performance measurements for
  business enterprises with the goal of learning
  what is normal, extraordinary and troublesome for
  various types of businesses.

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Capital Fuel For Financial Machines

• Debt Capital
• Equity Capital
• Cost of Capital
• Financial Leverage

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Financings

• Corporate Bond issues
• Municipal Bond Issues
• Preferred Stock Issues
• Common Stock Loans
• IPOs
• Construction Loans
• Working Capital Loans

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Working Capital

• We examine the day to day aspects of working
  capital management. The objective is to
  understand how business growth and contraction
  affect the firms cash position.

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Taxation

• Federal Corporate Income Taxation
• Federal Personal Income Taxation
• Federal Estate and Gift Taxation
• State Income Taxation
• Local and State Business Taxes
• Sales taxes
• Property taxes
• Personalty Taxes

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Informed Interviewees

• Information on firms interviewing students
• Annual Reports
• SEC From 10K
• Proxy Statements

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StatisticsEmployer Firms

• 
  Employees
• Total lt500 500
  
• Firms 5.6M 5.6M 16.7K
  
• Emp. 110.7M 55.7M 55.0M
• Receipts 18.2T 7.5T 10.7T
  

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