Oana Labes, MBA, CPA
Transformative Finance Strategist, Coach & Speaker | Empowering CEOs & CFOs to Win with Decision-Ready Dashboards, Finance-Ready Strategies and Boardroom-Ready Reports | Founder & President, Financiario
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The Financial Analysis Cheat Sheet.Because every business needs regular financial health check-ups.๐๐๐ฅ๐ฉ ๐ฆ๐ ๐ฌ๐ฉ๐ซ๐๐๐ ๐ญ๐ก๐ข๐ฌ ๐๐ฌ๐ฌ๐๐ง๐ญ๐ข๐๐ฅ ๐ค๐ง๐จ๐ฐ๐ฅ๐๐๐ ๐ ๐ฐ๐ข๐ญ๐ก ๐ญ๐ก๐ข๐ฌ ๐ ๐๐๐ ๐๐ก๐๐๐ญ ๐๐ก๐๐๐ญ.๐ฏ๐๐ข๐ค๐, ๐๐ก๐๐ซ๐ ๐๐ง๐ ๐๐จ๐ฆ๐ฆ๐๐ง๐ญ ๐ฌ๐จ ๐ญ๐ก๐ข๐ฌ ๐ฉ๐จ๐ฌ๐ญ ๐๐๐ง ๐ซ๐๐๐๐ก ๐๐ฏ๐๐ซ๐ฒ๐จ๐ง๐ ๐ฐ๐ก๐จ ๐ง๐๐๐๐ฌ ๐ญ๐จ ๐ซ๐๐๐ ๐ข๐ญ!๐๐จ๐ฎ๐ฅ๐ ๐ฒ๐จ๐ฎ ๐ฅ๐ข๐ค๐ ๐ญ๐ก๐ ๐๐จ๐ฐ๐ง๐ฅ๐จ๐๐๐๐๐ฅ๐ ๐๐๐ ๐ฏ๐๐ซ๐ฌ๐ข๐จ๐ง?๐ ๐๐ข๐ค๐, ๐๐จ๐ฆ๐ฆ๐๐ง๐ญ, ๐๐๐ฉ๐จ๐ฌ๐ญ๐ ๐๐๐ซ๐ ๐ข๐ฌ ๐ฐ๐ก๐๐ญ ๐๐ก๐ ๐ ๐ข๐ง๐๐ง๐๐ข๐๐ฅ ๐๐ง๐๐ฅ๐ฒ๐ฌ๐ข๐ฌ ๐๐ก๐๐๐ญ ๐๐ก๐๐๐ญ ๐ข๐ง๐๐ฅ๐ฎ๐๐๐ฌ:๐ฏ The Financial Analysis Scorecard๐ฏ Vertical Analysis๐ฏ Horizontal Analysis๐ฏ Sensitivity Analysis๐ฏ Project Profitability๐ฏ The Dupont Analysis๐ฏ 5 EBITDA Ratios๐ฏ 5 Cash Flow Ratios๐ฏ Key Profitability Ratios๐ฏ Key Liquidity Ratios๐ฏ Key Solvency Ratios๐ฏ Key Efficiency RatiosUse this Cheat Sheet to evaluate the financial health, performance, and viability of a business or project.๐๐๐๐๐๐ฅ๐ฉ ๐ฆ๐ ๐ฌ๐ฉ๐ซ๐๐๐ ๐ญ๐ก๐ข๐ฌ ๐ ๐ข๐ง๐๐ง๐๐ข๐๐ฅ ๐๐ง๐๐ฅ๐ฒ๐ฌ๐ข๐ฌ ๐๐ก๐๐๐ญ ๐๐ก๐๐๐ญ๐๐๐๐๐ฅ๐๐๐ฌ๐ ๐ซ๐๐ฉ๐จ๐ฌ๐ญ ๐ข๐ญ ๐ ๐๐ง๐๐ซ๐จ๐ฎ๐ฌ๐ฅ๐ฒ ๐ญ๐จ ๐ก๐๐ฅ๐ฉ ๐จ๐ญ๐ก๐๐ซ๐ฌ.๐๐๐๐๐ข๐ค๐, ๐๐จ๐ฆ๐ฆ๐๐ง๐ญ, ๐๐๐ฉ๐จ๐ฌ๐ญ!---------------------๐ฏ ๐๐จ ๐ฅ๐๐๐ซ๐ง ๐ก๐๐ง๐๐ฌ-๐จ๐ง ๐ก๐จ๐ฐ ๐ญ๐จ ๐๐ง๐๐ฅ๐ฒ๐ณ๐, ๐จ๐ฉ๐ญ๐ข๐ฆ๐ข๐ณ๐, ๐ฌ๐ญ๐ซ๐๐ง๐ ๐ญ๐ก๐๐ง, ๐๐ง๐ ๐ฆ๐๐ฌ๐ญ๐๐ซ ๐๐๐ฌ๐ก ๐๐ฅ๐จ๐ฐ check out The Cash Flow Masterclass (link in my Linkedin profile)---------------------๐ ๐๐จ ๐ ๐๐ญ ๐ฆ๐ฒ ๐ฎ๐ง๐๐๐๐ซ๐๐ฏ๐ข๐๐ญ๐๐ ๐๐ข๐ง๐ค๐๐๐ข๐ง ๐ฉ๐จ๐ฌ๐ญ ๐๐จ๐ง๐ญ๐๐ง๐ญ ๐๐ง๐ ๐จ๐ญ๐ก๐๐ซ ๐๐ข๐ง๐๐ง๐๐ ๐ ๐๐ฆ๐ฌ ๐๐๐ฅ๐ข๐ฏ๐๐ซ๐๐ ๐ฌ๐ญ๐ซ๐๐ข๐ ๐ก๐ญ ๐ญ๐จ ๐ฒ๐จ๐ฎ๐ซ ๐๐ง๐๐จ๐ฑ check out my free newsletter The Finance Gem ๐ (link in my Linkedin profile & below in comments)--------------------โ Follow me for more finance, business, and cash flow insights.๐ Ring the bell at the top right of my profile so you don't miss out on new posts.#entrepreneur#finance#business
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Lawrence Buwembo
Risk and Assurance Executive | CFE, CRA, PMP, CISA, MSc IT (Data Engineering)
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Great cheat sheet Oana Labes, MBA, CPA. You could even make it better by indicating an optimal result to each of the ratios, against which analysts can benchmark good/bad performance of entities/projects etc
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Asim Alsarhani
ISE, CISCC, CISCM, CISCP, SCM, Lean Six Sigma (LSSGB), ISO 9001 & 45001 Lead Auditor | International Supply Chain Consultant | Industrial & Systems Engineer | KFUPM & MIT Alumnus | McKinsey Forward
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Thank you for sharing the Financial Analysis Cheat Sheet. It is a useful resource for businesses looking to perform regular financial health check-ups. The techniques you have listed, such as the Financial Analysis Scorecard, Vertical and Horizontal Analysis, and various ratios, provide valuable insights into a company's financial performance. It is important for businesses to regularly monitor their financials using these techniques to make informed decisions and improve their bottom line.
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Alexandr Kel
Data Analyst, BI Analyst (Power BI, SAP BI, SQL, Python), Analytics Manager, Data Scientist
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Amazing work. Thank you
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Nuwan De Silva
Senior Manager - Credit
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Very informative and useful Thank you Oana Labes, MBA, CPA for sharing!
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Binh Tran (Jack)
Investment Advisor
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Thank you for sharing!
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Gary Pickholz
At the intersection of Doing Well and Doing Good
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Pdf please
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Shaima Wahchi
International Cambridge Certified Business Studies Teacher | Entrepreneurship and Sustainable Development Goals instructor
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These financial sheets are extremely helpful for business studies students. Thank you for sharing!
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Jonah O. George, CPA, MBA
Chief Financial Officer | CFO | SaaS Expert | Venture Capital, FP&A, Financial Modeling, Fundraising | I help start-ups scale & grow with a 99% success rate.
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Great
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Sam Carter
Fractional CFO/Business Advisor/Providing comprehensive C-Suite services for business growth.
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Excellent breakdown in the infographics about financial analysis Oana Labes, MBA, CPA
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Oana Labes, MBA, CPA
Transformative Finance Strategist, Coach & Speaker | Empowering CEOs & CFOs to Win with Decision-Ready Dashboards, Finance-Ready Strategies and Boardroom-Ready Reports | Founder & President, Financiario
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10 Strategic Cash Flow Mistakes and How to Fix Them.-------๐If you liked this post, youโll love the strategic finance insights I publish weekly in my free newsletter. ๐Sign up here: https://bit.ly/4300Di8-------If you're making these, your organization and career might be at risk. 1๏ธโฃ Mismatching Cash Flow Maturitiesโณ Utilizing short-term financing for long-term assets will lead to liquidity challenges.โณ Match up the cash flows on the assets being financed with cash flows on the debt2๏ธโฃ Ignoring Foreign Exchange Rate Volatilityโณ Trading in multiple foreign currencies can quickly erode profitability, liquidity, and leverage.โณ Design an active FX management strategy (forwards, options, etc) to safeguard against the adverse effects of currency fluctuations.3๏ธโฃ Ignoring Interest Rate Volatilityโณ Ignoring interest rate volatility can impact financing costs and cash flow predictabilityโณ Develop an appropriate financing strategy to manage exposures (swaps, options, etc) and protect cash flows.4๏ธโฃ Misinterpreting Negative Operating Cash Flowsโณ Negative operating cash flows aren't a negative sign unless they're due to underlying financial distressโณ Secure suitable working capital financing and avoid overtrading5๏ธโฃ Relying on One-Time Positive Investing Cash Flowsโณ Selling non-redundant assets to fund ongoing operating deficits can hide structural challengesโณ Resolve underlying profitability issues early and seek sustainable financing solutions6๏ธโฃ No Growth Working Capitalโณ Failing to adequately finance growth working capital can slow expansions and deplete cash reservesโณ Negotiate suitable working capital financing to fund current asset growth7๏ธโฃ Mismanaging Payment Termsโณ Misaligning terms between suppliers and customers can lead to cash flow shortfalls and liquidity issues โณ Negotiate terms that complement your cash flow cycle and secure backup financing 8๏ธโฃ Failing to Leverage Cash Management Toolsโณ Manual cash management exposes organizations to errors and suboptimal cash positions โณ Integrate modern cash flow management tools including automated receivables and payables for improved cash flow visibility and control9๏ธโฃ Neglecting Cash Flow Forecastingโณ Lack of comprehensive cash flow forecasting will prevent opportunities and introduce undue risk, threatening business viabilityโณ Use both short term rolling & long term cash flow forecasts ๐ Ignoring Long-Term Strategic Implications of Cash Flow Decisionsโณ Short-term cash management decisions significantly diminish growth โณ Balance immediate liquidity with long-term vision to align day-to-day needs with long term goals ----โถGet my on-demand video course with 5* reviews: The Cash Flow Masterclass: https://bit.ly/3NZJvSO โ Follow me for strategic finance, business, and cash flow insights๐Grab my viral finance cheat sheet pack: https://bit.ly/3T3CtPmโป ๐๐ข๐ค๐, ๐๐จ๐ฆ๐ฆ๐๐ง๐ญ, ๐๐๐ฉ๐จ๐ฌ๐ญ to share with your network โป
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Oana Labes, MBA, CPA
Transformative Finance Strategist, Coach & Speaker | Empowering CEOs & CFOs to Win with Decision-Ready Dashboards, Finance-Ready Strategies and Boardroom-Ready Reports | Founder & President, Financiario
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100 Business KPIs.Because what gets measured gets done. Here are 25 x 4 to choose from, measure, and benchmark.To help your organization achieve its most strategic objectives.โทโทโท Let me know in the comments: which of these are you regularly monitoring?โก๏ธโก๏ธโก๏ธ If youโd like a full resolution PDF copy, please help me spread this free resource. Then download it here: https://lnkd.in/esMmdD5Wโก๏ธโก๏ธ Like, Comment, Share with your network.โก๏ธ And make sure you follow me so you donโt miss out on the next resource!โท There are many ways to segment business measures and turn them into KPIs. โท Here are 4 essential business dimensions to consider:1. Finance KPIs2. Accounting KPIs3. Investing KPIs4. Cash Flow KPIsโท Letโs break them down one by one:1. Finance KPIs:โถ measure the financial health and performance of the business. โถ provide a snapshot of how well the company is utilizing resources to generate earnings and cash flow.โถ help companies make informed decisions on investments, cost management, and strategic planning 2. Accounting KPIs (some overlap exists with Finance KPIs):โถ measure the efficiency of the business operations, and the effectiveness of accounting processes, and internal controls. โถ essential for operational planning, financial reporting, and ensuring the integrity of financial data.โถ help improve short term cash management, financial reporting accuracy, and compliance3. Investing KPIsโถ measure the performance of investment activities, focusing on returns and strategy effectiveness โถ critical to assess how well invested capital is contributing to growth and strategic objectives.โถ help optimize investment portfolios, strategic asset allocations, and risk vs. return investment profiles4. Cash Flow KPIsโถ measure liquidity, cash management effectiveness and business risk โถ critical to ensure the availability of sufficient cash to fund operations, invest in opportunities, and meet obligations.โถ enable companies to better manage working capital, anticipate cash shortages, and plan for sustainable financial growth.What would you add?PS. My favorite KPI is the Cash Flow Debt Service Ratio. Whatโs yours?-------โก๏ธโก๏ธโก๏ธ Like, Comment, Share and get your full resolution PDF copy: https://lnkd.in/esMmdD5W โก๏ธโก๏ธ Follow me to get my future posts.
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Oana Labes, MBA, CPA
Transformative Finance Strategist, Coach & Speaker | Empowering CEOs & CFOs to Win with Decision-Ready Dashboards, Finance-Ready Strategies and Boardroom-Ready Reports | Founder & President, Financiario
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Learn to Manage Cash.Here's why:To seize growth opportunitiesTo protect against critical business risksTo avoid financial distress and loss of business valueTo maximize shareholder value and return on investment.๐ Let me know in the comments, how do you forecast cash flow? ๐ฏ If youโd like a full resolution PDF copy, please help me spread this free resource.โก๏ธโก๏ธโก๏ธ Like, Comment, Share with your network. Then download it here: https://lnkd.in/eYRG-QnGโก๏ธโก๏ธ And make sure you follow me so you donโt miss out on the next one!๐ฏ Cash comes into a business from 3 main sources:>> Operations>> Investments>> Financing๐ฏ Cash 1.0 is optimizing AR, AP and Inventory terms and turnover ๐ฏ Cash 2.0 is working on:>> Cash Flow Forecasting Techniques>> Effective Debt Management>> Capital Expenditure (CapEx) Cash Flow Optimization๐ฏ Here are 4 critical reasons to remember for managing cash:1๏ธโฃ Seize Growth Opportunities:โซ you need agility to capitalize on acquisitions, expansions, or innovation โซ cash reserves may not be sufficient, so having a strategy to attract the incremental cash you need will allow you to take quick action on opportunities and give you a competitive edge.2๏ธโฃ Protect Against Critical Business Risks:โซ cash acts as a financial buffer against economic downturns, demand fluctuations, or supply chain issuesโซ taking steps to ensure sufficient excess cash will help ensure your operational stability and strategic focus during unforeseen challenges3๏ธโฃ Avoid Financial Distress and Loss of Business Value:โซ effective cash management will prevent cash flow shortfalls, which are a leading cause of business failure.โซ the worst time to get other people's money (bank, investors) is when you actually need itโซ planning ahead will help you meet short-term liabilities (payroll, suppliers, debts) and avoid eroding business value and reputation.4๏ธโฃ Maximize Shareholder Value and Return on Investment:โซ strategic investments and operational decisions that drive long-term growth and profitability require advanced cash flow planningโซ managing cash effectively will always position companies favorable to generate and provide superior returns to shareholdersWhat would you add?PS. What was your favorite part?---โก๏ธโก๏ธโก๏ธ Grab my free strategic finance sheets: https://lnkd.in/e4T6-6-5โก๏ธโก๏ธ Like, Comment, Share for full resolution PDF copy of this cheat sheet. You can download it here: https://lnkd.in/eYRG-QnGโก๏ธ Follow me to know about my future posts
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Oana Labes, MBA, CPA
Transformative Finance Strategist, Coach & Speaker | Empowering CEOs & CFOs to Win with Decision-Ready Dashboards, Finance-Ready Strategies and Boardroom-Ready Reports | Founder & President, Financiario
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I was named #3 in in the Top 10 Linkedin Female Canada.But I wasn't born in here...I'm an immigrant.I started posting about Finance & Accounting on Linkedin a year ago.Since then I reached over 100 million people with my posts & infographics.Over 326,000 of you here follow me, and 40,000 read my weekly newsletter.Linkedin has changed the game for me.A year ago I was an entrepreneur on a mission.Today I am an entrepreneur on an even bigger mission.And I'm representing for millions of professional girls and women.Because if you can see her, you can be her!Thank you Favikon for this recognition. And congratulations to the inspiring ladies in this fantastic lineup. Arlene Dickinson, Katy McFee, Dora Vanourek,Erica Rankin,Maame De-Heer,Rita Orji, PhD, Chrystia Freeland,April Dunford, Gabrielle B.--------โ Follow me for strategic finance, business, and cash flow insights๐Grab my viral Finance infographics: https://lnkd.in/eC_ihy6yโป ๐๐ข๐ค๐, ๐๐จ๐ฆ๐ฆ๐๐ง๐ญ, ๐๐๐ฉ๐จ๐ฌ๐ญ to inspire your network โป
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Oana Labes, MBA, CPA
Transformative Finance Strategist, Coach & Speaker | Empowering CEOs & CFOs to Win with Decision-Ready Dashboards, Finance-Ready Strategies and Boardroom-Ready Reports | Founder & President, Financiario
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Oana Labes, MBA, CPA
Transformative Finance Strategist, Coach & Speaker | Empowering CEOs & CFOs to Win with Decision-Ready Dashboards, Finance-Ready Strategies and Boardroom-Ready Reports | Founder & President, Financiario
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You canโt manage what you donโt measure. And you canโt measure what you donโt understand. The Revenue to Cash waterfall will help you visualize,So you can understand, measure, and manage your performance.--------โฌโฌโฌ๐Increase your impact and influence. Get this sheet and many other finance gems in my weekly newsletter๐ Sign up and get a bonus pack as a welcome gift: https://lnkd.in/eC_ihy6yโฌโฌโฌ--------๐ฏ The Revenue to Cash waterfall chart is a strategic tool that breaks down the story of your organizationโs liquidity from opening to closing balance.โIt helps you connect the Income Statement and Balance Sheet with the Cash Flow Statement. โ Each step can reveal efficiencies or red flags that may impact financial health. ๐ฏ Hereโs how to put it together:โก๏ธ Opening Cash Balance: start with the initial cash available to the business.โก๏ธ Revenue: add total revenue from goods sold or services provided as this is the influx that triggers the waterfall.โก๏ธ Cost of Goods Sold (COGS): subtract the direct costs attributable to the production of the goods sold.โก๏ธ Depreciation and Amortization: subtract this non-cash expense that reflects the consumption of assets over time. Weโll add it back later.โก๏ธ Operating Expenses: subtract the costs necessary to maintain the business's operational capabilitiesโก๏ธ Interest Expense: subtract the cost of borrowing โก๏ธ Tax Expense: subtract the cash paid for taxes โก๏ธ Net Income: arrive at the net income for the period, which is also the starting point for making critical adjustments that will link it to the closing cash balance for the periodโก๏ธ Depreciation and Amortization (Adjustment): add back non-cash expenses previously subtractedโก๏ธ Changes in Working Capital: โ subtract the cash still not collected from sales revenuesโ subtract cash paid for purchases not yet sold and sitting in inventoryโ add the cash not yet paid to suppliers and other third parties.โก๏ธ Investments: subtract net investments for long-term assetsโก๏ธ Net Payments for Debt and Equity: subtract net cash paid for debt or equityโก๏ธ Closing Cash Balance: calculate the ending point of the waterfall, representing the final cash position for the periodโ Which step do you find most challenging?----------------------๐ฏ This is a snapshot from my 5*, on-demand video course The Cash Flow Masterclass. Visit my website to enroll for lifetime access or watch a free webinar to learn more strategic cash flow insights. ----------------------๐ฏ Join 100 million and Follow Me for Strategic Finance & Business InsightsโถVisit my website for 5* masterclasses, checklists and cheat sheets๐ Subscribe here for your welcome gift: https://lnkd.in/eC_ihy6yโป ๐๐ข๐ค๐, ๐๐จ๐ฆ๐ฆ๐๐ง๐ญ, ๐๐๐ฉ๐จ๐ฌ๐ญ to share and help your network
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Oana Labes, MBA, CPA
Transformative Finance Strategist, Coach & Speaker | Empowering CEOs & CFOs to Win with Decision-Ready Dashboards, Finance-Ready Strategies and Boardroom-Ready Reports | Founder & President, Financiario
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Oana Labes, MBA, CPA
Transformative Finance Strategist, Coach & Speaker | Empowering CEOs & CFOs to Win with Decision-Ready Dashboards, Finance-Ready Strategies and Boardroom-Ready Reports | Founder & President, Financiario
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The global economy is expected to remain uncertain throughout 2024, with over half of chief economists anticipating a weakening. How about you? How do you feel about the economy in 2024?
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Oana Labes, MBA, CPA
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The Cash Flow Cheat SheetBecause Cash is not King ๐Cash Flow is. --------๐ฏ๐๐๐ฅ๐ฉ ๐ฆ๐ ๐ฌ๐ฉ๐ซ๐๐๐ ๐ญ๐ก๐ ๐ค๐ง๐จ๐ฐ๐ฅ๐๐๐ ๐ ๐ฐ๐ข๐ญ๐ก ๐ญ๐ก๐ข๐ฌ ๐ ๐ซ๐๐ ๐๐ก๐๐๐ญ ๐๐ก๐๐๐ญ: ๐ฅ๐ข๐ค๐, ๐ฌ๐ก๐๐ซ๐ ๐๐ง๐ ๐๐จ๐ฆ๐ฆ๐๐ง๐ญ!โฌโฌโฌ๐Get this cheat sheet and many others in my weekly newsletter๐ Sign up and get a bonus sheet pack as a welcome gift: https://lnkd.in/eC_ihy6yโฌโฌโฌ--------Cash Flow intelligence is critical for business success.โฆ๏ธ It helps you identify potential cash shortfalls.โฆ๏ธ It helps you take proactive measures to address them.โฆ๏ธ It helps you strategically manage cash flow to support long-term goals.โฆ๏ธ It helps you avoid insolvency and financial distress.๐ ๐๐๐ซ๐ ๐ข๐ฌ ๐ฐ๐ก๐๐ญ ๐๐ก๐ ๐๐๐ฌ๐ก ๐ ๐ฅ๐จ๐ฐ ๐๐ก๐๐๐ญ ๐๐ก๐๐๐ญ ๐ข๐ง๐๐ฅ๐ฎ๐๐๐ฌ:๐ฏ The 5 Types of Cash Flows compared, with their components๐ฏ The Direct vs. Indirect Cash Flow comparison๐ฏ 10 critical Cash Flow Ratios from which to choose your KPIs๐ฏ The Cash Conversion Cycle Diagram + Formula๐ฏ The 3 Main Cash Flow Drivers and 30 sub-drivers๐ฏ The difference between EBITDA and (Operating) Cash Flow๐ฏ The 5 Steps to Manage your Cash Flow๐ฏ The Cash Inflows and Outflows๐ฏ The relevant and incremental Cash Flows in Capital Budgeting๐ฏ The 16 Cash Flow Mistakes to Avoid๐ฏ The Revenue to Cash Waterfall๐ฏ The 15 Benefits of Effective Cash Flow ManagementUse this Cheat Sheet to improve your cash flow knowledge.And help others to the same.What would you add?--------------๐ฏ Join 100 million and Follow Me for Strategic Finance & Business InsightsโถVisit my website for 5* masterclasses, checklists and cheat sheets๐ Subscribe here for full res cheat sheet: https://lnkd.in/eC_ihy6yโป ๐๐ข๐ค๐, ๐๐จ๐ฆ๐ฆ๐๐ง๐ญ, ๐๐๐ฉ๐จ๐ฌ๐ญ to share and help your network
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Oana Labes, MBA, CPA
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EBITDA gets adjusted all the time. But Adjusted EBITDA is still not cash. โฌโฌโฌ๐Get this infographic and many more strategic finance gems in my weekly newsletter. Sign up for The Finance Gem ๐ and get my cheat sheet pack as a welcome gift here: https://lnkd.in/eC_ihy6yโฌโฌโฌHere are the 20 most common adjustments to be aware of: 1// Provisions and ReservesGuarantees. Future tax obligations. Asset Retirement Obligations. Asset impairment.๐ฏ These are potential future cash payment obligations, but while they shouldnโt reduce your current EBITDA, the future changes in their associated balance sheet accounts might.2// Non-operating income๐ฏ This is usually passive income which isnโt related to your companyโs core operations.๐ฏ If your company isnโt actively in the business of generating that income, it shouldnโt be part of your EBITDA.3// Unrealized gains or losses๐ฏ These are increases or decreases in the value of an asset or a liability that you havenโt yet sold or settled.๐ฏ Paper gains and losses donโt belong in EBITDA.4// One-time revenue or expenses๐ฏThese are the result of non-recurring transactions.๐ฏ If they arenโt repeatable and the objective is to assess the economic value of recurring cash flows, they may not belong in EBITDA.5// Foreign exchange gains or losses๐ฏ These may be the result of foreign exchange transactions outside your companyโs core operations. ๐ฏ Alternatively, if your business is carried out in international markets, FX gains and losses definitely belong in your companyโs EBITDA.6// Goodwill impairment7// Asset write-downs8// Litigation or insurance expenses outside the regular course of business.๐ฏ These are the result of non-recurring transactions such as one-time lawsuits, large financing deals or outlier commercial contracts.9// Excessive Owner compensation 10// Share-based compensation11// Below Market Compensation12// Personal Expenses13// Personal Travel and Entertainment Expenses14// Pension Expenses15// Professional Fees16// Aggressively expensed/capitalized items17// Fair Market Rent18// Tax Minimization Strategies19// Severance Costs 20// Percentage Of Completion Revenues๐ฏ This includes the revenues you recognized on long-term contractual engagements based on the percentage of costs incurred relative to the total estimated contractual costs. ๐ฏ Your high interim EBITDA on Percentage of Completion contracts is always at risk of reversing into losses resulting from underestimated project costs.โก๏ธโก๏ธโก๏ธ Get the complete list breakdown in this Saturday issue of The Finance GemWhat would you add?______________________________________________________โถVisit my website for 5* finance masterclasses, checklists and cheat sheetsโ Follow me for strategic finance, business, and cash flow insights๐Grab my viral Finance infographics: https://lnkd.in/eC_ihy6yโป ๐๐ข๐ค๐, ๐๐จ๐ฆ๐ฆ๐๐ง๐ญ, ๐๐๐ฉ๐จ๐ฌ๐ญ to share with your network โป
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