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Chapter Eight: Financial Analysis

Chapter Eight: Financial Analysis

Brief Chapter Outline

I. Learning Objectives (text page 137)

.

 Describe the importance of solid financial foundation in entrepreneurial business.

 Discuss techniques for measuring performance.

 Explain ratio analysis.

 Explain deviation analysis.

 Explain sensitivity analysis.

 Describe the use of short surveys in business.

 Analyze the importance of having a measurement focus.

II. Importance of a Solid Financial Foundation in an Entrepreneurial Business (text page 138)

 Learning Objective 8-1: Describe the importance of solid financial foundation in small business.

III. Techniques for Measuring Performance (text pages 138-141)

 Learning Objective 8-2: Discuss techniques for measuring performance.

IV. Ratio Analysis (text pages 141-148)

 Learning Objective 8-3: Explain ratio analysis.

V. Deviation Analysis (text pages 148-149)

 Learning Objective 8-4: Explain deviation analysis.

VI. Sensitivity Analysis (text pages 149-150)

 Learning Objective 8-5: Explain sensitivity analysis

VII. Use of Short Surveys in Business (text pages 150-153)

 Learning Objective 8- 6: Describe the use of short surveys in business

VIII. Importance of Having a Measurement Focus (text pages 153-154)

 Learning Objective 8-7: Analyze the importance of having a measurement focus

IM 8-2

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Chapter Eight: Financial Analysis

IX. For Review (text page 154)

8-3

© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Chapter Eight: Financial Analysis

Chapter Outline and Lecture notes

1. Learning Objectives (text page 137)

 Describe the importance of solid financial foundation in an entrepreneurial business.

 Discuss techniques for measuring performance.

 Explain ratio analysis.

 Explain deviation analysis.

 Explain sensitivity analysis.

 Describe the use of short surveys in business.

 Analyze the importance of having a measurement focus.

2. Financial Foundation

 Learning Objective 8-1: Describe the importance of solid financial foundation in small business

i. Recap evaluation of a firm (text page 138)

1. Starts with the mission of the organization

2. Mission is related to a specific industry where the firm competes

3. Firms develop competitive advantages

ii. Measure the outcomes of a firm at intervals relevant to the business

iii. Evaluate cost savings frequently

iv. Next, examine the metrics that should be used to evaluate the business

3. Techniques for Measuring Performance (text pages 138 through 141)

 Learning Objective 8-2: Discuss techniques for measuring performance

i. Company analysis moves from the general to the specific ii. Four techniques or analytical methods to design and monitor the core metrics of the firm

1. Ratio analysis

2. Deviation analysis

IM 8-4

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Chapter Eight: Financial Analysis

3. Sensitivity analysis

4. Surveys

iii. Recall the study of the balance sheet and income statements to prepare for section 8.3, the Ratio Analysis

4. Ratio Analysis (text pages 141 through 148)

 Learning objective 8-3: Explain ratio analysis

a. Ratio analysis

i. Ratio analysis is a series of ratios along four areas of company performance (liquidity, activity, leverage, profitability) that provides a picture of the health of the company

ii. Tool to examine the overall health of the organization

iii. Small business owners use a combination of the ratios to evaluate the firm

iv. Compare ratios

1. Similar organizations

2. Industry averages

3. Previous performance of the firm

a. Annual

b. Monthly

v. Four categories of ratios

1. Liquidity

2. Activity

3. Leverage

4. Profitability

b. Liquidity ratios

i. Ratios that measure the short-term ability of the firm to meet its obligations

1. Obligations include debt or accounts payable due in the near term

2. Financial industry standards require that ratios be within certain ratios to be considered healthy

3. If ratio falls below the lower bounds of its liquidity level the bank may limit the line of credit to the firm or require a higher interest rate on the debt

IM 8-5

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Chapter Eight: Financial Analysis

a. Indicates the firm is operating at a risk, or the bank considers the ratio to be at a risk level not appropriate to meet the obligations of the note

4. Two ratios used to evaluate if the business can meet their short-term obligations:

a. Current Ratio

i. Current assets divided by current liabilities.

ii. Measures assets than can be quickly turned into cash to pay immediate liabilities or accounts payable

iii. The cash balance of the firm plus inventory divided by all short-term liabilities

b. Quick (Acid) Ratio

i. Current assets minus inventory divided by current liabilities

ii. Removes the ability to sell inventory and examines the pure cash position relative to the current liabilities.

iii. Quick ratio is also known as the acid test

5. Calculating liquidity ratios

a. For this illustration, use the example in figure 8.1 provided on page 140 of the text or provide an example for the class

c. Activity Ratios

i. Ratios that measure the efficiency with which the entrepreneur is handling the resources of the business

ii. A helpful resource to use as the firm develops

iii. Used to evaluate the firm on a monthly basis

1. Inventory turnover

a. Cost of goods sold divided by inventory

b. Cost of goods sold is the direct costs involved with the product

c. As the inventory turnover rises, the firm is closer to a just-in-time system

d Inventory turnover ratio is better than industry average

e. An improvement in this ratio on a monthly basis indicates that the firm is operating at a higher level of efficiency

IM 8-6

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Chapter Eight: Financial Analysis

2. Accounts receivable turnover

a. Credit sales divided by accounts receivable

b. Measures how fast the company turns credit sales into cash

c. Faster turnover indicates the business turns credit sales into cash

i. Indicates a good cash flow

d. Credit sales are evaluated and aged into categories based on how long it has been since the sale

e. The older the debt is the less likely payment will be received

f. Debt less than 30 days will likely be paid to the firm

g. Debt that is 90 days past due may not be recovered

3. Total/Fixed Asset Turnover

a. Net sales divided by fixed assets or net sales divided by total assets

b. Popular evaluation tool

c. Difference depends on whether or not the business has large amounts of fixed assets.

d. Examine the ability to generate sales from the assets employed by the organization

e. As the number increases, the firm is being more efficient

f. New business owners try to minimize the amount of both fixed and total assets in order to conserve cash

4. Calculating activity ratios

a. Calculation requires data from the balance sheet and the income statement

b. From the income statement, use the cost of goods sold number, or the numerator in the calculation

c. From the balance sheet, use the inventory figure, or the denominator in the calculation

d. To demonstrate this calculation, use the numbers and criteria provided in Figure 8.1 and 8.2 in the text.

i. Focus on the change in the numbers

ii. An increase in the inventory turnover rate indicates that the firm is operating at a greater rate of efficiency

IM 8-7

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Chapter Eight: Financial Analysis

iii. If the firm is new, an increase in this calculation might reveal that the new firm is gaining experience

iv. The firm may have gained a competitive advantage

v. Identify the competitive advantage

vi. Obtain industry data relative to the industry turnover rates

d. Leverage ratios

i. Ratios that are used to examine the relative level of indebtedness of the entrepreneurial business

ii. Three ratios evaluate the level of indebtedness of a business

1. Debt-to-Equity

a. Ratio provides data about the portion of the business owned by lenders versus the portion of business owned by the owner or founder of the business

i. Total liabilities divided by total assets minus total liabilities

2. Debt-to-Assets

a. Measures the percentage of the assets of the firm that are actually owned by creditors

b. Total liabilities divided by total assets

3. Times Interest Earned

a. Figure estimates the number of times that the firm could repay the current interest owed on its debts.

b. Higher number indicates the firm is more capable of servicing its debt load

c. Operating income divided by the interest

iii. Calculating leverage ratios

1. Refer to the balance sheet illustrated in Figure 8.1 on page 140 of the text to provide example about how to calculate the leverage ratios

2. Refer to the income statement illustrated in Figure 8.2 on page 141 of the text to provide example about how to calculate the times interest earned ratio

IM 8-8

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Chapter Eight: Financial Analysis

3. Significant changes in the debt-to-equity ratio and the times interest earned ratio are of particular interest to the business owner

a. Owners compare this data with industry averages to reveal if there are changes in the particular industry

e. Profitability ratios

i. Ratios that examine the performance of the firm and its ability to make economic rents over and above its costs

1. Gross profit margin

a. Gross profit divided by net sales

b. Used to determine the overall profit obtained from sales during a specific period of time

c. Calculated by taking the total net sales of the firm and subtracting the returned merchandise as well as the direct cost of the goods sold

2. Operating profit margin

a. Operating income divided by net sales

b. Gross profit minus all operating expenses

c. Also known as earning before interest and taxes (EBIT)

i. Represents the operating efficiency of the organization

3. Net profit margin

a. Net profit divided by net sales

i. Bottom line calculation from the income statement

ii. Figure represents a view of the relative margin earned after all obligations and expenses are considered

4. Return on assets (ROA)

a. Net profit divided by total assets

i. Industry standard calculation

ii. Examine the ability of the firm to return to an overall profit compared to the amount of assets that the firm has invested

5. Return on equity (ROE)

a. Net profit divided by equity

IM 8-9

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Chapter Eight: Financial Analysis

i. Provides investors with evaluation of how much each dollar of their investment generates a profit

ii. Calculating profitability ratios

1. Review the income statement on page 140 of the text, figure 8.2

f. Summary of Ratios

i. Ratios are valuable assets to a firm

ii. Statements are standard with a variety of accounting packages

iii. Accounting packages may calculate ratios

iv. Small business owners understand the ratios and they only use a few ratios in each category to assure conciseness

1. Liquidity

2. Activity

3. Leverage

4. Performance

5. Profitability

v. Small business owners compare the ratios with other firms in their industry over a specific time period to interpret the outcome of the ratio analysis

5. Deviation Analysis (text page 148)

 Learning Objective 8-4: Explain Deviation Analysis.

a. Deviation analysis

i. Analysis of the differences between the predicted and the actual performance.

ii. Deviation is the second method used to evaluate the firm, activities, and performance

iii. The time period associated with deviation analysis is typically month to month or year to year

iv. Deviation chart has two additional columns that ensure all important metrics are maintained

1. Column to show the actual change

2. Colum to show a percentage of change

v. Ratios reveal data based on perception analysis

IM 8-10

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Chapter Eight: Financial Analysis

1. A drop in the current ratio from one year to the next can be a negative indicator

2. At the same time, a drop in the amount of complaints can be a positive indicator

vi. Entrepreneurs can easily evaluate the performance of the organization based on perception of success at the business

vii. Consider the frequency of ratio analysis when interpreting results

1. The frequency at shorter intervals can produce positive or negative insight on the outcome of the analysis

2. Shorter intervals in evaluating a firm have a tendency to reveal trends in the industry in regards to performance

3. Develop charts using shorter intervals so patterns and deviations can be observed

4. Maintain the chart to complete the analysis on a monthly basis

a. Reveal seasonal trends

i. Results of analysis enhance ordering, staffing, and advertising at the business

b. Annual updating of the chart permits the analysis over years as the firm reaches maturity

viii. Measuring the performance of a business goes beyond the financial considerations of the business

ix. Maintain an analysis of how well the firm pursues its strategy over a stated period of time

6. Sensitivity Analysis (text page 149)

 Learning Objective 8-5: Explain sensitivity analysis

i. Sensitivity analysis (text page 149)

1. A chart utilizing current cash flow statement, income statement, or balance sheet in order to create a pro forma projection based upon a dramatic increase in sales, a dramatic decrease in sales, or the complication of a major change in the business

ii. The data required to complete a sensitivity analysis

1. Current cash flow statement

2. Income statement or balance sheet

iii. The projections are based on a variety of circumstances

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Chapter Eight: Financial Analysis

1. Dramatic increase in sales

2. Dramatic decrease in sales

3. A dramatic change in the business

iv. The advantage is a visualization of how sensitive the business is to various factors

v. Cash flow statement is used to evaluate the impact of a dramatic increase or decrease in sales

1. For instance, what is the impact on the organization as a whole if the firm experiences a sudden 50 percent increase or decrease in sales

a. If the result is an increase the outcome to consider is how much staff is needed to accommodate the sales

b. Another consideration is the impact on travel or insurance

vi. Steps used in evaluation

1. List the cash flow statement of the firm

2. Provide another cash flow statement that indicates a 50 percent increase

3. Provide another cash flow statement that indicates a 50 percent decrease in sales

vii. A firm that experiences a rapid increase in sales could be hurt during the first two years of operation

1. The business could experience a recovery period in the third year

a. Result of analysis indicates a need for additional funding

b. It is very important for a business owner to gain experience in order to diversify plans to accommodate and handle a variety of changes in the business

2. A business that misses its projections by a significant amount is not good for the future of the business

viii. Sensitivity analysis provides advantages to the business

1. Sensitivity analysis provides the businessperson the opportunity to test assumptions

2. The businessperson views the potential impact of those assumptions prior to committing to additional resources

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Chapter Eight: Financial Analysis

7. Use of Short Surveys in Business

 Learning objective 8–6:Describe the use of short surveys in business

a. Surveys are the fourth method used by a businessperson to analyze the business

i. Surveys are a nonfinancial method of analysis

1. Ratio analysis, deviation analysis, and sensitivity analysis focus on the financial data associated with the business

ii. Surveys are used to evaluate the contextual information that is not easily categorized or interpreted by the business owner

1. Customers

2. Suppliers

3. Employees

iii. Surveys are used to gather data to enhance the financial success of a business

iv. Random sampling is an effective measure of a large customer base

1. Survey every third customer

a. The subset of total customers reflect all customers taking into consideration a small margin of error

v. Data obtained in a survey contains bias

1. Use judgment to interpret the results of survey

vi. Survey questions are designed to answer direct questions related to the organization’s mission and strategy

vii. Questions in the survey are designed to provide specific data about an organizations goals or objectives

viii. Results of survey data and interpretation

1. Data in the survey is tabulated and examined with statistical techniques, such as percentages

2. Increase the level of sophistication of data contained in a survey in order to achieve specific results which are based on organizational needs or owner curiosity

3. Strategic implementation of key competitive advantage to reveal trouble in goals or objectives of the business

4. Cross tabulation of related items and simple regressions form a visualization of the organization versus its competitors

IM 8-13

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Chapter Eight: Financial Analysis

a. Cross tabulations and simple regressions are available in most spreadsheet or software packages

b. Cross tabulation displays the distribution of two or more variables in columns

i. For example, how the drinks match entrees in a restaurant

c. Regression analysis is more complex

i. Reveals the difference in the measurement of profits

8. Importance of Having a Measurement Focus

 Learning Objective 8-7: Analyze the importance of having a measurement focus

i. Use a simplistic approach to measure the standard components of the business

ii. Assure that the performance of the firm is equivalent to other firms in the industry

iii. Do not analyze areas that do not create value to the business

iv. Focus efforts on areas of the firm that enhance organizational efficiency

v. Focus efforts on areas that provide a competitive advantage to the firm

vi. Concentrate analysis efforts on the areas that are extraordinary efforts to create differentiation in the business

9. For Review (text page 154)

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Chapter Eight: Financial Analysis

Key Terms

Activity ratios: Ratios that measure the efficiency with which the entrepreneur is handling the resources of the business. (LO 8.3)

Deviation analysis: An analysis of the differences between the predicted and the actual performance. (LO 8.4)

Leverage ratios: Ratios that are used to examine the relative level of indebtedness of the entrepreneurial business. (LO 8.3)

Liquidity ratios: Ratios that measure the short-term ability of the firm to meet its obligations. (LO 8.3)

IM 8-15

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cope with any emergency in such cases, and thus be able to save a flap graft from death or partial gangrene, when he would otherwise fail.

TOTAL RHINOPLASTY

PEDUNCULATED FLAP METHOD

The most practical and safe methods of rebuilding the nasal organ have been those in which flaps having nutrient pedicles have been employed, whether these flaps be taken from the skin of the forehead, cheek, or both. These procedures are autoplasties, and may be grouped according to their peculiar differentiation into three classes, as follows:

The Indian or Hindu Method, in which the flap is made from the forehead.

The French Method, in which the flap is made from the tissue about the borders of the deformity.

The Italian Method, in which the flap is taken from some distant member or part of the body.

Furthermore, there are the combined methods of one or the other in which inverted skin flaps are used, or those lined with an osseous and cartilaginous support, and in some rare and rather unsuccessful cases by metallic supports.

The Indian or Hindu Method

The method of rebuilding the nose by taking one or two flaps from the forehead dates back to the Koomas, from whom the art of rhinoplasty has come down to the present time, all of the methods of to-day involving the utilization of the pedunculated flap being a result of their early surgical ingenuity.

Originally, their operation consisted of cutting an oval flap, having its pedicle as the root of the nose, and extending over the forehead, and upward vertically into the hair line. The flap thus made was dissected away from the bone and brought down by twisting it to the extent of a hundred and eighty degrees on its pedicle in front of the nasal deformity, the edges of which had been prepared to receive it. To hold the flap in position they resorted to some kind of clay, sutures being unknown to them.

The pedicle was cut after the flap had thoroughly united to the freshened borders of the deformed nose.

The steps of the operation as performed by them are shown in Figs. 314, 315, and 316.

Naturally, many improvements in the above method have been evolved, principally to overcome the extreme and injurious torsion of the pedicle, and from the desire on the part of the surgeon to bring about a better cosmetic result. Therefore, not only the position of the pedicle and its shape were altered, but also the size of the flap itself, as will be shown in the specific methods of the various authorities mentioned hereafter.

The author does not consider it necessary to go into chronological details of the evolvement of the art, and begs the surgeon to be content to learn of those operations and methods that have given the best result.

Where one surgeon has changed his incisions in the slightest direction and another has advised increasing the number of sutures is of little import to the operator of to-day; the gist of it all is the successful method for the successful outcome.

The first to be considered will be those methods wherein the vertical direction and the position of the pedicle have been similar to that of the Koomas. It will therein be noted that the principal change has been in the formation of the distal end of the flap with the object solely of forming a better base to the nose.

Graefe Method.—The flap was made in the shape of a heart with a rectangular addition at its upper or scalp border. The pedicle is made to lie between the inner limitations of the eyebrows (see Fig. 317).

The flap is twisted into position and sutured into the freshened remains of the nose, the pedicle being cut at a second operation after the flap has healed into place, which was about the tenth day.

Delpech Method. The shape of the frontal flap was cut in the form of a trident, as shown in Fig. 318.

The object of the arrangement was to give a rimlike lining to the two nostrils, the raw surfaces of the outer points being brought into contact with each other.

He also hollowed out a groove at the root of the nose, to better accommodate the pedicle when twisted. The steps are shown in Figs. 319 to 321. The pedicle was later severed when the conditions warranted it.

FIG. 317. GRAEFE METHOD.

IG. 318. FIG. 319. FIG. 320. FIG. 321.

Method of Lisfranc.—Lisfranc conceived the idea that if he carried down the one incision for the flap at the root of the nose somewhat lower than the other he would overcome some of the torsion at this point. This he consequently did, making the left incision half an inch lower than the right. The lateral incisions ascend at an angle of forty-five degrees (see Fig. 322), uniting in rectangular form at the scalp line, as shown, the rectangle of skin being utilized to make the subseptum.

Instead of sutures he dissected up the old nasal borders and slid the flap borders into this groovelike arrangement, holding it in place with the aid of sticking plasters.

With the above method the pedicle was allowed to remain intact. Fig. 323 shows the position of the flap, and the treatment of the subseptal section.

FIG. 322. FIG. 323.

LISFRANC METHOD.

Labat Method.—Labat uses a frontal flap shaped as in Fig. 324. The left bordering incision is carried down one half inch below the point of beginning on the right and carried downward in such manner that its lower point lies in a line with that of the right above it.

The object of this was to overcome torsion, and, where obtainable, the small triangle of healthy tissue at the root of the nose, as shown in the illustration, was dissected off from above downward, and turned downward with the cutaneous side facing the nasal chasm and its dissected side facing that of the flap. He avoids injury to the angular artery, as should be done in all cases. The pedicle was replaced at a second operation.

Keegan Method.—Utilized a flap, shaped as in Fig. 325. The pedicle occupies the internal angle of the eye, care being taken to preserve the angular artery. The flap is mapped out obliquely, not perpendicularly. To get the best results he advises pasting a paper model upon the forehead to guide the operator in making the flap, which includes all the tissue down to the periosteum. Horsehair sutures are employed to approximate the parts accurately. The pedicle is divided in about twenty days, and a wedge-shaped piece of skin is excised at the root of the nose to prevent the tuberosity at this point of the new nose, so commonly observed with Indian-flap methods.

FIG. 324. LABAT METHOD.

Duberwitsky Method. The flap at its root resembles that of Labat, but at its superior border it formed an oval with an elongated point running into the hair line, which he divided, as shown in Fig. 326, to form the subseptum and nasal wings.

At the root the pedicle was about half an inch wide made in the oblique.

The middle section of the superior pointlike projection and intended for the subseptum was folded upon itself or doubled, as it were, to give support to the nasal point. The same was done with the alar or lateral sections, so as to line the nares with epitheliar surface to prevent contraction. The lower part of the nose was fixed into position by a harelip pin inserted transversely after all parts of the flap had been sutured into place.

FIG. 325. KEEGAN METHOD.

Dieffenbach Method. The flap is cut very much like that advised by Lisfranc, being wider only at its upper extremity, as shown in Fig. 327.

He advocates removing the remains of the old nose, almost circumscribing the nose, as shown in the illustration, except for the deep linear incision at the base of the nose on a level with the oval fissure, leaving a bridge of skin at either angle into which the square or septal part of the superior frontal flap is affixed.

The flap is made so that the right oblique line lies an inch above that of the left, the latter incision running into the angle formed at the root of the old nose caused by the ablation.

FIG. 326. DUBERWITSKY METHOD.

Von Ammon Method. The flap is cut at its superior border, similar to that of Keegan, but made in the perpendicular; the point of beginning, at the end of the right eyebrow, lies about an inch above the end of the incision of the opposite side, but in line with it (Fig. 328). The same method of removing the remains of the old nose advocated by Dieffenbach is followed as well as the lobial incision to receive the septal section.

The shape of this flap permits of bringing the secondary wound on the forehead more readily than where square exsections are resorted to.

FIG. 327. DIEFFENBACH METHOD.

Auvert Method.—Like the method of Keegan, the frontal flap is made at an angle of forty-five degrees instead of the perpendicular, the flap being cut to the left of the median line. Its outline is shown in Fig. 329, and differs little at its superior extremity from that of Labat, except that it is made longer and narrower. The left lateral incision runs into the superior border of the old nose at the median line.

Von Langenbeck Method. The flap is fashioned like that of Duberwitsky, but the left lateral incision enters the remains of the old nose, as Dieffenbach advised. The superior border was shaped, as shown in Fig. 330, to form the alæ and columna.

FIG. 329. AUVERT METHOD.

Petrali Method. The shape of the flap is cut in ovate form with its rounded base near the hair line of the forehead. Petrali likens it to the form of the mulberry leaf. The left lateral incision dips down into the median line of the old deformity at its upper border.

The flap, after having been cut free, is folded upon itself along the median line, bringing the raw surfaces together along the dorsum of the new nose, thus giving body to the whole anterior nasal line. Presumably he introduces several sutures through the side of the flap to facilitate union along this line.

The method is illustrated in Figs. 331 and 332.

FIG. 330. VON LANGENBECK METHOD.

FIG. 331. FIG. 332.

Forque Method.—Herein the right lateral incision of the frontal flap is begun at a point above and corresponding to the middle of the eyebrow. The base is fashioned as shown in Fig. 333, and the left lateral incision is carried down to the median line of the old nasal defect, coming within the inner border of the eyebrow.

PETRALI METHOD.

D’Alguie Method. This author conceived the idea of further relieving the torsion of the pedicle by making the frontal flap transverse along the forehead, instead of perpendicular.

The incision at the root of the nose is on a level and in line with the inner ends of the eyebrows. The left lateral incision is made to lie just above the eyebrow and the right sweeps upward and outward, as shown in Fig. 334.

The base is made with a rectangular projection to form the columna.

FIG. 333. FORQUE METHOD.

Landreau Method. The direction of the frontal flap is transverse, but the root of pedicle, instead of having a downward direction, is so cut as to have its attachment upward, as shown in Fig. 335. This position of the pedicle thus overcomes to a great extent the torsion at this point. The flap must be cut somewhat longer in its transverse axis to allow for the higher position of the pedicle on the forehead.

The distal end of the flap is trident-shaped, as shown.

FIG. 334. D’ALGUIE METHOD.

Langenbeck Method. The flap is cut on an oblique line along its left border, running the incision down and across the root of the nose to the right while the right incision begins just under the eyebrow and extends less obliquely upward, as shown in Fig. 336. The base of the pedicle is fashioned as shown. The bordering remains of the old nose are removed.

In another operation by the same operator the right incision was begun at a point above the eyebrow and carried transversely along to the rising point of the lateral. The left lateral incision was so made that it left an area of skin over the root of the nose, as shown in Fig. 337, which he dissected away, giving that part of the flap to cover it an opportunity to adhere, at the same time furnishing a nourishing area for its future life.

FIG. 336. VON LANGENBECK METHOD.

Szymanowski Method. The flap is formed as shown in Fig. 338, the pedicle having its upper incision just below the end of the right eyebrow and the lower below the inner canthus on a line with the first, giving it an oblique position.

Just below the curvature of the basal incision two short incisions are made on either side into the forehead tissue with a view of rendering more flexible the skin to be utilized in correcting the secondary wound. The margin of the old nose is freshened.

FIG. 337. VON LANGENBECK METHOD.

Labat, Blasius, Linhart Method. These operators performed their operations in two sittings. In the first the incisions were so made at the base as to permit of that part of the flap intended for the rim of the nares to be tucked in, as it were, where these two triangular little folds were held in place by silk suture. When the parts had become thoroughly united, or at the second sitting, the entire flap was cut away and brought into place for the new nose. The object of this procedure was to give body to the wings of the nose and to overcome the consequent curling and contraction of the skin so commonly found with the single sitting operation.

This step marked the first advancement toward attaining much more successful results in total rhinoplasty by using skin-lined flaps,

FIG. 338. SZYMANOWSKI METHOD.

which not only added to the better nutriment to the part, but also gave support and firmness to the new organ.

The FrenchMethod

This method, per se, is not in itself sufficient to bring about a satisfactory result. The fundamental principle is that of the sliding flap of Celsus, and in which the two flaps intended to form the new nose are taken from the tissue of the cheek at either side of the remains of the old nose.

The total outcome is simply to bring before the opening a curtain of skin with a median scar running from the root to the lobule, which in itself is sufficient upon contraction to mar the result; furthermore, there are the two lateral wounds which have to be covered by skin grafts which, upon healing, have their tension of contraction, added to that of the median scar, with the result that the anterior nose becomes flattened and ugly, practically amounting only to an unevenly contracted curtain of marred skin.

The author would not advise resorting to such method, but, owing to the fact that a step in the advancement of the art was conceived under this particular method, space is given to the subject. This step, first introduced by Nélaton, consisted of allowing all of the cicatricial tissue of the old nose to remain with which the new nose could be built. As the possibility of this is rare in total rhinoplastic cases, the method is more useful in partial rhinoplastics, where it forms an important factor, as will be shown later under that subdivision.

Nélaton Method.—Two lateral flaps of triangular form, having their pedicles below the internal canthi, are cut from the cheeks, each flap containing all of the remains of the old nose. The entire inner borders of these flaps were freshened throughout their whole thickness.

In making the flaps, dissection is made down and through the periosteum, thus giving firmness and thickness to the new nose. The

flaps are slid forward and sutured along the median line, leaving a triangular wound of the cheek on either side, as shown in Fig. 339.

To keep the raw surfaces in contact with the newly dissected area and to retain the nose in place as far as possible, a silver pin is inserted through the base of the new nose, going through the skin and remains of the old nose. It should be of sufficient length to permit holding a disk of cork at either end, beyond the skin and for the retention of the metal ring ends of a hook bent in inverted Ushape. The diameter of the latter bent wire is equal to that of the pin.

He claims for his method a perfect and fixed cicatrization of the newly placed parts.

Heuter Method. The cheek flaps are cut from the cheeks, as shown in Fig. 340, leaving intact a triangular piece of skin with the object of giving support to the new nose. The inner and upper borders of the two flaps were stitched to the rim of this triangle, and then along the median line. The flaps are not made to include the periosteum, as in Nélaton’s method. The results thus obtained are not equal to the latter’s procedure.

FIG. 339. NÉLATON METHOD.

Bürow Method. The cheek flaps are made as in Fig. 341. The projection intended for the subseptum is an elongated strip at the inferior border and inner angle of the left flap.

The shaded triangles at either extremity of the outer incisions show the removal of the skin at these points, to facilitate sliding of the flaps, adding, however, to the extent of cicatricial contraction upon final healing, with the resultant flattening of the new nose. The lobular prominence takes an upward position eventually, and altogether the extensive secondary wounds and the effect of their behavior does not warrant the use of this method.

Szymanowski Method.—His method is an improvement on that of Bürow. The flaps, inclusive of considerable cellular tissue, are fashioned in Fig. 342, except under the two narrow extension flaps, which are to be utilized in building up the subseptum. Their raw surfaces are sutured together with silk. The flaps are united along the median line.

If the tissue from the cheeks do not permit of free sliding forward of the flaps, further incisions shown by the dotted lines over each malar prominence are made. The skin of the shaded irregular areas on either side is removed, as in the Bürow method.

Serre Method.—The flaps are made to either side of the remains of the old nose, each leaving its pedicle about one fourth inch below the inner canthus of the eye. The flaps were cut rather obliquely, their bases extending somewhat below the nasal orifices. The remaining skin of the latter was dissected downward and folded down upon the median third of the lip. If cut in two sections their inner borders were sutured so that their raw surfaces faced each other. The object of the latter step was to form the subseptum, according to Lisfranc. The sections of skin lying with their bases on a level with the nasal orifices were dissected downward and united in the median line to assist in forming the end of the nose. All along the borders of the old nose were also dissected up where possible and folded inward, so that their raw surfaces would adhere to the new dorsum of the nose, and thus give it stability and form. These pieces of skin were united at the median line when possible.

The cheek flaps with indented bases were now brought forward and united, as shown in Fig. 343. The skin of the cheeks was dissected up to the extent of the dotted line in the former illustration, and when necessary two lower curved incisions were made to permit of free sliding. The skin of the cheeks was retained

by three sutures at either side, as shown in Fig. 344. The subseptum may be made at the same sitting, or at a later operation.

Syme Method.—The procedure is very like that of Heuter, except that the somewhat curved line making the inner borders of the flaps extended over the root of the old nose. The lower ends or bases of the two cheek flaps were stitched around and to the orifice to form the end of the nose, rubber tubes being used to form the nostrils, where they were retained until healing was complete.

Blasius Method.—He forms the cheek flaps in triangular form, including all of the tissue making up the buccal cavity. The outer or cheek incision is made through all of the tissue and extends to a point corresponding to a point a given distance beyond the angle of the mouth. The inner incision is made from a point just below the angle of the ala downward and through the thickness of the lip. A third incision unites the angle of the mouth with the outer incision. Both cheek flaps are made alike, each remaining attached along all of the remains of the old nose. They are now raised upward and inward, with their mucosa facing outward, and united along the median line. The raw cheek borders are now brought forward and

FIG. 343. FIG. 344.
SERRE METHOD.

held in place by suturing them at either side to the remaining rectangular flap of the upper lip. The formation of the subseptum is left for a second sitting. This method is not only too extensive, but too disfiguring to make its employment practicable. The mucous membrane would, of course, in time take on the function and appearance of skin, but the shape of the mouth never assumes a normal form, especially since there is quite a loss of the vermilion border at either side which is raised upward with the cheek flaps to assist in forming the base of the nose.

Maisonneuve Method. Where there is more or less occlusion of the nares and yet an integumentary covering corresponding to the nose, as it might rarely be in congenital cases, Maisonneuve utilizes the sliding flap method to overcome the abnormality. In the case presented, the nasal orifices were hardly three sixty-fourths of an inch in diameter and about one inch apart. The correction was accomplished as follows, and shown in Fig. 345: An incision was made transversely outward from each nostril, then two converging incisions were made from both nares downward, meeting at the vermilion border of the lip in the form of a V, which were made to include the whole thickness of the lip. This flap was brought upward to form the subseptum. The skin to form the nasal lobule was now slid forward from either end of the incision and the subseptum sutured in place. Rubber tubes were employed to keep the nares distended and permit of the wings of the nose to form.

The defect in the upper lip was brought together as in a median harelip operation, the parts appearing after operation as illustrated in Fig. 346.

FIG. 345. FIG. 346.

AISONNEUVE METHOD.

The Italian Method

In this classification of total rhinoplasty the skin flap is taken from another part of the body and not from the face. The integument of the arm is usually employed, the pedicle remaining intact until the flap has healed into place.

The method has been accredited to the Italian author-surgeon Tagliacozzi, but it was practiced long before his time; yet he was the first to fully describe the steps of the successful operation. It has been referred to quite fully under skin grafting.

The flap having an attached pedicle is cut from the entire thickness of the skin of the arm. The free end of the flap is sutured to the freshened borders of the old nose, and the arm is held in place until union has been established, when the pedicle is cut.

M

There are no special advantages in this method, since the outcome is no better than that obtained with the Indian method; at best the result is merely the curtain of skin covering the defect, with the one thing in its favor—the avoidance of the frontal scar. Against this is the great discomfort the patient must suffer in having his arm retained in the necessary position to prevent movement and strain on the flap, to which may be added the danger of embolism occasioned by freeing the arm at the time the pedicle is cut. There is also difficulty of properly dressing the wounds, owing to the constrained position which consequently invite sepsis and imperfect healing. Hence, for total rhinoplasty, this method may be termed unsatisfactory; yet for certain partial rhinoplastic results it supersedes all other methods, as will be hereinafter shown.

To make the flap a pattern is laid upon the skin, from which it is to be made; it should be one third larger than the actual size of flap needed, to allow for contraction. The incisions should go through the entire thickness of the skin, leaving an attachment or pedicle, what in this case would be the part of the flap intended for the base of the nose, and directly opposite to those described heretofore.

The flap may be sutured in place immediately after the cutting, or it may be allowed to remain upon the arm until contraction has taken place in the flap, or the flap may first be modeled into nose shape and then sutured upon the freshened margins of the old nose.

The arm must in any of these methods be held in place during the days required to have the flap heal or unite with the facial tissue. The various operators have devised means to accomplish this. There is the linen network of bandages of Tagliacozzi, the harness of Berger, the starched linen and book-board affair of Sedillot, the onepiece suit of Lalenzowski, the leather sleeve and helmet of Graefe and Delpech and many others.

Having determined upon the method to be followed in securing the flap, the surgeon is advised to consider such apparatus as he may be able to procure to retain the parts, or to use his own ingenuity to construct one of plaster-of-Paris bandages to meet the

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