Data & Finance for Work & Life
Finance content for professional development.
What is the value of a company? Strictly speaking, company value is equal to equity on the balance sheet (aka book equity value). After all, equity is equal to total assets minus total liabilities, and it makes sense that a company worth its net assets — right? Not exactly. Net asset value ignores several key […]
What is enterprise value (EV) used for? (& Why It’s Important) Read More »
So you’re an accountant and you want to become a financial analyst? First thing’s first: know you have a huge advantage with a background in debits & credits. Many financial analysts don’t bother to understand double-entry accounting at all. On the other hand, you may find it difficult to conceptualize forward-looking, predictive analytics that financial
11 Steps to Transition from Accountant to Financial Analyst Read More »
If you’re new to finance, you may be wondering about the hype around so-called “financial statements.” To their users, financial statements are creative, holistic, and efficient representations not only of a company’s financial performance, but also its innermost business mechanics. Based on financial statements alone, users can deduce company performance, efficiency, competitiveness, and prospects. And
Financial Statements & their Utmost Importance to Users Read More »
Also known as big-ticket items, fixed assets are the money-making gears of a company’s financial makeup. They’re long-term, can be intangible or intangible, and can be physical or non-physical. At the accounting level, they’re loaded onto the balance sheet upon delivery. Over the course of their lives, fixed assets are recorded on the income statement
Fixed Assets vs Total Assets: Difference & a Healthy Ratio Read More »
Roll forwards are a critical part of accounting consistency and integrity. You may have discovered roll forwards whilst reviewing general ledger transactions, or while exploring methods of accounting reconciliation. A roll forward is a simple concept. However, it has become an umbrella term that’s used to describe different accounting activities. In this article, we’ll clearly
Roll Forward in Accounting: Definition, Types, & Examples Read More »
Convertible loans and options intimidate many people, but they’re less complex than they seem. In the context of company share counts, they have a dilutive effect. This is due to the standard Earnings per Share (EPS) metric, which is net income divided by total shares. If there are convertible loans and other options that could
Convertible Loan & Stock Option Dilution: Examples for FDSO Read More »
Cash flow management is the lifeblood of all sizable businesses. Most companies use accounting software or ERPs to project short term cash flows based on the values of sales & purchases made on credit. However, predicting long term cash flows (>1 quarter into the future), requires manual analysis, since accountants have not provided the ERP
3 & 12 Month Cash Flow Projection: Excel Guide & Template Read More »
Cash is king — financial analysts and accountants know this well. But when a company grows to more than its founding team, understanding where cash is disbursed and received is not an easy task. One way to tackle this is to directly track all cash transactions, such as receipts from customers or payments to employees,
Excel Guide: How to Prepare Cash Flows with the Indirect Method Read More »
“Lenders” and “creditors” are an essential part of the economy. The terms represent the same underlying idea. And yet, a small survey of my colleagues revealed that some consider them opposites. It’s easy to see why: though they represent the same concept, we often use them in opposite situations. The purpose of this article is
Lender vs Creditor: What’s the Difference? Read More »
The term “stakeholder” has gained popular use in the past decade, but the principle behind the term is as old as capitalism. A stakeholder is an entity or individual that has an interest in the success of a project. While that interest may be moral, sentimental, or familial, more often than not, it’s financial. This
Is a lender a stakeholder? Read More »
