Long Term Mindset on LinkedIn: 10 Balance Sheet KPIs every FP&A leader should know Post credit by:… (2024)

KPIs, or Key Performance Indicators, can be immensely valuable for businesses because they provide a clear and measurable way to track progress and evaluate success. Here are a few ways in which KPIs can help businesses:Goal setting and tracking: KPIs help businesses to set clear and specific goals, and then track progress towards those goals. This ensures that everyone in the organization is aligned towards a common objective, and can work together to achieve it.Performance monitoring: KPIs provide a way to monitor the performance of various aspects of the business, such as sales, marketing, customer satisfaction, employee productivity, and more. This allows managers to identify areas that need improvement and take corrective actions.Decision-making: KPIs provide data-driven insights that can inform business decisions. For example, if a KPI indicates that customer satisfaction is declining, managers can investigate the cause and take steps to address it.Accountability: KPIs help to hold individuals and teams accountable for their performance. When everyone is aware of the KPIs they are responsible for, it creates a sense of ownership and responsibility, which can lead to improved performance.Overall, KPIs provide a way to measure progress, identify areas for improvement, and make data-driven decisions, all of which can help businesses to be more successful.

KPIs provide you with a general picture of the overall health of your business. Acquiring insights afforded by your KPIs allows you to be proactive in making necessary changes in under-performing areas, preventing potentially serious losses whilst ensuring long-term sustainability of your company's operating model, and helps increase your business's value as an investment.#businessanalytics #strategicanalysis #businessperformance #fpa #ratioanalysis

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📊 Unlocking Financial Insights: EBITDA vs. Adjusted EBITDA 📊In the realm of finance, two terms frequently bandied about are EBITDA and Adjusted EBITDA. Let's embark on an exhilarating journey to unravel the distinctions between these metrics and their pivotal role in evaluating a company's financial prowess.🔍 EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization):Picture this—EBITDA, a financial powerhouse! It showcases a company's operating profitability by stripping away interest expenses, taxes, depreciation, and amortization. This magical metric illuminates the core of a company's operations, making comparisons across entities and industries a breeze.📝 Adjusted EBITDA:But wait, there's more! Enter Adjusted EBITDA, the chameleon of financial metrics. It builds upon EBITDA's foundation and adapts to fit specific circ*mstances. This charismatic contender adjusts EBITDA further by excluding extraordinary expenses, one-time costs, stock-based compensation, or any other peculiar non-recurring items. By doing so, it paints a clearer picture of a company's ongoing performance, untangling the web of non-operational influences.📈 Key Differences:1️⃣ Inclusions and Exclusions: EBITDA discards interest, taxes, depreciation, and amortization, while Adjusted EBITDA takes it up a notch by shedding additional non-recurring or non-operational items.2️⃣ Comparability: EBITDA sets the stage for comparisons, focusing on the heart of operations. Adjusted EBITDA takes center stage by eliminating exceptional or one-time items, allowing for clearer cross-company and cross-industry evaluations.3️⃣ Decisive Insights: With Adjusted EBITDA in hand, you possess a finely-tuned lens through which to view a company's recurring earnings potential. It serves as your compass when making investment decisions, evaluating mergers and acquisitions, or exploring debt financing.💡 Keep in mind:While EBITDA and Adjusted EBITDA are veritable financial powerhouses, they have limitations. Both metrics fail to account for working capital changes, capital expenditures, and interest expenses. Therefore, it's paramount to embrace a holistic approach, considering these metrics alongside other financial indicators to form a comprehensive financial picture.🔎 So, my intrepid finance enthusiasts, unleash your financial prowess, armed with EBITDA and Adjusted EBITDA, to decode the secrets of success in the dynamic world of finance!#Finance #EBITDA #AdjustedEBITDA #FinancialInsights #Investing #BusinessPerformance #investment #success

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The Cash Flow Cheat Sheet!!While the balance sheet is anatomy of the business, income statements its physiology, CASH FLOW is life blood of the business. 𝗨𝗻𝗱𝗲𝗿𝘀𝘁𝗮𝗻𝗱𝗶𝗻𝗴 𝗰𝗮𝘀𝗵 𝗳𝗹𝗼𝘄 𝗶𝘀 𝗲𝘀𝘀𝗲𝗻𝘁𝗶𝗮𝗹 𝗳𝗼𝗿 𝗲𝗳𝗳𝗲𝗰𝘁𝗶𝘃𝗲 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗺𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁, 𝗱𝗲𝗰𝗶𝘀𝗶𝗼𝗻 𝗺𝗮𝗸𝗶𝗻𝗴, 𝗮𝗻𝗱 𝗹𝗼𝗻𝗴-𝘁𝗲𝗿𝗺 𝘀𝘂𝘀𝘁𝗮𝗶𝗻𝗮𝗯𝗶𝗹𝗶𝘁𝘆:📈 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗠𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁Understand how money is moving in and out of your accounts, allowing you to effectively plan and manage your finances.📉 𝗕𝘂𝗱𝗴𝗲𝘁𝗶𝗻𝗴 𝗮𝗻𝗱 𝗣𝗹𝗮𝗻𝗻𝗶𝗻𝗴By tracking your cash inflows and outflows, you can anticipate periods of surplus or deficit, make informed decisions, and adjust your spending and investment strategies accordingly.📈 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗢𝗽𝗲𝗿𝗮𝘁𝗶𝗼𝗻𝘀Maintain liquidity and avoid cash shortages that can disrupt operations.📉 𝗖𝗿𝗲𝗱𝗶𝘁𝘄𝗼𝗿𝘁𝗵𝗶𝗻𝗲𝘀𝘀Lenders and investors often assess the cash flow of individuals and businesses when making lending or investment decisions. 📉 𝗥𝗶𝘀𝗸 𝗠𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁Anticipate and address cash flow gaps, manage debt obligations, and build financial reserves to handle unforeseen circ*mstances or economic downturns.🚀 𝗛𝗲𝗹𝗽 𝗺𝗲 𝘀𝗵𝗮𝗿𝗲 𝘁𝗵𝗶𝘀 𝗲𝘀𝘀𝗲𝗻𝘁𝗶𝗮𝗹 𝗶𝗻𝘀𝗶𝗴𝗵𝘁𝘀 𝘄𝗶𝘁𝗵 𝘁𝗵𝗶𝘀 𝗙𝗥𝗘𝗘 𝗖𝗵𝗲𝗮𝘁 𝗦𝗵𝗲𝗲𝘁.👍 👍 👍 𝗟𝗶𝗸𝗲, 𝗦𝗵𝗮𝗿𝗲 𝗮𝗻𝗱 𝗖𝗼𝗺𝗺𝗲𝗻𝘁 𝘀𝗼 𝘁𝗵𝗶𝘀 𝗽𝗼𝘀𝘁 𝗰𝗮𝗻 𝗿𝗲𝗮𝗰𝗵 𝗽𝗿𝗼𝗳𝗲𝘀𝘀𝗶𝗼𝗻𝗮𝗹𝘀 𝘄𝗵𝗼 𝘄𝗮𝗻𝘁 𝘁𝗼 𝗹𝗲𝗮𝗿𝗻 𝗺𝗼𝗿𝗲 𝗮𝗯𝗼𝘂𝘁 𝗰𝗮𝘀𝗵 𝗳𝗹𝗼𝘄 𝗺𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁.𝗗𝗼 𝘆𝗼𝘂 𝗹𝗶𝗸𝗲 𝘁𝗵𝗲 𝗱𝗼𝘄𝗻𝗹𝗼𝗮𝗱𝗮𝗯𝗹𝗲 𝗣𝗗𝗙 𝘃𝗲𝗿𝘀𝗶𝗼𝗻?👉 𝗖𝗼𝗺𝗺𝗲𝗻𝘁 𝘁𝗵𝗶𝘀 𝗽𝗼𝘀𝘁 𝗶𝗻 𝗜 𝘄𝗶𝗹𝗹 𝘀𝗵𝗮𝗿𝗲 𝗱𝗼𝘄𝗻𝗹𝗼𝗮𝗱 𝗹𝗶𝗻𝗸 𝗶𝗻 𝗻𝗲𝘅𝘁 𝟮𝟰 𝗵𝗼𝘂𝗿𝘀. 🧿 𝗛𝗲𝗿𝗲 𝗶𝘀 𝘄𝗵𝗮𝘁 𝗱𝗼𝗲𝘀 𝘁𝗵𝗲 𝗖𝗮𝘀𝗵 𝗙𝗹𝗼𝘄 𝗖𝗵𝗲𝗮𝘁 𝗦𝗵𝗲𝗲𝘁 𝗶𝗻𝗰𝗹𝘂𝗱𝗲:▶️ Definitions of key terms▶️ Cash flow statement presentation▶️ Direct vs indirect cash flow method▶️ US GAAP comparison note▶️ 18 Cash flow drivers▶️ Cash flow vs EBIT▶️ Cash conversion cycle explained▶️ Cash flow in valuations▶️ 6 Cash flow forecast stepsStart collecting my cash flow materials and other resources.𝗛𝗲𝗹𝗽 𝗺𝗲 𝘀𝗽𝗿𝗲𝗮𝗱 𝘁𝗵𝗶𝘀 𝗙𝗥𝗘𝗘 𝗖𝗵𝗲𝗮𝘁 𝗦𝗵𝗲𝗲𝘁 𝘁𝗼 𝗵𝗲𝗹𝗽 𝗼𝘁𝗵𝗲𝗿𝘀.I missed something? Let me what you wouldadd, and I will approach that in the new version.👉 𝗟𝗶𝗸𝗲, 𝗖𝗼𝗺𝗺𝗲𝗻𝘁, 𝗥𝗲𝗽𝗼𝘀𝘁.-------------------------I am Bojan Radojicic Senior Partner in finance & tax international firm.➕ 𝗙𝗼𝗹𝗹𝗼𝘄 𝗺𝗲 for more finance, accounting, reporting, M&A, IFRS and valuation 𝗙𝗥𝗘𝗘 𝗿𝗲𝘀𝗼𝘂𝗿𝗰𝗲𝘀.Ring the 🔔 at the right of my profile and don't miss my new posts.

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🧿 𝗛𝗲𝗿𝗲 𝗶𝘀 𝘄𝗵𝗮𝘁 𝗱𝗼𝗲𝘀 𝘁𝗵𝗲 𝗖𝗮𝘀𝗵 𝗙𝗹𝗼𝘄 𝗖𝗵𝗲𝗮𝘁 𝗦𝗵𝗲𝗲𝘁 𝗶𝗻𝗰𝗹𝘂𝗱𝗲:▶️ Definitions of key terms▶️ Cash flow statement presentation▶️ Direct vs indirect cash flow method▶️ US GAAP comparison note▶️ 18 Cash flow drivers▶️ Cash flow vs EBIT▶️ Cash conversion cycle explained▶️ Cash flow in valuations▶️ 6 Cash flow forecast steps

Interesting insights on EBITDA & Adjusted EBITDA 💯💯💯

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Guidepost to,running a business or after starting a new one. Will adopt this.

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Let’s dive into the Three Statement Model:A fundamental financial modeling framework used by businesses and analysts to evaluate a company's financial performance and outlook. It consists of three key financial statements: the Income Statement, the Balance Sheet, and the Cash Flow Statement. These statements provide a comprehensive view of a company's operational and financial activities, helping stakeholders make informed decisions.1. **Income Statement (Profit and Loss Statement):**- The Income Statement summarizes a company's revenues and expenses over a specific period, usually a quarter or a year.- It begins with the total revenue generated from sales and then deducts the cost of goods sold (COGS) to calculate the gross profit.- Operating expenses, including selling, general, and administrative expenses, are then subtracted to determine the operating profit (or loss).- Further adjustments, such as taxes and interest, lead to the net income, representing the company's profit after all expenses.2. **Balance Sheet:**- The Balance Sheet provides a snapshot of a company's financial position at a specific point in time.- It is divided into two sides: assets (what the company owns) and liabilities (what the company owes).- Assets include current assets (e.g., cash, accounts receivable) and non-current assets (e.g., property, equipment).- Liabilities consist of current liabilities (e.g., accounts payable) and long-term liabilities (e.g., loans, bonds).- The balance sheet adheres to the accounting equation: Assets = Liabilities + Equity.3. **Cash Flow Statement:**- The Cash Flow Statement outlines the sources and uses of cash over a given period, categorizing activities into operating, investing, and financing.- Operating activities include cash transactions related to the core business, such as sales and expenses.- Investing activities involve cash flows from buying or selling assets, such as investments or property.- Financing activities encompass cash transactions with the company's investors and creditors, including issuing or repurchasing stock and paying dividends.- The net change in cash and cash equivalents during the period is reconciled to the beginning and ending cash balances.Together, these three financial statements provide a comprehensive overview of a company's financial health, performance, and ability to generate and manage cash. Analysts and investors use the Three Statement Model to assess a company's viability, make investment decisions, and strategize for the future.Going ahead we’ll see the components of all three statements in detail.#financialmodeling #financialmarkets #equityresearch #fundamentalanalysis

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balance sheet

Balance Sheet SynonymsBalance Sheets do not have a universal layout.That's because management teams control the terms and categories they use in their financial statements.Here's the master list of words that management teams can use when creating their Balance Sheet:BALANCE SHEET:→Net Worth Statement→Financial Status Report→Statement of Financial Position→Statement of Financial ConditionCASH:→Cash on Hand→Cash Assets→Liquid Assets→Cash Reserves→Marketable SecuritiesACCOUNTS RECEIVABLES:→Receivables→Bills Receivable→Debtor Balances→Trade Receivables→Outstanding InvoicesINVENTORY:→Stock→Goods→Merchandise→Product Stock→GoodsOTHER CURRENT ASSET:→Deposits→Notes Receivable→Prepaid Expenses→Deferred Tax Assets→Short-term InvestmentsLONG TERM INVESTMENTS:→CDs→Bonds→Stocks→Pension Funds→Long-term Notes ReceivableGOODWILL:→Blue Sky Value→Excess Earnings→Purchased Goodwill→Consolidation Surplus→Business Reputation ValueOTHER LONG-TERM ASSETS→Intangible Assets→Deferred Tax Assets→Right-of-Use Assets→Long-Term Receivables→Property, Plant, and EquipmentPAYABLES:→Supplier Debt→Outstanding Bills→Unpaid Expenses→Accounts Payable→Accrued ExpensesSHORT-TERM DEBT:→Notes→Liquid debt→Current debt→Liquid debt→Liquid debt→Liquid debtImmediate debtOTHER SHORT-TERM LIABILITIES:→Notes Payable→Short-term Loans→Dividends Payable→Deferred Revenue→Income Taxes PayableLONG-TERM DEBT:→Senior Debt→Long-term Loans→Long-term Borrowings→Convertible notes→Long-term Bonds PayableOTHER LONG-TERM LIABILITIES:→Minority Interest→Pension Obligations→Deferred Tax Liabilities→Long-term Capital Leases→Long-Term Deferred RevenuePREFERRED STOCK:→Preferred Shares→Preference Shares→Preferred Equity→Convertible Preferred Stock→Senior EquityCOMMON STOCK:→Common Equity→Ordinary Shares→Founders' Shares→Common Shares→Additional Paid-In CapitalRETAINED EARNINGS:→Earned Surplus→Accumulated Earnings→Accumulated Profit→Accumulated Deficit→Accumulated Operating LossesTREASURY STOCK:→Own Shares→Treasury Shares→Reacquired Shares→Shares in Treasury→Share Repurchase***P.S. Want to learn more? Join me for a FREE webinar on Tuesday, December 19th at 12 PM EasternThe Investor's Guide to Financial StatementsClick here: https://lnkd.in/g3q5T3Bn

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