Financial Analysis

Making the Best of Bad Financial Results

Is there are way for making the best of bad financial results? I think there is. In fact, sometimes bad results can be the catalyst for major improvement.

When Bad is Good

First let me say I’m not really suggesting that bad results are good. No, the good I’m referring to has to do with Read the rest of this entry »

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Learn to Love Financial Data

What would you think if you heard someone say that company management should learn to love financial data? You might think they had lost their mind. Have they?

Attention Getter

Actually I used that question to get your attention. No, I don’t really expect the management of any company to get to love financial data. On the other hand, I do think Read the rest of this entry »

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Financial Checkpoints

For every business there are certain points in time that are ideal for assessing the progress of the business from a financial perspective. I think of these as financial checkpoints.

Just What is a Checkpoint?

For our purposes we can define a checkpoint as Read the rest of this entry »

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Real Assets

Can you identify real assets when you see them? This question may not be what you are thinking. This posting relates to a similar one called When an Asset is Not an Asset.

Aren’t All Assets Real?

Stop for a moment and consider some of the things categorized as assets on the balance sheets of various companies. These may include, among other items: Cash and Short-Term Investments, Accounts and Notes Receivable, Prepaid Expenses, Fixed Assets (Land and Buildings, Furniture and Equipment, Leasehold Improvements, etc.), Long-Term Investments, Patents, Goodwill, and other items.

Now, on the face of it there is really nothing wrong with Read the rest of this entry »

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Financial Measurements that Matter

In business we typically measure a lot of things, but when it comes to financial information are we making and utilizing financial measurements that matter?

What Does That Mean?

To understand what I’m referring, let’s look back at the posting Some Key Financial Indicators where we briefly considered Read the rest of this entry »

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A Financial Reckoning

Are your business finances in good shape or are you headed for a financial reckoning? As I observe the financial picture of our economy and in particular our government, I cannot help but wonder how long this way of operating can continue. Read the rest of this entry »

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Misleading Financial Indicators

What do crime statistics and business metrics have in common? I was recently reading about the possible manipulation of statistics for a city’s crime rates, and that got me to thinking about how a similar thing happens with a business’s financial indicators.

Like What?

Sometime a particular statistic is highly misleading. For example, a manager who is responsible for increasing sales may indeed be able to report that Read the rest of this entry »

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The Farce of Allocation

If you have a company with multiple product lines or divisions then you may have encountered the age-old difficulty involved in allocation of overhead. This is an area that often creates heated debate.

An Example

Imagine a company with two clear product lines, A and B. In this same company there are administrative roles that are handled by the corporate office, which has no direct connection to Read the rest of this entry »

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Actual Company Debt

Do you really know your actual company debt? This may seem like a silly question, but there is more to it than you may think. Let me explain.

Leases

There is a proposal from U.S. and international accounting regulators to change how a company should record and account for what is referred to as operating leases. Here I just want to consider the impact on the lessee. First, let’s look at some Read the rest of this entry »

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Part-Time CFO and Financial Vision

It is very common that resources of a small company are stretched. As a result, things like good financial information get overlooked. Too often this neglect leads to unnecessary pain. But there is a solution that is effective and affordable. The underlying issue is one of having the Read the rest of this entry »

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