Pieter Slegers on LinkedIn: 12 Financial Statement Cheat Sheets everyone should know 10 Profitability… | 25 comments (2024)

👎 37 Of the Worst Corporate M&A Flops 👎Deal failures of gigantic companies.▪️ Sears and Kmart▪️ Myspace and News Corp▪️ Google and Nest▪️ Zynga and OMGPOP▪️ Yahoo and Tumblr▪️ Sprint and Nextel…There are examples of some of the biggest M&A flops in recent decades.The failure rate of mergers and acquisitions is somewhere between 70% and 90%, so these examples shouldn’t be a surprise.BUT…The brand recognition these companies carry makes one realize how challenging it is to pull off a successful M&A deal.The top three most common reasons for M&A failure are:1️⃣ Value destruction2️⃣ Poor communication3️⃣ Cultural differencesCheck out the reasons why these major corporate deals failed, including information on the date and valuation, in the document attached below. 👇The deals are arranged chronologically, starting from the most recent ones.What are your thoughts on these corporate M&A flops?Serial Entrepreneur & Investor Helping Startups Become Unstoppable – David HauserSource: CB Insights__💡Download 50 more investment insights like this one here: https://lnkd.in/epJNgDvz

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Financial Ratios Handbook👇This is a compilation that includes...✳️ Profitability RatioA. ReturnReturn on Equity Return on Assets Return on Capital Employed B. MarginGross Margin Ratio Operating Profit Margin Net Profit Margin✳️ Leverage RatioDebt-to-Equity Ratio Equity Ratio Debt Ratio ✳️ Efficiency RatioAccounts Receivable Turnover Ratio Accounts Receivable Days Asset Turnover Ratio Inventory Turnover Ratio Inventory Turnover Days✳️ Liquidity RatioA. AssetCurrent Ratio Quick Ratio Cash Ratio Defensive Interval RatioB. Earnings Times Interest Earned Ratio C. Cash Flow Times Interest Earned (Cash Basis) Ratio CAPEX to Operating Cash Ratio Operating Cash Flow Ratio✳️ Valuation RatioA. Price Price-to-Earnings RatioB. Enterprise ValueEV/EBITDA Ratio EV/EBIT Ratio EV/Revenue Ratio Source: Yashika Vatsa📚If you enjoyed this piece, please hit the “Like” button. Thank you for your support!__💡Download 50 more investment insights like this one here: https://lnkd.in/epJNgDvz

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Ratios everyone should know to be a successful investor.1️⃣ Liquidity and efficiency▪️Current ratio: short-term debt-paying ability▪️Acid-test ratio: immediate short-term debt-paying ability▪️Accounts receivable turnover: Efficiency of collection▪️Inventory turnover: Efficiency of inventory management▪️Days' sales uncollected: Liquidity of receivables▪️Days' sales in Inventory: Liquidity of inventory▪️Total asset turnover: Efficiency of assets in producing sales2️⃣ Solvency▪️Debt ratio: Creditor financing and leverage▪️Equity ratio: Owner financing▪️Debt-to-equity ratio: Debt versus equity financing▪️Times interest earned: Protection in meeting interest payments3️⃣ Profitability ▪️Profit margin ratio: Net income in each sales dollar▪️Gross margin ratio: Gross margin in each sales dollar▪️Return on total assets: Overall profitability of assets▪️Return on common shareholders' equity: Profitability of owner investment▪️Book value per common share: Liquidation at reported amounts▪️Basic earnings per share: Net income per common share4️⃣ Market Prospects▪️ Price-earnings ratio: Market value relative to earnings▪️ Dividend yield: Cash returns per common share📚If you enjoyed this piece, please hit the “Like” button. Thank you for your support!__💡Download 50 more investment insights like this one here: https://lnkd.in/epJNgDvz

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Mastering time managementThe ultimate cheat sheet to increase your productivityA fantastic visual made by Victoria Repa1️⃣ Eat that frogDo the most important & difficult tasks first thing in the morning.Works well for people who struggle with procrastination.2️⃣ Pomodoro25 minutes of wor, 5-minute break, and then a longer break.Works well for people who struggle with distractions.3️⃣ 2-minute ruleIf a task can be completed in 2 minutes or less, do it right away.Works for boosting productivity and reducing procrastination.Credits: Victoria Repa____💡 Did you like this? Receive my free Investing E-book here: https://lnkd.in/ebvU2Exh

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7 Personal Finance RulesTo help you save money1) Rule of 722) 100- Age Rule3) 50-30-20 Rule4) 1st Week Rule5) 6X Emergency Fund6) 40% EMI Rule7) 25X Retirement Rule1) Rule of 72You know how long it takes to double your money?Divide your expected return by 72 to find out.Example: when your expected return is equal to 10% you double your money every 7.2 years (72/10).2) 100- Age RuleYou want to know how much % of your assets you should invest in equity?Subtract 100 by your ago to find out.Example: when you're 40 years old you should invest 60% of your assets in stocks.3) 50-30-20 RuleHere's how to budget your income:➡️ 50% Spend on needs (bills, education, transport, food etc)➡️ 30% on wants (Holidays, Movies, restaurants etc)➡️ 20% Savings and investments4) 1st Week RuleThe best way to create wealth is to pay yourself first.Invest 10-20% of your income and always put it aside in the first week of the month.5) 6X Emergency FundBefore you invest, make sure you have an emergency fund.Your emergency fund should be equal to 6x of your monthly income.If you earn $6k a month, your emergency fund should have $36k.6) 40% EMI RuleThe maximum loan you can take should not eat up more than 40% of your net monthly income.Do you earn $10k per month? In that case, you take a mortgage for a maximum $4k per month.7) 25X investment RuleThis rule says that you can think about retirement when you have funds worth 25 times your annual expenses.You need $50,000 per year to live? In that case, you should have at least $1.25 million to retire. ____💡 Did you like this? Receive my free Investing E-book here: https://lnkd.in/ebvU2Exh

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True wealthTrue wealth is having time to spend time with loved ones:Here are 10 things I wish I had known 10 years ago • Start Saving Early• Live Below Your Means• Invest Wisely• Avoid Debt, Especially High-Interest Debt• Emergency Fund• Financial Literacy• Passive Income• Goal Setting• Health is Wealth• Wealth is More Than Money__📚Get my free e-book which will be published on Amazon soon: https://lnkd.in/ebvU2Exh

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10 Growth KPIs1️⃣ Revenue Growth🎯 What? Measures the increase in revenue over a specific period, typically expressed as a percentage💡 Formula?Current Revenue - Previous Revenue / Previous Revenue × 1002️⃣ Customer Acquisition Cost (CAC)🎯 What?Calculates how much it costs to acquire each new customer💡 Formula?Total Cost of Sales and Marketing / Number of New Customers Acquired3️⃣ Customer Lifetime Value🎯 What?Assesses the total value a customer brings to the company throughout their entire relationship💡 Formula?Average Purchase Value × Average Purchase Frequency × Average Customer Lifespan4️⃣ Churn Rate🎯 What?Monitors the rate at which customers stop using or subscribing to your product or service💡 Formula?Number of Customers at the Start of the Period - Number of Customers at the End of the Period / Number of Customers at the Start of the Period5️⃣ Monthly Recurring Revenue (MRR)🎯 What?Tracks the predictable and recurring revenue generated💡 Formula?Average Revenue Per User × Number of Customers6️⃣ Market share🎯 What?Evaluates your company's portion of the total market in terms of revenue💡 Formula?Your Company's Sales / Total Market Sales × 1007️⃣ Net Promotor Score (NPS)🎯 What?Measures customer satisfaction and loyalty by asking how likely customers are to recommend your product or service to others💡 Formula?(% of Promoters) - (% of Detractors)8️⃣ Customer Satisfaction Score🎯 What?Measures the level of satisfaction that customers have with your product, service, or overall experience, typically measured through surveys💡 Formula?Number of Satisfied Responses / Total Responses × 1009️⃣ Customer Retention Rate🎯 What?Determines the percentage of customers who continue to use your product or service over time💡 Formula?Number of Customers at the End of the Period - Number of New Customers Acquired / Number of Customers at the Start of the Period × 100🔟 Gross Margin🎯 What?Calculates the percentage of revenue remaining after deducting the cost of goods sold (COGS), which reflects your profitability💡 Formula?Revenue - Cost of Goods Sold / Revenue × 100____📚 Did you like this? In that case you'll LOVE my free Financial Analysis Course here. Grab it here: https://lnkd.in/ewnHQ_Sw

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American Hedge Fund billionaire Bill Ackman is worth $4.3 billionWe can all learn a lot from himI compiled a 700-page PDF with all his public writingsA few key learnings?• When you want to become successful, don't bother being rejected at all• In investing, you're very good when you are right 60% of the times• Never make emotional investment decisions• Don't follow the crowd• When you believe you are right, stick to your plan• Experience is making mistakes and learning from them.• You can learn to invest by reading books• Trying to predict the market is a fool's game• The best investors have an entrepreneurial spirit• The best way to make money is to not lose money📚 You want to get the entire 700-page PDF and start learning? Grab it here: https://lnkd.in/eST2ZmdF

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Adjusted EBITDA 🆚 Free Cash FlowFree Cash Flow is all what matters in the endI'll explain everything in less than 2 minutes1️⃣ What is free cash flow?The free cash flow of a company is equal to all the cash that enters a company minus all the cash that leaves a company over a certain period.You can calculate it as follows:Free cash flow = operating cash flow - CAPEXThe operating cash flow measures the amount of cash generated by a company’s normal business operations.The capital expenditures (CAPEX) show how much money a company has used to maintain or buy physical assets.2️⃣ What can a company do with its FCF?The company can do different things with its free cash flow:▪️ Reinvest for organic growth▪️ Pay down debt▪️ Acquisitions and takeovers (M&A)▪️ Paying out dividends▪️ Buying back shares3️⃣ FCF MarginThis metric indicates how much cash a company is generating per dollar in sales.FCF margin = (free cash flow/sales)Visa for example has a free cash flow margin of 60.2%.This means that for every $100 in sales, Visa generates $60.2 in pure cash.4️⃣ FCF > Net IncomeEarnings are an opinion, cash is a fact.While earnings are an accounting metric, free cash flow looks at the money that actually entered and left the firm over a certain period.5️⃣ FCF ConversionThe more earnings are translated into. FCF, the better.FCF Conversion = (free cash flow / net earnings)Seek for companies with a FCF conversion of at least 85%.6️⃣ Free cash flow yieldThe free cash flow yield (FCF Yield) of a company is a great way to look at the valuation of a company.Free cash flow yield = (Free cash flow per share/ stock price)The higher this ratio, the cheaper the stock.____💡 Did you like this? Receive my free Financial Analysis Course here: https://lnkd.in/ewnHQ_Sw

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The Berkshire Reading ListEveryone at Berkshire is recommended to read these books: Investing1. Intelligent Investor – Graham2. Berkshire Hathaway Shareholder Letters – Buffett3. The Little Book That Builds Wealth: The Knockout Formula for Finding Great Investments – Dorsey4. Inside the Investments of Warren Buffett: Twenty Cases – Lu5. Margin of Safety – Klarman6. Measuring the Moat – Mauboussin7. Superforecasting – Tetlock8. Value Investing – Greenwald9. Poor Charlie’s Almanac – Kaufman10. The Most Important Thing – Marks11. Psychology of Human Mis-judgement – Munger12. The Outsiders – Thorndike13. Principles – Dalio14. Quality Investing – Cunningham15. Why Moats Matter – Collins and BrilliantOperating & Management16. 7 Powers – Helmer17. High Output Management – Grove18. Time, Talent, and Energy – Garton19. Managing to Learn – Shook20. Lessons from the Titans – David21. Dream Big – Correa22. Common Stocks and Uncommon Profits – Fisher23. Double Your Profits – Fifer24. Competitive Advantage – Porter25. Playing to Win – Lafley26. Competition Demystified – Greenwald27. Billion Dollar Lessons – Carroll and Mui28. Radical Candor – Scott29. What Got You Here Won’t Get You There – Goldsmith30. Who – Smart and Street31. The Lean Startup – Ries32. The Toyota Way – Liker33. Drive – Pink____💡 Did you like this? In that case, you'll love the summary I made from reading ALL public writings of Warren Buffett. It's like a free e-book: https://lnkd.in/eAt_--Xs

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