What drives your cash flow?

There are 3 Main Cash Flow Drivers you should Know. Operating Cash flows into your company from 3 main sources:

☑️ Revenue Growth

☑️ Operating Profits

☑️ Working Capital efficiency

How does it work?

Operating Cash Flow is the cash generated from a company’s core business activities.

The 4 Cs in CFO

The Chief Financial Officer role is all about Capital.

Capital Sourcing
Capital Allocation
Capital Reporting
Capital Management 1️⃣ Capital Sourcing:

o Diversify sources: Mix equity, debt, and alternative instruments to enhance financial stability.

o Build investor relationships: Cultivate connections with a diverse investor base to secure flexible funding options.

Budgets vs. Forecasts vs. Projections

They're not the same. And you probably need them all. 🎯 Budgets:

➡️ Align spending plans with revenue generation and strategic objectives.

➡️ Set the baseline for performance metrics.

➡️ Serve as a control mechanism for effective cost management.

🎯Forecasts:

Top 10 EBITDA Flaws You Should be Aware of and Beware 1️⃣ EBITDA is not a standardized GAAP metric, allowing for manipulation.

☑️ There's no standardized formula for calculation, leading companies to calculate it in a way that benefits them the most

Everyone is talking about SWOT, PESTEL, VRIO and Porter's 5 Forces.

But nobody is showing you how to use them.

Here's a checklist with 12 Essential Strategic Frameworks you Need to Know.

And the steps to take so you can actually use them in your organization.

⏬⏬⏬ ➡️ Start with PESTEL Analysis

- Scan your macro environment.

- Evaluate political, economic, and other pivotal factors.

- Assess broad influences that can shape your business direction.

➡️ Dive into Porter's Five Forces

- Analyze your competitive landscape.

The 8 Critical EBITDA Drivers Leaders Must Know EBITDA is also widely used in Valuations, Performance Management, Comparative Analysis and Commercial Financing.

So if you want to improve this metric, avoid making those mistakes, and manage these 8 critical drivers:

1️⃣ Revenue Growth

Top 10 Excel features for CFOs

10x your productivity and impact with my Excel power cheat sheet. I spent thousands of hours in Excel and built lots of complex models.

But I use Excel for financial intelligence and strategic decision making,
To help my clients drive their desired results, financing & valuations.

Profit is not Cash Flow >> There are 3 types of business activities and each of them can absorb or release cash into a business.

♦️ operating activities

♦️ investing activities

♦️ financing activities

>> Here’s what you need to know about ♦️ cash flow from operating activities:

NOPAT vs. EBIT

Which one should you use?

How are they different?

Do you need both? 🎯NOPAT and EBIT are frequently used to evaluate a company's profitability.

However, they are calculated differently and serve distinct purposes.

↪️ NOPAT (Net Operating Profit After Tax) represents a company's operating profit after tax deductions.

Your Business Problems have Solutions.

Here’s how to find them. Most business problems fall into one of 3 main areas:

1️⃣ Profitability

2️⃣ Cash Flow

3️⃣ Growth

Use financial analysis techniques to identify and address them.

1️⃣ Profitability Issues

🎯 Gross Profit Margin Analysis: (Gross Profit / Revenue) x 100

Accounting vs. Finance Careers

Hint: they're not at all the same thing.

And crossing over from one to the other isn't easy. Accounting and Finance are not the same.

They are distinct functions in every company.

And they each require a different focus and skills.

Accounting focuses on record keeping, reporting & compliance.

Why Do Companies Really Fail?

It’s not what you think. Most people believe businesses fail because of things like:

↳ Lack of funds
↳ Poor marketing
↳ Economic downturns
↳ Competition

But here’s the truth:

These aren’t the real reasons.
The actual causes are far more internal and, most importantly, controllable.

CEO's need Growth.

And Growth needs Strategic Financial Planning.

If you’re a CEO, this should be on your agenda.

If you’re not a CEO, this is on your CEO’s agenda.

Which means it’s now on yours. There are two kinds of growth: Organic and Inorganic.

🎯 Organic growth is built from within, leveraging existing capabilities to incrementally increase market share and revenue.

VS.

CEO vs. CFO

Most CEOs can use more financial acumen.
Many CFOs can benefit from a more strategic mindset.

Companies need both strategic foresight and financial acumen. 1️⃣ The CEO sets the vision

➡️Role: Defines the company's strategic direction and long-term goals.

➡️Focus: Cultivates company culture and drives the overall vision.

➡️Decisions: Makes broad strategic business choices.

How to Analyze a Cash Flow Statement in 10 Simple Steps

The Ultimate Guide. 1️⃣ Start with Net Income

Examine the P&L first because that is where indirect cash flow statements start

Understand the sustainability and reliability of earnings by examining the revenue and expenses that drive Net Income

2️⃣ Non-Cash Adjustments

20 Reasons Why your Margin is Dropping 1. Rapid Scale of Operations

- Rapid growth often means scaling operations faster than management can keep pace, leading to inefficiencies.

2. Product Mix Shifts

- New products often come with higher initial production and marketing costs, diluting margins.

EBITDA vs. EVA vs. RI

How are you measuring profitability?

And is your profitability sufficient to cover

🎯 the opportunity cost of equity?
🎯 the opportunity cost of debt?
🎯 or both? 🎯 If your measure of profit is

❌EBITDA, you're not considering for the opportunity cost of any capital financing sources

❌ Residual Income (RI), you're only considering the opportunity cost of equity

Are you using EBITDA wrong?

EBITDA mistakes are costing companies millions in

🎯 reduced profitability
🎯 lost business value
🎯 failed acquisitions
🎯 credit downgrades
🎯 stalled growth
🎯 bankruptcy risk Here are 10 EBITDA mistakes to learn if you want to keep yourself and your business out of trouble.

1️⃣ Ignoring Capital Expenditures

☑️ EBITDA excludes capital expenditures, potentially masking how capital-intensive a business really is.

2️⃣ Overlooking Debt Service

5 Cash Flow Ratios You Should Know and Monitor 🎯 Cash flow ratios help you assess your company's financial health, operating efficiency, liquidity and performance.

🎯 The 3 main cash flow drivers are Revenue, Operating Margin, and Operational Efficiency and each of these drivers should get captured into a ratio

Short-term vs. Long-term Business Financial Planning

Here’s what they are, how they work and why you need both. 🎯 Short-term Financial Planning

➡️ focused on here and now - the immediate financial horizon, typically up to a year

➡️ key areas of concern include:

>> Capital Management: juggling assets and liabilities efficiently

A CFO has a tough puzzle to solve. Do you want revenue growth, maximized profit & optimal capital allocation?

Strategic finance insights for competitive advantage & market leadership?

Investor support from transparent and strategic financial management?