[ { "source_file": "Accounting Explained Visually - eBook.pdf", "source_sha256": "3dc5f1494e5222e39447b586527b070c9c291e93a0e01787fbd8c6862f570a2a", "chunk": 1, "page_start": 1, "page_end": 6, "suggested_title": "ACCOUNTING", "situation": "learning-planning", "keywords": [ "accounting", "statement", "should", "financial", "sheet", "cash", "balance", "income" ], "key_lines": [ "Accounting is the language of business,", "This eBook contains fifty infographics that", "will help you better understand the", "Balance Sheet, Income Statement, and", "Balance Sheet: Warren Buffett’s Rules of Thumb" ], "closest_card": "cards/47-decision-heuristics-cheat-sheet.md", "similarity": 0.04965003757766878, "decision": "new-card-candidate", "text": "ACCOUNTING\n\nEXPLAINED\n\nVISUALLY\n\n50 SIMPLE INFOGRAPHICS THAT\n\nDEMYSTIFY FINANCIAL STATEMENTS\n\nBRIAN FEROLDI\n\nHello and Welcome!\n\nAccounting is the language of business,\n\nbut it’s an imperfect language.\n\nThis eBook contains fifty infographics that\n\nwill help you better understand the\n\nBalance Sheet, Income Statement, and\n\nCash Flow Statement.\n\nEnjoy!\n\nBrian Feroldi\n\n(Click The Icons To Connect)\n\nINDEX\n\nGENERAL ACCOUNTING\n\n13 Accounting Principles\n\nFundamentals of Accounting\n\nAccounting Cycle\n\nFinancial Statements - Cheat Sheet\n\nFinancial Statements Connections\n\nBALANCE SHEET\n\nBalance Sheet Overview\n\nBalance Sheet Synonyms\n\nQuestions to Ask\n\nHow To Analyze A Balance Sheet\n\nBalance Sheet: Warren Buffett’s Rules of Thumb\n\n4 Balance Sheet Ratios\n\nBalance Sheet Vs Income Statement\n\nBalance Sheet Vs Cash Flow Statement\n\nYellow Flags\n\nGreen Flags\n\nINCOME STATEMENT\n\nIncome Statement Overview\n\nIncome Statement Synonyms\n\nQuestions to Ask\n\nIncome Statement Rules of Thumb\n\n5 Key Metrics\n\nIncome Statement Vs. Cash Flow Statement\n\nHow The Income Statement & Balance Sheet Link\n\nYellow Flags\n\nGreen Flags\n\nCASH FLOW STATEMENT\n\nCash Flow Statement Overview\n\nCash Flow Statement Synonyms\n\nQuestions to Ask\n\n7 Cash Flow Ratios\n\nNet Income Vs Free Cash Flow\n\nAccrual vs Cash Accounting\n\nYellow Flags\n\nGreen Flags\n\nEBITDA vs Free Cash Flow\n\nOTHER ACCOUNTING\n\nGross Profit vs Gross Margin\n\n6 Depreciation Methods\n\nFinancial Statements: Warren Buffett’s Rules of Thumb\n\nDupont Analysis\n\n14 Profit Ratios Every Investor Should Know\n\nGAAP vs Non-GAAP - Cheat Sheet\n\nDebt Vs. Equity\n\nEBITDA Explained Simply\n\nKey Financial Ratios\n\n20 Most Confused Finance Terms\n\nCosts vs Expenses\n\nCash Conversion Cycle\n\nFinancial Statement Yellow Flags\n\nFinancial Statements Green Flags\n\nP&L Statement Visualized\n\nIFRS vs GAAP\n\nWorking Capital\n\nGENERAL\n\nACCOUNTING\n\n13 ACCOUNTING PRINCIPLES\n\nBY BRIAN FEROLDI\n\nACCOUNTING PRINCIPLES\n\nThe rules, benchmarks, and procedures in the accounting field companies should\n\nfollow while reporting financial statements. In the United States, the common set of\n\naccounting standards is GAAP (Generally Accepted Accounting Principles).\n\nECONOMIC ENTITY REVENUE RECOGNITION\n\nOwner & business are two different Revenue should be recognized using\n\nentities with separate liabilities. the accrual basis of accounting.\n\nCONSERVATISM CONSISTENCY\n\nWhen there are two acceptable\n\nThe usage of methods and principles\n\noptions for reporting, the less\n\nshould be consistent until another\n\nfavorable option should be chosen.\n\nmethod proves to be better.\n\nHISTORICAL COST FULL DISCLOSURE\n\nAll important information should be\n\nAssets should be recorded based on\n\ndisclosed within the financial\n\ntheir original purchased value.\n\nstatements or as a footnote.\n\nGOING CONCERN MATCHING CONCEPT\n\nBusiness is assumed to carry on\n\nAll debits should have a matching\n\nforever with no intention of\n\ncredit, and all credits should have\n\nliquidation.\n\na matching debit.\n\nMATERIALITY MONETARY UNIT\n\nTransactions that carry a monetary\n\nAny information which will have a\n\nvalue should be recorded in terms of\n\nsignificant impact should be\n\na monetary currency (Ex: Dollars)\n\nreported on the financial statements.\n\nRELIABILITY REVENUE TIMING\n\nTransactions should only be Revenues will be recognized at the\n\nrecorded that can be proven & have time of the transactions regardless of\n\nsignificant evidence. whether payment has been made.\n\nTIME PERIOD\n\nThere should be a standardized time period for the reporting of the\n\nfinancial statements (Ex: Monthly, Quarterly, or Annually)\n\nFollow Brian Feroldi on LongTermMindset.co\n\nFUNDAMENTALS OF ACCOUNTING\n\nBY BRIAN FEROLDI\n\nIs the procedure of data entry and recording, summarizing,\n\nACCOUNTING\n\nanalyzing, and then reporting the financial data.\n\nFIVE BASIC ACCOUNTING PRINCIPLES CATEGORIES OF ACCOUNTING", "proposal_file": "document-review/proposals-20260624-090104/001-accounting.md" }, { "source_file": "Accounting Explained Visually - eBook.pdf", "source_sha256": "3dc5f1494e5222e39447b586527b070c9c291e93a0e01787fbd8c6862f570a2a", "chunk": 2, "page_start": 6, "page_end": 11, "suggested_title": "REVENUE Revenue is recorded at the All Tangible & Intangible items", "situation": "learning-planning", "keywords": [ "balance", "income", "cash", "accounting", "time", "step", "sheet", "assets" ], "key_lines": [ "REVENUE Revenue is recorded at the All Tangible & Intangible items", "RECOGNITION time of the transaction. owned by the company.", "MATCHING Assets are recorded at their Amount the company owes", "PRINCIPLE acquisition cost. to others.", "HISTORICAL Fiscal Year Income is compared Net Worth of Company," ], "closest_card": "cards/47-decision-heuristics-cheat-sheet.md", "similarity": 0.04979369463243637, "decision": "new-card-candidate", "text": "REVENUE Revenue is recorded at the All Tangible & Intangible items\n\nASSETS\n\nRECOGNITION time of the transaction. owned by the company.\n\nMATCHING Assets are recorded at their Amount the company owes\n\nLIABILITY\n\nPRINCIPLE acquisition cost. to others.\n\nHISTORICAL Fiscal Year Income is compared Net Worth of Company,\n\nEQUITY\n\nCOST with Calendar Year Expense. Assets - Liabilities.\n\nFULL Full disclosure of all relevant Amount paid for purchases\n\nEXPENSE\n\nDISCLOSURE info is made available. made in the business.\n\nInformation in books should Amount earned by company\n\nOBJECTIVITY INCOME\n\nbe true, relevant, & accurate. from sale of goods.\n\nJOURNAL FINANCIAL STATEMENTS\n\nJournal Entries consist of Debits\n\nIncome Statement: shows profit or loss\n\n& Credits, the totals of which\n\nduring the period.\n\nshould be equal\n\nVs\n\nBalance Sheet: a company’s assets,\n\nliabilities, and equity at a particular time.\n\nLEDGER\n\nJournal are then transferred to Statement of Cash Flow: shows the inflow\n\nappropriate Ledger Accounts and outflow of cash during period.\n\nDOUBLE ENTRY • Each Accounting Entry will hare two sides - Debit and Credit.\n\nSYSTEM\n\n• The accounts used will be from any of above five categories.\n\nTHREE FIELDS OF ACCOUNTING TYPES OF ACCOUNTS\n\n1. Financial Accounting: Preparing\n\nConsists of tangible and\n\nthe Financial Statements. REAL\n\nintangible assets.\n\n2. Managerial Accounting: Preparing\n\nAccounts for individual,\n\nreports for internal use.\n\nPERSONAL\n\ngroup, entity, bank etc.\n\n3. Cost Accounting: Measuring the\n\nAccounts related to Gain,\n\nperformance of resources.\n\nNOMINAL\n\nLoss, Expense & Income.\n\nFollow Brian Feroldi on LongTermMindset.co\n\nAACCCCOOUUNNTTIINNGG CCYYCCLLEE\n\nBY BRIAN FEROLDI\n\nSTEP 1\n\nSTEP 10\n\nSTEP 2\n\nIdentify\n\nPrepare journal\n\ntransactions\n\nPrepare journal\n\nentries\n\nentries\n\nSTEP 9 STEP 3\n\nReview post-\n\nRecord journal\n\nclosing trial\n\nentries\n\nbalance\n\nACCOUNTING\n\nCYCLE\n\nSTEP 8 STEP 4\n\nPrepare trial\n\nCost closing\n\nbalance\n\nentries\n\nMake adjusting\n\nProduce financial\n\nReview adjusted entires\n\nstatements\n\ntrial balance\n\nSTEP 5\n\nSTEP 7\n\nFollow Brian Feroldi on LongTermMindset.co\n\nFINANCIAL STATEMENTS\n\nCHEAT SHEET\n\nBALANCE SHEET INCOME STATEMENT CASH FLOW\n\nPURPOSE PURPOSE PURPOSE\n\nTrack What it Owns & Owes Track Income & Expenses Track Cash Movement\n\nSIMILAR TO SIMILAR TO SIMILAR TO\n\nYour Net Worth Your Budget Your Checking Account\n\nTIME TIME TIME\n\nPoint in Time Snapshot Period of Time Period of Time\n\nACCOUNTING ACCOUNTING ACCOUNTING\n\nAccrual Accounting Accrual Accounting Cash Accounting\n\nADDITIONAL DETAILS ADDITIONAL DETAILS ADDITIONAL DETAILS\n\n++ ++ ++\n\nAssets must always exactly\n\nAlso called a “Profit & Has a start and end date.\n\nequal Liabilities +\n\nLoss“ statement or\n\nShareholder‘s Equity.\n\n“P&L“. Begins with Net Income\n\nfrom the Income Statement.\n\nCash Balance comes from\n\nHas a start and end date.\n\nending balance on the Cash\n\nCash Flow From Operation\n\nFlow Statement.\n\nNet Income is added to minus Capital Expenditures\n\nRetained Earnings on the equals Free Cash Flow.\n\nRetained Earnings balance\n\nBalance Sheet.\n\ncomes from last period's\n\nEnds with Cash Balance,\n\nBalance Sheet + this\n\nwhich goes on the Balance\n\nmonth's Net Income on\n\nSheet.\n\nyour Income Statement.\n\nFollow Brian Feroldi on LongTermMindset.co\n\nFINANCIAL STATEMENTS\n\nCONNECTIONS\n\nBRIAN FEROLDI\n\nFollow Brian Feroldi on LongTermMindset.co\n\nBALANCE\n\nSHEET\n\nBALANCE SHEET\n\nOVERVIEW\n\nPURPOSE TIME\n\nTrack What It Owns & Owes Point in Time Snapshot\n\nSIMILAR TO ACCOUNTING\n\nYour Net Worth Accrual Accounting\n\n++\n\nADDITIONAL DETAILS\n\nAssets must always equal Liabilities + Retained Earnings = last period's Balance\n\nShareholder‘s Equity. Sheet + Net Income - Dividends\n\nCash Balance comes from the ending Management teams have discretion of\n\nbalance on the Cash Flow Statement. the categories & terms they use.\n\nFollow Brian Feroldi on LongTermMindset.co", "proposal_file": "document-review/proposals-20260624-090104/002-revenue-revenue-is-recorded-at-the-all-tangible-intangible-i.md" }, { "source_file": "Accounting Explained Visually - eBook.pdf", "source_sha256": "3dc5f1494e5222e39447b586527b070c9c291e93a0e01787fbd8c6862f570a2a", "chunk": 3, "page_start": 12, "page_end": 12, "suggested_title": "BALANCE SHEET SYNONYMS", "situation": "learning-planning", "keywords": [ "assets", "long-term", "shares", "notes", "deferred", "payable", "capital", "stock" ], "key_lines": [ "NET WORTH STATEMENT STATEMENT OF FINANCIAL POSITION", "FINANCIAL STATUS REPORT STATEMENT OF FINANCIAL CONDITION", "Liquid Assets Cash Reserves Creditors Current Debt Unearned Revenue", "Marketable Securities Cash on Hand Supplier Debt Notes Payable Customer Deposits", "Trade Creditors Bonds Payable Income Taxes Payable" ], "closest_card": "cards/55-spontan-antworten-mit-struktur.md", "similarity": 0.03229695550949942, "decision": "new-card-candidate", "text": "BALANCE SHEET SYNONYMS\n\nBY BRIAN FEROLDI\n\nNET WORTH STATEMENT STATEMENT OF FINANCIAL POSITION\n\nFINANCIAL STATUS REPORT STATEMENT OF FINANCIAL CONDITION\n\nNotes\n\nDeferred Revenue\n\nDeposits\n\nNear Cash Cash Assets Senior Debt\n\nDividends Payable\n\nRecoverable VAT\n\nLiquid Assets Cash Reserves Creditors Current Debt Unearned Revenue\n\nNotes Receivable\n\nMarketable Securities Cash on Hand Supplier Debt Notes Payable Customer Deposits\n\nPrepaid Expenses\n\nTrade Creditors Bonds Payable Income Taxes Payable\n\nAssets Held for Sale\n\nTrade Payables Short-term Loans Accrued Interest Payable\n\nDeferred Tax Assets\n\nDue to Suppliers Convertible Notes Accrued Salaries and Wages\n\nDividends Receivable\n\nUnpaid Expenses Convertible Senior Notes Current Maturities of Capital\n\nAdvances to Suppliers\n\nOutstanding Bills Fixed Payment Obligations Lease Obligations\n\nShort-term Investments\n\nTrade Debtor Balances Accounts Payable Deferred Payment Other Accrued Liabilities\n\nIncome Taxes Receivable\n\nReceivables Bills Receivable Accrued Expenses Obligations\n\nCurrent Portion of Long-term\n\nOutstanding Trade Debtors Outstanding Invoices Current Portion of Long-term\n\nInvestments\n\nInvoices Receivables Debt\n\nCurrent Portion of Loans\n\nReceivable\n\nStock\n\nGoods\n\nNotes\n\nSupplies\n\nSenior Debt\n\nMerchandise\n\nLong-term Loans\n\nProduct Stock Convertible Notes\n\nOn-hand Goods Non-Current Debt\n\nWarehouse Stock Subordinated Debt\n\nMortgages Payable\n\nLong-term Financing\n\nCDs Long-term Borrowings\n\nNon-Current Liabilities\n\nBonds\n\nConvertible Senior Notes\n\nStocks\n\nLong-term Bonds Payable\n\nPrivate Equity\n\nLong-term Notes Payable\n\nInvestments\n\nFixed Payment Obligations\n\nVenture Capital Long-term Lease Obligations\n\nInvestments Deferred Payment Obligations\n\nLong-term Notes\n\nReceivable\n\nInvestment in\n\nSubsidiaries\n\nInvestment in Joint\n\nVentures\n\nPension Funds Deferred Credits\n\nIntellectual Property Minority Interest\n\nInvestments Pension Obligations\n\nLong-term Earn-outs\n\nCommodity Holdings\n\nDeferred Tax Liabilities\n\nInfrastructure Funds\n\nPost-retirement Health Care\n\nLoans Receivable\n\nObligations\n\nReal Estate\n\nLong-term Capital Leases\n\nInvestments\n\nLong-term Deferred Revenue\n\nLong-term Provisions\n\nLong-term Deferred\n\nCompensation\n\nOther Non-Current Liabilities\n\nLong-term Contingent\n\nLiabilities\n\nPlant Hard Assets\n\nAssets Fixed Capital\n\nProperty Capital Assets\n\nDeficit\n\nFixtures Physical Assets Senior Equity\n\nEarned Deficit\n\nFacilities Tangible Assets Preferred Equity\n\nEarned Surplus\n\nTangibles Property, Plant, and Preferred Shares\n\nRetained Profit\n\nMachinery Equipment (PP&E) Retained Deficit Preference Shares\n\nPreferred Securities\n\nEquipment Non-Current Assets Retained Capital Cumulative Preferred Stock\n\nPlant Assets Long-term Assets Retained Losses Convertible Preferred Stock\n\nAccumulated Profit Non-Convertible Preferred\n\nUndistributed Profits Stock\n\nUnappropriated Profit Participating Preferred Stock\n\nIntangible Assets\n\nAccumulated Earnings Preferred Dividend Stock\n\nFinancial Assets\n\nAccumulated Retained\n\nDeferred Charges\n\nEarnings\n\nNatural Resources\n\nCapital Stock Accumulated Income\n\nOther Non-Current\n\nBlue Sky Value Share Capital Earnings Reserve\n\nExcess Earnings Deferred Tax Assets Equity Shares Accumulated Losses Own Shares\n\nEnterprise Value Right-of-Use Assets Voting Shares Accumulated Earnings Buyback Shares\n\nLong-Term Receivables Deficit Treasury Shares\n\nIntangible Assets Class A Shares\n\nCapital Work in Progress Negative Retained Treasury Equity\n\nCommercial Value Class B Shares\n\nRetirement Benefit Assets Earnings Share Repurchase\n\nPurchased Goodwill Non-Current Prepayments Common Equity Accumulated Net Losses Reacquired Shares\n\nConsolidation Surplus Investments in Associates Common Shares Retained Earnings Deficit Repurchased Shares", "proposal_file": "document-review/proposals-20260624-090104/003-balance-sheet-synonyms.md" }, { "source_file": "Accounting Explained Visually - eBook.pdf", "source_sha256": "3dc5f1494e5222e39447b586527b070c9c291e93a0e01787fbd8c6862f570a2a", "chunk": 4, "page_start": 12, "page_end": 16, "suggested_title": "Business Valuation Residual Equipment (PP&E) Founders' Shares Losses Shares in Treasury", "situation": "learning-planning", "keywords": [ "company", "assets", "cash", "liabilities", "there", "any", "stock", "than" ], "key_lines": [ "Business Reputation Value Property, Plant, and Ordinary Shares Accumulated Operating Company's Own Shares", "Business Valuation Residual Equipment (PP&E) Founders' Shares Losses Shares in Treasury", "Follow Brian Feroldi on LongTermMindset.co", "How much cash does the company have?", "Are there accounts receivables? How much?" ], "closest_card": "cards/55-spontan-antworten-mit-struktur.md", "similarity": 0.024784688822725092, "decision": "new-card-candidate", "text": "Business Reputation Value Property, Plant, and Ordinary Shares Accumulated Operating Company's Own Shares\n\nBusiness Valuation Residual Equipment (PP&E) Founders' Shares Losses Shares in Treasury\n\nFollow Brian Feroldi on LongTermMindset.co\n\nBalance Sheet\n\nQ U E S T I O N S T O A S K\n\nBY BRIAN FEROLDI\n\nHow much cash does the company have?\n\nAre there accounts receivables? How much?\n\nIs there any inventory? How much?\n\nIs there any goodwill? How much?\n\nWhat are the company's biggest assets?\n\nDoes the company have debt? How much?\n\nDoes the company have deferred revenue?\n\nWhat are the company's biggest liabilities?\n\nHow has the company been funded?\n\nIs there any preferred stock?\n\nAre retained earnings positive and growing?\n\nIs there any treasury stock?\n\nFollow Brian Feroldi on LongTermMindset.co\n\nHow To\n\nBALANCE SHEET\n\nAnalyze A\n\nBy Brian Feroldi\n\nA balance sheet shows you what a company OWNS and OWES\n\nIt’s like a company’s “Net Worth” statement\n\nAssets = Liabilities + Shareholders Equity\n\nBalance Sheet is a SNAPSHOT at a certain POINT IN TIME\n\nASSETS LIABILITIES\n\nShows everything the company OWNS. Shows everything the company OWES.\n\nTwo categories of assets: Current Assets Two categories of liabilities: Current\n\nand Long-Term Assets. Liabilities and Long-Term Liabilities.\n\nCurrent Assets: Assets that are expected to be Current Liabilities: An obligation due in less\n\nused thin 1 year. than 1 year.\n\nLong-Term Assets: Assets that expected to last Long-Term Liabilities: An obligation due in\n\nlonger than 1 year: greater than 1 year.\n\nCash & cash equivalents\n\nMost Liquid\n\nSHAREHOLDER’S EQUITY\n\nMarketable securities\n\nFinancial assets\n\nA company's net worth.\n\nAccounts receivable\n\nThe dollar amount that would be returned\n\nInventory\n\nto the owners if the company was\n\nPlant, property & equipment\n\nliquidated.\n\nIntangible assets\n\nLeast Liquid Shareholder’s Equity = Assets – Liabilities\n\nGoodwill\n\nHOW TO ANALYZE A BALANCE SHEET\n\nQuestions Yellow Flags\n\n1: How much CASH does the company have? 1: CASH & CASH EQUIVALENTS → Less Than Total Debt\n\n2: Are there any ACCOUNTS RECEIVABLE? 2: ACCOUNTS RECEIVABLE → Rising Faster Than Revenue\n\n3: Is there any GOODWILL? How much? 3: INVENTORY → Rising Faster Than Profits\n\n4: What are the biggest liabilities? 4: GOODWILL → More Than 50% of Total Assets\n\n5: Does the company have any DEBT? What kind? 5: INTANGIBLE ASSETS → More Than 50% of Total Assets\n\n6: Is there any PREFFERED STOCK? 6: SHORT-TERM & LONG-TERM DEBT → More Than Cash\n\n7: Are RETAINED EARNINGS positive? Is it growing? 7: PREFERRED STOCK → There Shouldn’t Be Any\n\n8: Is there any TREASURY STOCK? 8: RETAINED EARNINGS → A Negative Number\n\nFollow Brian Feroldi on LongTermMindset.co\n\nWARREN BUFFETT’S\n\nBALANCE SHEET RULES OF THUMB\n\nBY BRIAN FEROLDI\n\nMetric: Equation: Rule:\n\nMore Cash\n\nCash & Debt Cash > Total Debt\n\nThan Debt\n\nTotal Liabilities\n\nAdjusted Debt\n\nShareholder Equity + Below 0.80\n\nto Equity\n\n(Treasury Stock)\n\nPreferred Stock Preferred Stock None\n\nRecession -\n\nRetained\n\nYear 2 Retained Earnings\n\nProof\n\nEarnings Year 1 Retained Earnings\n\nGrowth\n\nTreasury Stock Treasury Stock > 1 Exists\n\nFollow Brian Feroldi on LongTermMindset.co\n\n4BALANCE SHEET\n\nRATIOS\n\nBRIAN FEROLDI\n\nRatio:\n\nQuestion: Equation: Where: Guide:\n\nCash\n\n\"Can the\n\nQuick + Cash Equivalents\n\nFragile = <1.0\n\n+ Accounts Receivables\n\ncompany pay\n\nRobust = 1 to 1.5\n\nRatio Current\n\nits bills?\" Antifragile = <1.5\n\nLiabilities\n\nCurrent\n\n\"How well does\n\nCurrent\n\nFragile = <0.7\n\nAssets\n\nthe company\n\nRobust = 1 - 2\n\nRatio manage its\n\nCurrent\n\nAntifragile = >2.0\n\nassets?\"\n\nLiabilities\n\nDebt-to- \"How much Total\n\nFragile = >2.0\n\nleverage is the Liabilities\n\nEquity\n\nRobust = 0.7 - 2.0\n\ncompany\n\nShareholder\n\nAntifragile = <0.7\n\nRatio\n\nusing?\"\n\nEquity\n\nGoodwill- \"Is the\n\nGoodwill\n\nFragile = >50%\n\ncompany\n\nto-Assets Robust = 10%-50%\n\ngrowing Total", "proposal_file": "document-review/proposals-20260624-090104/004-business-valuation-residual-equipment-pp-e-founders-shares-l.md" }, { "source_file": "Accounting Explained Visually - eBook.pdf", "source_sha256": "3dc5f1494e5222e39447b586527b070c9c291e93a0e01787fbd8c6862f570a2a", "chunk": 5, "page_start": 16, "page_end": 23, "suggested_title": "Antifragile = <10%", "situation": "before-1on1", "keywords": [ "income", "statement", "balance", "cash", "brian", "feroldi", "total", "time" ], "key_lines": [ "Follow Brian Feroldi on LongTermMindset.co", "Track What it Owns & Owes Track Income & Expenses", "Point in Time Snapshot Period of Time", "Accrual Accounting Accrual Accounting", "Assets must always exactly equal Liabilities +" ], "closest_card": "cards/47-decision-heuristics-cheat-sheet.md", "similarity": 0.03520901466177786, "decision": "new-card-candidate", "text": "Antifragile = <10%\n\nRatio organically?\" Assets\n\nFollow Brian Feroldi on LongTermMindset.co\n\nIINNCCOOMMEE\n\nBBAALLAANNCCEE\n\nSSTTAATTEEMMEENNTT\n\nSSHHEEEETT\n\nBRIAN FEROLDI\n\nPURPOSE PURPOSE\n\nTrack What it Owns & Owes Track Income & Expenses\n\nSIMILAR TO\n\nSIMILAR TO\n\nYour Net Worth Your Budget\n\nTIME TIME\n\nPoint in Time Snapshot Period of Time\n\nACCOUNTING ACCOUNTING\n\nAccrual Accounting Accrual Accounting\n\n++\n\nADDITIONAL DETAILS ++\n\nADDITIONAL DETAILS\n\nAssets must always exactly equal Liabilities +\n\nShareholder‘s Equity.\n\nAlso called a “Profit & Loss“ statement or “P&L“.\n\nCash Balance comes from the ending balance on the\n\nHas a start and end date.\n\nCash Flow Statement.\n\nNet Income is added to Retained Earnings on the\n\nRetained Earnings balance comes from last period's\n\nBalance Sheet minus any Dividend Payments.\n\nBalance Sheet plus this month's Net Income on your\n\nIncome Statement minus any Dividends Paid.\n\nFollow Brian FFeorlololdwi o Bnr ian Feroldi on LongTermMindset.co\n\nBBAALLAANNCCEE CCAASSHH FFLLOOWW\n\nSSHHEEEETT SSTTAATTEEMMEENNTT\n\nBRIAN FEROLDI\n\nPURPOSE PURPOSE\n\nTrack What it Owns & Owes Track Cash Movements\n\nTIME TIME\n\nPoint in Time Snapshot Period of Time\n\nACCOUNTING ACCOUNTING\n\nAccrual Accounting Cash Accounting\n\n++ ++\n\nADDITIONAL DETAILS\n\nADDITIONAL DETAILS\n\nAssets must always exactly equal Liabilities +\n\nEnding cash balance becomes Cash on the Balance\n\nShareholder‘s Equity.\n\nSheet\n\nCash Balance comes from ending balance on the Cash\n\nBegins with Net Income from the Income Statement\n\nFlow Statement.\n\nRetained Earnings balance comes from last period's Cash Flow From Operation minus Capital Expenditures\n\nBalance Sheet + this month's Net Income on your equals Free Cash Flow\n\nIncome Statement.\n\nFollow Brian FFeorlololdwi o Bnr ian Feroldi on LongTermMindset.co\n\n8 BALANCE SHEET\n\nYYEELLLLOOWW FFLLAAGGSS\n\nBRIAN FEROLDI\n\n1: Less Than\n\n3: Rising Faster\n\nTotal Debt 2: Rising Faster 4: More Than\n\nThan Profits\n\nThan Revenue Cash\n\n6: Intangibles > 50%\n\n8: A Negative\n\nof Total Assets\n\nNumber\n\n5: More Than 50% of 7: There Shouldn’t\n\nTotal Assets Be Any\n\nFollow Brian Feroldi on LongTermMindset.co\n\nBALANCE SHEET\n\n10\n\nGREEN FLAGS\n\nBRIAN FEROLDI\n\n2: No Accounts\n\n4: Current\n\nReceivables\n\nLiabilities Less\n\n5: No Short-Term\n\nThan Cash\n\nor Long Term\n\n1: More Cash 3: No Inventory\n\nDebt\n\nThan Debt\n\n6: Goodwill Less\n\n8: Retained\n\n10: Deferred\n\nThan 10% of Total\n\nEarnings Positive\n\nRevenue\n\nAssets\n\n& Growing\n\n7: No Preferred\n\n9: Treasury Stock\n\nStock\n\nFollow Brian Feroldi on LongTermMindset.co\n\nINCOME\n\nSTATEMENT\n\nIINNCCOOMMEE SSTTAATTEEMMEENNTT\n\nEXPLAINED SIMPLY\n\nTotal Value Of All Sales After\n\nDiscounts During Period\n\nTotal Cost To Produce\n\nProduct/Service\n\nTotal Profit From Selling\n\nProduct/Service\n\nAll Overhead Costs Such As\n\nSalaries, Rent, & Marketing\n\nProfits From\n\nOperating Business\n\nIncome/Expenses Not From\n\nOperating Business\n\nTotal Income\n\nBefore Taxes\n\nTotal Taxes Paid\n\nProfits Available\n\nTo Shareholders\n\nTotal Shares A\n\nCompany Has Issued\n\nEach Shares’\n\nClaim On Earnings\n\nPURPOSE: TIME:\n\nTrack Income & Expenses Period of Time\n\nSIMILAR TO: ACCOUNTING:\n\nYour Monthly Budget Accrual Accounting\n\n++\n\nADDITIONAL DETAILS\n\nAlso called a “Profit & Loss“ statement or “P&L“. Net Income is added to Retained\n\nHas a start and end date. Earnings on the Balance Sheet.\n\nFollow Brian Feroldi on LongTermMindset.co\n\nINCOME STATEMENT\n\nSYNONYMS\n\nBY BRIAN FEROLDI\n\nEarnings Statement Statement of Earnings\n\nOperating Statement Profit and Loss Statement (P&L)\n\nStatement of Operations Revenue Statement\n\nSales Gross Sales\n\nCost of Sales\n\nIncome Top Line\n\nCost of Revenue\n\nTurnover Receipts\n\nGoods Costs\n\nGross Income\n\nCost of Products Sold\n\nOverhead\n\nGross Income\n\nOperating Costs\n\nGross Margin Selling, General, and\n\nSales Profit Administrative Expenses (SG&A)\n\nSales & Marketing (S&M)\n\nGross Earnings\n\nResearch & Development (R&D)\n\nGeneral & Administrative (G&A)\n\nOperating Outgo", "proposal_file": "document-review/proposals-20260624-090104/005-antifragile-10.md" }, { "source_file": "Accounting Explained Visually - eBook.pdf", "source_sha256": "3dc5f1494e5222e39447b586527b070c9c291e93a0e01787fbd8c6862f570a2a", "chunk": 6, "page_start": 23, "page_end": 27, "suggested_title": "Operating Profit", "situation": "before-1on1", "keywords": [ "income", "margin", "profit", "tax", "operating", "revenue", "gross", "earnings" ], "key_lines": [ "and Taxes (EBIT) Interest Income / Expense", "Operating Cash Flow Secondary Income / Expense", "Business Income Incidental Income / Expense", "Operating Profit Before Tax Earnings Tax", "Earnings Before Income & Fiscal Charge on Income" ], "closest_card": "cards/05-strategy-workflow-os.md", "similarity": 0.08695023166030336, "decision": "new-card-candidate", "text": "Operating Profit\n\nOperational Expenses\n\nOperating Earnings\n\nBusiness Expenses\n\nOperating Margin\n\nEarnings Before Interest\n\nOther Income / Expense\n\nand Taxes (EBIT) Interest Income / Expense\n\nOperating Cash Flow Secondary Income / Expense\n\nBusiness Income Incidental Income / Expense\n\nExtraordinary Items\n\nEarnings Before Tax (EBT)\n\nTax on Income\n\nIncome Before Tax\n\nRevenue Tax\n\nProfit Before Tax (PBT)\n\nOperating Profit Before Tax Earnings Tax\n\nEarnings Before Income & Fiscal Charge on Income\n\nTaxes (EBIT) Corporate Income Tax\n\nPretax Earnings Direct Tax\n\nPretax Profit\n\nEarnings\n\nNet Earnings\n\nNet Profit\n\nBottom Line\n\nProfits Issued Shares\n\nIncome EPS Basic Shares Outsanding\n\nNet Income After Taxes Diluted shares Outstanding\n\nNet Income Per Share\n\nProfit After Tax (PAT) Fully Diluted Shares Outstanding\n\nProfit Per Share\n\nEarnings After Tax (EAT) Outstanding Stock\n\nNet Income Before Outstanding Equity\n\nExtraordinary Items Outstanding Shares of Stock\n\nFollow Brian Feroldi on LongTermMindset.co\n\nIncome Statement\n\nQ U E S T I O N S T O A S K\n\nBRIAN FEROLDI\n\nDoes revenue consistently\n\ngrow?\n\nWhat is the gross margin?\n\nIs the gross margin stable?\n\nExpanding? Contracting?\n\nWhy?\n\nAre there research +\n\ndevelopment expenses?\n\nAre there selling + marketing\n\nexpenses?\n\nWhat are the company's\n\nbiggest operating expenses?\n\nWhat is the company\n\noperating margin?\n\nDoes the company have any\n\nnon-operating expenses?\n\nWhat is the company net\n\nprofit margin?\n\nIs the company profitable on\n\na Non-GAAP basis?\n\nIs the company\n\nprofitable on a\n\nGAAP basis?\n\nFollow Brian Feroldi on LongTermMindset.co\n\nWARREN BUFFETT’S\n\nINCOME STATEMENT RULES OF THUMB\n\nBY BRIAN FEROLDI\n\nMETRIC: EQUATION: RULE OF THUMB:\n\nGross Gross Profit\n\n>40%\n\nMargin Revenue\n\nSG&A SG&A\n\n<30%\n\nMargin Gross Profit\n\nR&D R&D\n\n<30%\n\nMargin Gross Profit\n\nDepreciation Depreciation\n\n<10%\n\nMargin Gross Profit\n\nInterest Interest\n\n<15%\n\nMargin Operating Income\n\nTax Taxes Corporate\n\nMargin Pre-Tax Income Tax Rate\n\nNet Income Net Income\n\n>20%\n\nMargin Revenue\n\nEPS Year 2 EPS Positive &\n\nGrowth Year 1 EPS Growing\n\nFollow Brian Feroldi on LongTermMindset.co\n\nINCOME STATEMENT\n\n55 KKEEYY MMEETTRRIICCSS\n\nBY BRIAN FEROLDI\n\nMETRIC: FORMULA: WHAT:\n\nSALES GROWTH\n\nCompanies are either growing or dying — there isn’t a\n\nYEAR 2 SALES\n\nthird direction. Great companies consistently grow\n\nYEAR 1 SALES\n\ntheir revenues by at least 5% per year.\n\nGROSS MARGINS (REVENUE -\n\nA stable or rising Gross Margin is a sign that a\n\nCOST OF GOODS SOLD)\n\ncompany has negotiating power with suppliers and\n\nREVENUE\n\npricing power with customers.\n\nOPERATING\n\nREVENUE GROWTH RATE \"Operating Leverage\" means profits can grow FASTER\n\nLEVERAGE\n\nthan revenues. A $1 increase in revenue leads to more\n\nVS\n\nthan a $1 increase in profits. This happens when\n\nPROFIT GROWTH RATE revenue grows faster than expenses.\n\nDEBT COVERAGE\n\nGood companies can easily cover their interest\n\nINTEREST EXPENSE\n\nexpense. A rule of thumb is this ratio should be under\n\nOPERATING INCOME\n\n25%.\n\nDILUTION\n\nCompanies that pay a lot of Stock-Based\n\nYEAR 2 DILUTED SHARES\n\nCompensation dilute shareholders by rapidly\n\nOUTSTANDING\n\nincreasing their share count. This growth should be\n\nYEAR 1 DILUTED SHARES under 3% for fast-growing companies and under 1%\n\nOUTSTANDING\n\nfor slow growing companies.\n\n4 CAVEATS TO KEEP IN MIND\n\n11 Not all revenue growth is good for investors\n\n22 There can be good reasons for Gross Margin to decline\n\n33 Operating Leverage will diminsh over time\n\n44 Stock buybacks can mask the true dilution rate\n\nFollow Brian FFeorlololdwi o Bnr ian Feroldi on LongTermMindset.co\n\nINCOME CASH FLOW\n\nSTATEMENT STATEMENT\n\nBRIAN FEROLDI\n\nPURPOSE PURPOSE\n\nTrack Income & Expenses Track Cash Movements\n\nTIME TIME\n\nPeriod of Time Period of Time\n\nACCOUNTING ACCOUNTING\n\nAccrual Accounting Cash Accounting\n\n++ ++\n\nADDITIONAL DETAILS ADDITIONAL DETAILS", "proposal_file": "document-review/proposals-20260624-090104/006-operating-profit.md" }, { "source_file": "Accounting Explained Visually - eBook.pdf", "source_sha256": "3dc5f1494e5222e39447b586527b070c9c291e93a0e01787fbd8c6862f570a2a", "chunk": 7, "page_start": 27, "page_end": 33, "suggested_title": "Also called a “Profit & Loss“ statement or “P&L“ Has a start and end date", "situation": "learning-planning", "keywords": [ "cash", "income", "statement", "net", "flow", "brian", "feroldi", "expenses" ], "key_lines": [ "Also called a “Profit & Loss“ statement or “P&L“ Has a start and end date", "Has a start and end date, usually a quarter or year Begins with Net Income from the Income Statement", "Net Income is added to Retained Earnings on the Cash Flow From Operation minus Capital", "Balance Sheet. Expenditures equals Free Cash Flow", "Follow Brian FFeorlololdwi o Bnr ian Feroldi on LongTermMindset.co" ], "closest_card": "cards/05-strategy-workflow-os.md", "similarity": 0.03173551894774601, "decision": "new-card-candidate", "text": "Also called a “Profit & Loss“ statement or “P&L“ Has a start and end date\n\nHas a start and end date, usually a quarter or year Begins with Net Income from the Income Statement\n\nNet Income is added to Retained Earnings on the Cash Flow From Operation minus Capital\n\nBalance Sheet. Expenditures equals Free Cash Flow\n\nFollow Brian FFeorlololdwi o Bnr ian Feroldi on LongTermMindset.co\n\nINCOME STATEMENT\n\nHOW\n\nTHE\n\n& BALANCE SHEET\n\nLINK\n\nBY BRIAN FEROLDI\n\nINCOME STATEMENT\n\nITEM EXPLANATION\n\nAccountant's estimate of the sales generated\n\nStart\n\nRevenues by any transactions made the business\n\nWith\n\nduring the period.\n\nOPERATING\n\nInclude all expenses associated with\n\nEXPENSES\n\nOperating\n\nNet Out operation this year, with no benefits spilling\n\nExpenses\n\nover into future years.\n\nWRITTEN OFF AS Operating\n\nTo Get Operating profitability of business.\n\nDEPRECIATION Profit\n\nOR AMORTIZATION\n\nFinancial Subtract non-operating expenses (interest FINANCING\n\nOVER LIFE OF ASSET\n\nNet Out Income & payments on debt). Add non-operating EXPENSES\n\nExpenses income (interest income, equity investments).\n\nTaxable\n\nADD / SUBTRACT To get Income to equity investors before taxes.\n\nIncome\n\nBORROWINGS ON\n\nNON-OPERATING\n\nBALANCE SHEET\n\nINCOME /\n\nNet Out Taxes Taxes, based upon taxable income.\n\nEXPENSES\n\nTo get Net Income Income to equity investors, after taxes.\n\nNON-OPERATING\n\nBALANCE SHEET\n\nEXPENSES\n\nASSETS LIABILITIES\n\nCurrent Current\n\nSHORT LIVED ASSETS SHORT TERM OBLIGATIONS\n\nAssets Liabilities\n\nLONG LIVED Fixed\n\nDebt LONG TERM DEBT\n\nPHYSICAL ASSETS Assets\n\nINVESTEMENTS IN Financial Other\n\nOTHER LONG TERM\n\nSECURITIES & OTHER\n\nAssets Liabities OBLIGATIONS\n\nBUSINESS\n\nNET\n\nINCOME\n\nIntangible\n\nASSETS WHICH ARE NOT Equity\n\nSHAREHOLDERS' EQUITY\n\nPHYSICAL Assets\n\nFollow Brian Feroldi on LongTermMindset.co\n\n6\n\nINCOME STATEMENT\n\nYYEELLLLOOWW FFLLAAGGSS\n\nBRIAN FEROLDI\n\n1: Growth Rate\n\nSuddenly\n\nPlunges\n\n2: Gross Margin\n\nDeclining\n\n3: Marketing\n\n4: Goodwill\n\nExpense Rise\n\nFaster Than Writedown\n\nRevenue\n\n6: Tax Rate\n\nConsistently\n\nLower Than\n\nHome Country\n\n5: Dilution Corporate Rate\n\nExecessively\n\nHigh\n\nFollow Brian Feroldi on LongTermMindset.co\n\nFollow Brian FFeorlololdwi o Bnr ian Feroldi on LongTermMindset.co\n\n10 INCOME STATEMENT\n\nGREEN FLAGS\n\nBRIAN FEROLDI\n\n1: Accelerating\n\nRevenue Growth\n\n2: Gross Margin\n\nExpands\n\n3: Operating Expenses\n\nGrow Slower Than\n\nRevenue\n\n4: Operating\n\nMargin Expands\n\n5: Interest Income\n\n> Interest Expense\n\n6: Pre-Tax Margin\n\nExpands\n\n7: Income Tax\n\nRate Near 21%\n\n8: Net Income\n\nGrows Faster\n\nThan Revenue\n\n9: Shares 10: Earnings Per\n\nOutstanding Share Grows Faster\n\nThan Revenue\n\nDeclines\n\nFollow Brian Feroldi on LongTermMindset.co\n\nCASH FLOW\n\nSTATEMENT\n\nCASH FLOW STATEMENT\n\nEXPLAINED SIMPLY\n\nStart & End Date\n\nFrom Income Statement\n\nDepreciation, Amortization, Stock-based Compensation\n\nReceivables, Payables, & Inventory\n\nTotal Cash Generated From Operations\n\nCash Spent on Buildings & Equipment\n\nCash Paid to Acquire Other Busineses\n\nCash Proceeds From Asset Sales\n\nTotal Cash Generated From Investments\n\nCash Proceeds / Outlays From Debt\n\nCash Proceeds / Outlays From Stock\n\nCash Payments To Shareholders\n\nTotal Cash Generated From Financing\n\nTotal Change In Cash During Period\n\nStarting Cash Level\n\nEnding Cash Level Sent To Balance Sheet\n\nPURPOSE TIME\n\nTrack Cash Movement Period of Time\n\nSIMILAR TO ACCOUNTING\n\nYour Checking Account Cash Accounting\n\n++\n\nADDITIONAL DETAILS\n\nHas a start and end date.\n\nCash Flow From Operation - Capital Expenditures\n\nBegins with Net Income from Income = Free Cash Flow.\n\nStatement Ending Cash Balance goes on the Balance Sheet.\n\nFollow Brian Feroldi on LongTermMindset.co\n\nCASH FLOW STATEMENT\n\nSYNONYMS\n\nBY BRIAN FEROLDI\n\nCash Statement Statement of Financial Flows\n\nStatement of Cash Flow Statement of Cash Operations\n\nFinancial Flow Statement Operating Cash Flow Statement\n\nProfits Net Earnings Depletion Non-Cash Donations", "proposal_file": "document-review/proposals-20260624-090104/007-also-called-a-profit-loss-statement-or-p-l-has-a-start-and-e.md" }, { "source_file": "Accounting Explained Visually - eBook.pdf", "source_sha256": "3dc5f1494e5222e39447b586527b070c9c291e93a0e01787fbd8c6862f570a2a", "chunk": 8, "page_start": 33, "page_end": 35, "suggested_title": "Income Profit After Tax (PAT) Depreciation Amortization", "situation": "learning-planning", "keywords": [ "cash", "flow", "debt", "company", "issuance", "stock", "activities", "dividend" ], "key_lines": [ "Income Profit After Tax (PAT) Depreciation Amortization", "Earnings Net Income After Taxes Stock-based Write-downs", "Net Profit Earnings After Tax (EAT) Compensation Deferred Taxes", "Unrealized Gains Provisions for Losses", "Payables Receivables OCF Operating Activities" ], "closest_card": "cards/19-salary-negotiation-and-pay-transparency.md", "similarity": 0.025638309286799995, "decision": "new-card-candidate", "text": "Income Profit After Tax (PAT) Depreciation Amortization\n\nEarnings Net Income After Taxes Stock-based Write-downs\n\nNet Profit Earnings After Tax (EAT) Compensation Deferred Taxes\n\nUnrealized Gains Provisions for Losses\n\nand Losses Impairment Charges\n\nNon-Cash Interest\n\nExpense\n\nStock Liabilities\n\nCredit Provisions\n\nAccruals Inventories\n\nPayables Receivables OCF Operating Activities\n\nPrepayments Cash Profit Cash from Operations\n\nCash Earned Cash Generated from\n\nCash Income Operations\n\nOperating Cash Net Cash from\n\nOperating Activities\n\nCapex Facilities Spend\n\nPPE Spend Equipment Spend\n\nAsset Buys Investment Spend Merger Asset Acquisition\n\nPlant Outlay Infrastructure Takeover Company Purchase\n\nInfrastructure Spend Purchase Business Purchase\n\nOutlay Property, Plant, and Asset Buy Corporate Acquisition\n\nProperty Spend Equipment Consolidation\n\nSale Gain Liquidation Investing Cash Cash Flow from\n\nDisposal Investment Investment Flow Investments\n\nAsset Sale Sale Investment Outlay Net Cash Used\n\nDivestiture Divestment Cash from Investing in Investing\n\nSale Proceeds Proceeds Investing Cash Flows Activities\n\nCapital Returns Investment Cash Used in Investing\n\nDisposal of Liquidation\n\nInvestments Proceeds from\n\nStock Sale\n\nProceeds from Investment\n\nEquity Issue\n\nSales of Assets Disposal\n\nIssuing Shares\n\nEquity Buyback\n\nDebt Issue Share Buyback\n\nDebt Raised Stock Issuance\n\nLoan Issuance Equity Offering\n\nBond Issuance Share Issuance\n\nStock Redemption\n\nDebt Refinance\n\nShare Redemption\n\nDebt Retirement\n\nEquity Redemption\n\nDebt Repayment\n\nEquity Repurchase\n\nLoan Repayment Stock Repurchase\n\nBond Repayment Share Repurchase\n\nDebt Issuance/Repayment Issuance of Shares\n\nDebt Pay-down Payouts Payment of Dividends Finance Cash Repurchase of Shares\n\nDividends Dividend Remittance Funding Cash Repurchase of Stock\n\nNew Debt Issued\n\nDividend Outlay Dividend Disbursement Financing Flow Redemption of Shares\n\nIssuance of Debt\n\nProfit Distribution Dividends to Fund Injections Issuing Common Stock\n\nIssuance of Bonds\n\nDividend Payment Shareholders Funding Activities Issuance of Common\n\nRepayment of Debt Stock\n\nDividend Allocation Distribution to Financial Activities\n\nBorrowing Activities Repayment of Share\n\nDistribute Earnings Shareholders Financing Activities\n\nRepayment of Loans Capital\n\nDebt Financing Activities Dividend Cash Dividend Payment Cash from Financing Issuance of Equity\n\nDistribution Disbursement of Financing Cash Flow Interests\n\nPayments on Borrowings\n\nProceeds from Issuance of Shareholder Dividends Cash Flow Financing Repurchase of Equity\n\nDebt Dividends Allocation of Dividends Net Financing Cash Flow Interests\n\nFollow Brian Feroldi on LongTermMindset.co\n\nCash Flow Statement\n\nQ U E S T I O N S T O A S K\n\nBRIAN FEROLDI\n\nDid the company generate\n\npositive Net Income?\n\nDoes the company have high\n\ndepreciation expense?\n\nWhat are the biggest non-\n\ncash charges?\n\nIs stock-based compensation\n\nhigh or low?\n\nHow do changes in working\n\ncapital affect cash flow?\n\nAre capital expenditures high\n\nor low?\n\nDoes the company generate\n\npositive free cash flow?\n\nDo net income and free cash\n\nflow closely match each\n\nother? If not, why?\n\nWhat is the company doing\n\nwith its operating income?\n\nHow is the company using\n\ndebt?\n\nIs the company issuing stock\n\nor repurchasing it?\n\nDoes the company pay a\n\ndividend?\n\nIs the cash balance rising or\n\nfalling? Why?\n\nFollow Brian Feroldi on LongTermMindset.co\n\n7\n\nCASH FLOW\n\nCASH FLOW\n\nRATIOS\n\nBBYY BBRRIIAANN FFEERROOLLDDII\n\n11\n\nOPERATING\n\nCASH RATIO\n\n2\n\nCASH FLOW\n\nThis ratio compares a company's cash and\n\ncash equivalents to its current liabilities. It RATIO\n\nshows the company's ability to pay off its\n\nOperating cash flow is\n\nshort-term debts using only its cash on hand.\n\ncompared to current\n\nliabilities. It shows the\n\n33\n\nFREE CASH FLOW TO SALES RATIO\n\ncompany's ability to", "proposal_file": "document-review/proposals-20260624-090104/008-income-profit-after-tax-pat-depreciation-amortization.md" }, { "source_file": "Accounting Explained Visually - eBook.pdf", "source_sha256": "3dc5f1494e5222e39447b586527b070c9c291e93a0e01787fbd8c6862f570a2a", "chunk": 9, "page_start": 35, "page_end": 40, "suggested_title": "pay off its current", "situation": "learning-planning", "keywords": [ "cash", "flow", "income", "net", "operating", "brian", "feroldi", "company" ], "key_lines": [ "Free cash flow is compared to trailing 12", "month sales. It shows how much cash a liabilities using its", "company generates after deducting all capital operating cash flow.", "each dollar of operating cash flow.", "Total debt is compared to operating" ], "closest_card": "cards/05-strategy-workflow-os.md", "similarity": 0.030801160609598068, "decision": "new-card-candidate", "text": "pay off its current\n\nFree cash flow is compared to trailing 12-\n\nmonth sales. It shows how much cash a liabilities using its\n\ncompany generates after deducting all capital operating cash flow.\n\nexpenditures.\n\nPRICE TO\n\n5 CASH FLOW RETURN ON 44\n\nCASH FLOW RATIO\n\nINVESTMENT\n\nA company's stock price is\n\nPresent value of cash flows\n\ncompared to its operating cash\n\ndivided by invested capital. It\n\nflow per share. It shows how much\n\nshows the return on investment\n\ninvestors are willing to pay for\n\ngenerated by a company's cash\n\neach dollar of operating cash flow.\n\nflow.\n\n66 DEBT TO OPERATING CASH 77\n\nCASH FLOW MARGIN\n\nFLOW RATIO\n\nOperating cash flow compared to\n\nTotal debt is compared to operating\n\nrevenue. It shows how much of\n\ncash flow. It shows how many years it\n\neach dollar of revenue is\n\nwould take for a company to pay\n\nconverted into cash flow.\n\noff its debt using its operating cash flow.\n\nFollow Brian FFeorlololdwi o Bnr ian Feroldi on LongTermMindset.co\n\nNNEETT\n\nFFRREEEE\n\nIINNCCOOMMEE CCAASSHH FFLLOOWW\n\nBRIAN FEROLDI\n\nACCOUNTING ACCOUNTING\n\nAccrual Accounting Cash Accounting\n\nFollow Brian Feroldi on LongTermMindset.co\n\nACCRUAL CASH\n\nAACCCCOOUUNNTTIINNGG\n\nBRIAN FEROLDI\n\nACCRUAL CASH\n\nMETHOD METHOD\n\nWHAT IT FOCUSES ON: WHAT IT FOCUSES ON:\n\nIncome Earned vs Cash Inflow vs\n\nExpenses Incurred Cash Outflow\n\nUSED ON: USED ON:\n\nIncome Statement\n\nCash Flow Statement\n\n& Balance Sheet\n\nPROS: PROS:\n\nGAAP Compliant\n\nEasy to create\n\nProvides a smoothed-out\n\nMore natural accounting\n\nview of expenses & profits\n\nCONS: CONS:\n\nMight not accurately show the\n\nResults can be lumpy\n\ncash flow of a business\n\nReaders may not grasp\n\nMore time-consuming to\n\nthe full picture of what is\n\ncreate\n\nhappening in the business\n\nUnderstates revenues of\n\nNot compliant with GAAP\n\nbusinesses that charge\n\naccounting\n\nupfront\n\nUSED BY: USED BY:\n\nLarge businesses\n\nSmall businesses\n\n& public copmanies\n\nFollow Brian FFeorlololdwi o Bnr ian Feroldi on LongTermMindset.co\n\n8\n\nCASH FLOW STATEMENT\n\nYYEELLLLOOWW FFLLAAGGSS\n\nBRIAN FEROLDI\n\n1: Negative\n\n2: Stock-Based\n\nNet Income\n\nCompensation\n\nMore Than 10%\n\nof Net Income\n\n3: Operating\n\nCash Flow\n\nLower Than\n\nNet Income\n\n4: Free Cash\n\n5: Capital Flow\n\nExpenditures Lower Than\n\nMore Than 25% Net Income\n\nof Net Income\n\n6: Excessive\n\nDebt Issuance\n\n7: Excessive\n\nStock Issuance\n\n8: Cash\n\nBalance\n\nDeclining\n\nFollow Brian Feroldi on LongTermMindset.co\n\n9 CASH FLOW STATEMENT\n\nGREEN FLAGS\n\nBRIAN FEROLDI\n\n1: Net Income 2: Stock-Based\n\nPositive & Compensation\n\nGrowing Less Than 10%\n\nof Net Income\n\n3: Operating\n\nCash Flow\n\nHigher Than\n\nNet Income\n\n4: Free Cash\n\nFlow Higher\n\n5: Capital\n\nThan\n\nExpenditures\n\nNet Income\n\nLess Than 25%\n\nof Net Income\n\n6: Debt\n\nReduction\n\n77:: SSttoocckk\n\nRReeppuurrcchhaassee\n\n8: Dividends\n\nPaid\n\n9: Cash\n\nBalance\n\nIncreases\n\nFollow Brian Feroldi on LongTermMindset.co\n\nEBITDA\n\nFCF\n\nBY BRIAN FEROLDI\n\nEARNINGS BEFORE INTEREST, TAXES, FREE CASH FLOW\n\nDEPRECIATION & AMORTIZATION\n\nNET INCOME NET INCOME\n\nDEPRECIATION AND AMORTIZATION DEPRECIATION AND AMORTIZATION\n\nNON-OPERATING INCOME AND EXPENSES NON-CASH INCOME AND EXPENSES\n\nINTEREST CHANGES IN NET WORKING CAPITAL\n\nINCOME TAX EXPENSE CAPITAL EXPENDITURES (CAPEX)\n\nEBITDA measures a company's ability to FCF measures a company’s ability to\n\ngenerate profits before considering non- generate cash from operations using\n\noperating expenses such as interest, taxes, cash accounting after deducting capital\n\ndepreciation, and amortization. expenditures (CAPEX).\n\nPROS PROS\n\n11.. Comparability: EBITDA allows companies with\n\n11..Focus on Cash: FCF directly measures the cash\n\ngenerated by a company's operations.\n\ndifferent capital structures to be compared.\n\n22.. 22.. Flexibility: FCF is a better measure of a\n\nSimplicity: EBITDA provides a quick snapshot of\n\ncompany’s ability to pay off debt and return\n\na company’s profit performance.\n\ncapital to shareholders", "proposal_file": "document-review/proposals-20260624-090104/009-pay-off-its-current.md" }, { "source_file": "Accounting Explained Visually - eBook.pdf", "source_sha256": "3dc5f1494e5222e39447b586527b070c9c291e93a0e01787fbd8c6862f570a2a", "chunk": 10, "page_start": 40, "page_end": 44, "suggested_title": "33.. Proxy for Cash Generation: EBITDA is often used", "situation": "learning-planning", "keywords": [ "depreciation", "cost", "asset", "life", "used", "useful", "value", "years" ], "key_lines": [ "33.. Proxy for Cash Generation: EBITDA is often used", "33.. Hard To Manipulate: FCF is much harder for a", "as a fast way to measure a company's ability to", "management team to manipulate than EBITDA", "generate cash from its core operations." ], "closest_card": "cards/06-smart-leaders-say-no.md", "similarity": 0.052921074689760025, "decision": "new-card-candidate", "text": "33.. Proxy for Cash Generation: EBITDA is often used\n\n33.. Hard To Manipulate: FCF is much harder for a\n\nas a fast way to measure a company's ability to\n\nmanagement team to manipulate than EBITDA\n\ngenerate cash from its core operations.\n\nor Net Income\n\nCONS CONS\n\n11..Ignores Non-Operating Expenses: EBITDA 11.. Complexity: There are many varieties of FCF, which\n\nexcludes important expenses such as interest, can make them time-consuming to calculate\n\ntaxes, depreciation, and amortization. 22.. Volatility: FCF can fluctuate widely from year to\n\n22.. Lack of Cash Flow Information: EBITDA does not year due to changes in working capital needs and\n\nprovide accurate insights into a company's ability capital expenditure spending cycles.\n\nto generate cash. 33.. Limited Comparability: Comparing FCF across\n\n33.. Susceptible to Manipulation: EBITDA can be industries is challenging due to differences in\n\nmanipulated by adjusting accounting practices, accounting practices and capital structures.\n\nmaking it less reliable.\n\nFollow Brian FFeorlololdwi o Bnr ian Feroldi on LongTermMindset.co\n\nOTHER\n\nACCOUNTING\n\nGG RR OO SS SS\n\nGG RR OO SS SS\n\nPP RR OO FF II TT\n\nMM AA RR GG II NN\n\nBRIAN FEROLDI\n\nGROSS PROFIT GROSS MARGIN\n\nWHAT WHAT\n\nThe difference between total A profitability ratio that\n\nrevenue and cost of goods sold. shows the percentage of sales\n\nthat become gross profit.\n\nFORMULA FORMULA\n\n(REVENUE - COST OF GOODS SOLD)\n\nREVENUE - COST OF GOODS SOLD\n\nREVENUE\n\nRESULT RESULT\n\nThe amount of revenue remaining\n\nThe percentage of each dollar of\n\nafter all costs to produce the\n\nproduct or service have been sales that becomes gross profit.\n\nsubtracted.\n\nFollow Brian FFeorlololdwi o Bnr ian Feroldi on LongTermMindset.co\n\n66 Depreciation Methods\n\nBY BRIAN FEROLDI\n\nDEPRECIATION\n\nDepreciation is an accounting method used to allocate the cost of tangible assets (such as\n\nbuildings. machinery, and vehicles) over their useful lives. It represents the systematic\n\nreduction in the value of an asset due to wear and tear, obsolescence, or other factors.\n\nTYPE DESCRIPTION FORMULA\n\nThe most common and easiest method. Simply\n\nCost\n\nSTRAIGHT - LINE divide the cost of an asset by its estimated useful\n\nUseful Life\n\nlife (in years).\n\nOpening book value\n\nDECLINING Used to calculate large depreciation expenses or Depreciation rate (%)\n\nassets that quickly lose value. Multiply the\n\nBALANCE\n\nopening book value by the depreciation rate. 100%\n\nUseful Life of asset\n\nOpening book value\n\nUsed when a larger depreciation value is needed\n\nDOUBLE\n\nin the first years of an asset’s life. The method Depreciation rate (%)\n\nDECLINING differs from regular declining balance\n\ndepreciation only in the fact that depreciation 100%\n\nBALANCE 2\n\nrate is multiplied by 2.\n\nUseful Life of asset\n\nAn accelerated depreciation method makes the\n\nSUM - OF - THE - Useful life\n\nexpense higher in the early years and lower in the Cost\n\nSum of the\n\nlatter years. Multiply the cost of an asset by its\n\nYEARS DIGITS\n\nyears digits\n\nuseful life over the sum of the years digits.\n\nMODIFIED\n\nMACRS system puts assets into classes with\n\nACCELERATED COST Opening Book Value\n\nspecific depreciation periods and assigns\n\nspecific pre-defined percentages of each year\n\nRECOVERY SYSTEM\n\nMARCS Depreciation rate\n\nfor different asset classes.\n\n(MARCS)\n\nMainly used for transport vehicle since it takes\n\nCost\n\nHours used\n\ninto consideration \"running time\" of the asset.\n\nSERVICE HOUR in a year\n\nService life\n\nDivide the asset's net cost by its service life and\n\nmultiply by its hours used in a year.\n\nDEPRECIATION HAPPENS TO TANGIBLE ASSETS (YOU CAN TOUCH THEM)\n\nCAR EQUIPMENT BUILDING\n\nFollow Brian FFeorlololdwi o Bnr ian Feroldi on LongTermMindset.co\n\nWarren Buffett's\n\nFinancial Statements Rules of Thumb\n\nBY BRIAN FEROLDI", "proposal_file": "document-review/proposals-20260624-090104/010-33-proxy-for-cash-generation-ebitda-is-often-used.md" }, { "source_file": "Accounting Explained Visually - eBook.pdf", "source_sha256": "3dc5f1494e5222e39447b586527b070c9c291e93a0e01787fbd8c6862f570a2a", "chunk": 11, "page_start": 44, "page_end": 46, "suggested_title": "METRIC EQUATION THRESHOLD", "situation": "learning-planning", "keywords": [ "revenue", "margin", "profit", "gross", "income", "net", "cash", "total" ], "key_lines": [ "Cash & Debt Cash > Debt Cash > Debt", "Adjusted Debt to Equity Shareholder Equity + Below 0.80", "Treasury Stock Treasury Stock > 1 Exists", "Follow Brian Feroldi on LongTermMindset.co", "Recurring revenue is more valuable than Non-Recurring" ], "closest_card": "cards/05-strategy-workflow-os.md", "similarity": 0.05944579708444941, "decision": "new-card-candidate", "text": "METRIC EQUATION THRESHOLD\n\nGross Gross Profit\n\n>40%\n\nMargin Revenue\n\nSG&A SG&A\n\n<30%\n\nMargin Gross Profit\n\nR&D R&D\n\n<30%\n\nMargin Gross Profit\n\nDepreciation\n\nDepreciation Margin <10%\n\nGross Profit\n\nINCOME\n\nInterest Interest\n\nSTATEMENT\n\n<15%\n\nMargin Operating Income\n\nCorporate\n\nTax Taxes\n\nMargin Pre-Tax Income Tax Rate\n\nNet Income Net Income\n\n>20%\n\nMargin Revenue\n\nPositive &\n\nEPS Year 2 EPS\n\nGrowth Year 1 EPS Growing\n\nCash & Debt Cash > Debt Cash > Debt\n\nTotal Liabilities\n\nAdjusted Debt to Equity Shareholder Equity + Below 0.80\n\nTreasury Stock\n\nBALANCE\n\nPreferred Stock NONE NONE\n\nSHEET\n\nConsistent\n\nYear 2 Retained Earnings\n\nRetained Earnings\n\nYear 1 Retained Earnings Growth\n\nTreasury Stock Treasury Stock > 1 Exists\n\nCASH FLOW Capex\n\nCapex Margin <25%\n\nSTATEMENT Net income\n\nFollow Brian Feroldi on LongTermMindset.co\n\n1100\n\nKKPPIISS\n\nEVERY INVESTOR\n\nSHOULD KNOW\n\nBY BRIAN FEROLDI\n\nKPI FORMULA DETAILS\n\nRecurring revenue is more valuable than Non-Recurring\n\nRECURING RECURRING REVENUE\n\nRevenue due to its predictability and stickiness.\n\nREVENUE SPLIT The higher the % of recurring revenue, the higher the\n\nTOTAL REVENUE\n\nvaluation multiple should be.\n\nGross Margin tells you how much revenue you get to keep\n\nGROSS PROFIT\n\nafter paying for the production of your product or service.\n\nGROSS MARGIN\n\nThe higher the Gross Margin, the more profit you keep for\n\nREVENUE\n\neach dollar in sales.\n\nNET PROFIT Net Profit Margin shows how much profit is left after ALL\n\nNET INCOME\n\ncosts and expenses have been deducted from revenue.\n\nMARGIN REVENUE\n\nThe higher the NPM, the more profitable your business.\n\nLifetime Value (LTV) measures how much gross profit each\n\ncustomer contributes to your bus each\n\nGROSS PROFIT SINCE INCEPTION\n\nLIFETIME VALUE\n\nLTV is driven by (1) profitability per transaction and (2)\n\n# OF CUSTOMERS\n\nnumber of transactions per customer.\n\nIncrease both to increase LTV.\n\nCUSTOMER\n\nCustomer Acquisition Cost (CAC) shows how much it costs\n\nMARKETING + SALES COSTS to acquire a new customer.\n\nACQUISITION\n\n# OF CUSTOMERS ACQUIRED Compare your LTV to your CAC. Ideally you should have\n\nCOST an LTV:CAC > 3.\n\nDAYS SALES Measures how quickly your customer pays their bills.\n\nACCOUNT RECEIVABLES\n\nX 365 DAYS\n\nIf Days Sales Outstanding (DSO) is higher than your credit\n\nOUTSTANDING SALES\n\nterms allow, you have a collection problem.\n\nDAYS PAYABLE ACCOUNT PAYABLES Measures how quickly your customer pays their bills.\n\nX 365 DAYS\n\nIdeally, Days Sales Outstanding (DSO) < Days Payables\n\nCOGS\n\nOUTSTANDING\n\nOustanding (DPO).\n\nMeasures how quickly you are burning through your cash\n\nCASH & CASH EQUIVALENTS\n\nreserves.\n\nCASH BURN RATE\n\nEspecially important in the early stages of a business or\n\nMONTHLY EXPENSES\n\nwhen there is a significant disruption in the market.\n\nMeasures whether you can meet your short-term\n\nCURRENT ASSETS\n\nobligations.\n\nCURRENT RATIO\n\nIf the Current ratio is below 1, it could indicate that your\n\nCURRENT LIABILITIES\n\nbusiness is in financial difficulty.\n\nGROSS REVENUE REVENUE LOST FOR THE PERIOD Measures the percentage of revenue lost during a period.\n\nSignificant increases are early warning signals of problems\n\nTOTAL REVENUE AT\n\nCHURN\n\nTHE START OF PERIOD with your product or processes\n\nFollow Brian FFeorlololdwi o Bnr ian Feroldi on LongTermMindset.co\n\nDUPONT ANALYSIS\n\nBRIAN FEROLDI\n\nWhat is DuPont Analysis?\n\nDupont analysis is a framework for understanding the drivers of Return On Equity (ROE).\n\nIt breaks down ROE into three major components.\n\nProfit Margin Total Asset Turnover Equity Multiplier\n\n(Operational Efficiency) (Asset Use Efficiency) (Financial Leverage)\n\nNet Income Revenues Average Assets\n\nDuPont\n\nRevenues Average Assets Average Equity\n\nDuPont Analysis\n\nReturn on Equity\n\nReturn on Assets Financing Leverage\n\nTotal Total\n\nProfit Margin\n\nAsset Turnover\n\nAssets Equity\n\nNet Total\n\nRevenue Revenue", "proposal_file": "document-review/proposals-20260624-090104/011-metric-equation-threshold.md" }, { "source_file": "Accounting Explained Visually - eBook.pdf", "source_sha256": "3dc5f1494e5222e39447b586527b070c9c291e93a0e01787fbd8c6862f570a2a", "chunk": 12, "page_start": 46, "page_end": 49, "suggested_title": "Income Assets", "situation": "learning-planning", "keywords": [ "income", "sales", "net", "equity", "cash", "profit", "debt", "000" ], "key_lines": [ "Follow Brian Feroldi on LongTermMindset.co", "GROSS MARGIN Percentage of Revenue that becomes Gross Profit.", "Percentage of Sales that becomes Earnings Before", "Taxes, Depreciation, and Amortization (EBITDA).", "OPERATING MARGIN Percentage of Sales that becomes Operating Income." ], "closest_card": "cards/19-salary-negotiation-and-pay-transparency.md", "similarity": 0.043421225887389524, "decision": "new-card-candidate", "text": "Income Assets\n\nYear 1 Year 2\n\nProfitCo\n\nNet Income $1,000 $1,200\n\nRevenue $10,000 $10,000\n\nProfit Margin 10% 12%\n\nRevenue $10,000 $10,000\n\nAverage Assets $5,000 $4,800\n\nAsset Turnover 2 2.08\n\nAverage Assets $5,000 $4,800\n\nAverage Equity $2,000 $2,000\n\nFinancial Leverage 2.5 2.4\n\n50% 60%\n\nROE\n\nFollow Brian Feroldi on LongTermMindset.co\n\n14 Profit Ratios\n\nBY BRIAN FEROLDI\n\nWHAT FORMULA\n\nGross Profit\n\nGROSS MARGIN Percentage of Revenue that becomes Gross Profit.\n\nSales\n\nPercentage of Sales that becomes Earnings Before\n\nEBITDA\n\nEBITDA MARGIN Interest,\n\nSales\n\nTaxes, Depreciation, and Amortization (EBITDA).\n\nOperating Income\n\nOPERATING MARGIN Percentage of Sales that becomes Operating Income.\n\nSales\n\nPercentage of Sales that becomes Earnings Before EBIT\n\nEBIT MARGIN\n\nInterest & Taxes (EBIT) are subtracted. Sales\n\nEBT MARGIN (PRE-TAX\n\nPercentage of Sales that becomes Earnings Before Taxes EBT\n\nMARGIN) (EBT), also known as the Pre-Tax Profit. Sales\n\nPercentage of Sales that becomes Earnings (Net Income) Net Income\n\nNET PROFIT MARGIN\n\nafter all costs are subtracted. Sales\n\nFREE CASH\n\nPercentage of Sales that becomes Free Cash Flow Free Cash Flow\n\nFLOW MARGIN (Cash Flow From Operations - Capital Expenditures). Sales\n\nEARNINGS PER SHARE\n\nHow much Profit (Net Income) a company makes on Net Income\n\n(EPS) a Per Share Basis. Shares Outstanding\n\nRETURN ON\n\nNet Income\n\nHow much Profit a company generates from its Assets.\n\nASSETS (ROA) Total Assets\n\nRETURN ON\n\nMeasures how Profit a company generates in relation to Net Income\n\nEQUITY (ROE) its Equity (the money shareholders have invested.) Equity\n\nMeasure how much Net Operating Profit After Tax\n\nRETURN ON INVESTED\n\nNOPAT\n\n(NOPAT) a company generates in relation to its Invested\n\nCAPITAL (ROIC) Total Invested Capital\n\nCapital.\n\nMeasures how much Earnings Before Interest & Taxes\n\nRETURN ON CAPITAL\n\nEBIT\n\n(EBIT) a company generates in relation to its Long Term\n\nEMPLOYED (ROCE) Long-Term Debt + Equity\n\nDebt & Equity.\n\nFREE CASH FLOW\n\nFree Cash Flow\n\nMeasures how much Net Income becomes Free Cash Flow.\n\nCONVERSION Net Income\n\nNet Income + (Depreciation &\n\nOWNER'S\n\nMeasures how much cash can be taken out of the Amortization) +/- Non Cash\n\nEARNINGS business and given to owner. Charges - Maintenance Capex +/-\n\nChanges in Working Capital\n\nFollow Brian Feroldi on LongTermMindset.co\n\nG A A P V S N O N - G A A P\n\nA C C O U N T I N G\n\nBRIAN FEROLDI\n\nNon-\n\nGAAP\n\nGAAP\n\nAudited? Yes No\n\nStandardized? Yes No\n\nUsually\n\nStock-Based Compensation Included\n\nExcluded\n\nNon-Recurring Charges\n\nAcquisition Expenses\n\nCurrency Movements\n\nEarly Debt Redemption Costs\n\nUsually\n\nFines/Penalties\n\nIncluded\n\nLitigation\n\nExcluded\n\nPension\n\nRelocation Expenses\n\nRestructuring Charges\n\nUnusual Taxes\n\nPaper Gains/Losses Usually\n\nIncluded\n\nOn Investments Excluded\n\nEBITDA? No Yes\n\nProfits Usually Look Worse Better\n\nFollow Brian FFeorlololdwi o Bnr ian Feroldi on LongTermMindset.co\n\nEEQQUUIITTYY\n\nDDEEBBTT\n\nBRIAN FEROLDI\n\nWHAT DEBT IS WHAT EQUITY IS\n\nMoney lent by creditors who will eventually Money given to the company by investors in\n\nbe paid back with interest exchange for ownership of the company\n\nWHERE TO FIND DEBT WHERE TO FIND EQUITY\n\nCOMMON TYPES OF DEBT COMMON TYPES OF EQUITY\n\nLong-Term Debt Convertible Notes Line of Credit Common Stock Preferred Stock\n\nPROS OF ISSUING DEBT PROS OF ISSUING EQUITY\n\nYou don't need to give up ownership You don't have to pay the money back\n\nYou know how much you need to pay back Aligns the company’s interests with investors\n\nCONS OF ISSUING DEBT CONS OF ISSUING EQUITY\n\nCan be expensive Expensive way to raise capital if the business\n\nDebt holders are paid on a rigid schedule succeeds\n\nCan lead to bankruptcy If too much equity is sold, the founders can lose\n\ncontrol of the company\n\nJOURNAL ENTRY JOURNAL ENTRY\n\nDebt: Cash Debt: Cash", "proposal_file": "document-review/proposals-20260624-090104/012-income-assets.md" }, { "source_file": "Accounting Explained Visually - eBook.pdf", "source_sha256": "3dc5f1494e5222e39447b586527b070c9c291e93a0e01787fbd8c6862f570a2a", "chunk": 13, "page_start": 49, "page_end": 52, "suggested_title": "When issuing When issuing", "situation": "strategy-workshop", "keywords": [ "earnings", "company", "income", "measures", "net", "profit", "ratio", "interest" ], "key_lines": [ "Follow Brian FFeorlololdwi o Bnr ian Feroldi on LongTermMindset.co", "Net Income COGS (Cost of Goods Sold)", "Before Interest, Taxes, + Taxes =EBITDA and Taxes)", "Requires information It does not take into", "from the company's account all business" ], "closest_card": "cards/19-salary-negotiation-and-pay-transparency.md", "similarity": 0.03717625490401442, "decision": "new-card-candidate", "text": "When issuing When issuing\n\ndebt... equity...\n\nCredit: Common Stock /\n\nCredit: Debt\n\nPreferred Stock\n\nFollow Brian FFeorlololdwi o Bnr ian Feroldi on LongTermMindset.co\n\nBY BRIAN FEROLDI\n\nDividends\n\n(To Owners)\n\nTBE\n\nTAE\n\nER\n\nEEBBIITTDDAA EXPLAINED\n\nSIMPLY\n\nGross Profit = Revenue -\n\nNet Income COGS (Cost of Goods Sold)\n\nWHAT IS EBITDA?\n\n+ Interest Operating Profit = EBIT\n\nEBITDA = Earnings\n\n(Earnings Before Interest\n\nBefore Interest, Taxes, + Taxes =EBITDA and Taxes)\n\nDepreciation\n\nNet Profit = EAT (Earnings\n\n+ Depreciation\n\n& Amortization\n\nAfter Taxes)\n\n+ Amortization\n\nRetained Earnings = RE\n\nEBITDA\n\nA major financial\n\nRequires information It does not take into\n\nindicator used for\n\nfrom the company's account all business\n\nevaluating the\n\nIncome Statement and activities and it might\n\nprofitability of companies\n\nCash Flow Statement. overstate cash flow.\n\nwith different capital\n\nstructures.\n\n)EUNEVER(\n\nSELAS\n\nTIFORP\n\nSSORG\n\nADTIBE\n\nTIBE\n\nCost of Goods Sold (To Suppliers)\n\nGeneral Expenses (To Employees)\n\nEquipment Depreciation &\n\nIntangible Amortization\n\nInterest (To Creditors)\n\nTaxes\n\n(To Government)\n\nFollow Brian Feroldi on LongTermMindset.co\n\nKey Financial Ratios\n\nBRIAN FEROLDI\n\nIDEAL\n\nCATEGORY RATIO FORMULA EXPLANATION\n\nRANGE\n\nInventory Cost of Goods Sold Measures how many times a company's\n\nVaries\n\nTurnover Average Inventory inventory is sold and replaced over a period\n\nEfficiency\n\nRatios\n\nAsset Sales Measures a firm's efficiency at using its assets in\n\nVaries\n\nTurnover Total Assets generating sales or revenue\n\nCurrent Current Assets Measures a company's ability to pay\n\n1.5 - 2.0\n\nRatio Current Liabilities short-term obligations\n\nLiquidity\n\nRatios\n\nQuick (Current Assets - Inventory) Another liquidity ratio, but excludes inventory\n\n1.0 - 1.5\n\nRatio Current as it is less liquid\n\nCoverage\n\nInterest Coverage EBIT Measures how easily a company can pay interest\n\n> 1.5\n\nRatios Ratio Interest Expenses expenses on its outstanding debt\n\nReturn on Net Income Measures how efficiently a company uses is\n\n> 5%\n\nAssets (ROA) Total Assets assets to generate income\n\nReturn on Net Income Measures how efficiently a company uses its\n\n> 15%\n\nProfitability Equity (ROE) Shareholder's Equity equity to generate income\n\nRatios\n\nGross Gross Profit Measures how much out of every dollar of sales\n\n> 40%\n\nMargin Revenue a company actually keeps as gross profit\n\nNet Profit Net Income Measures how much out of every dollar of sales\n\n> 10%\n\nMargin Revenue a company actually keeps in earnings\n\n30% -\n\nDividend Payout Dividends Measures what proportion of earnings are paid\n\nDividend Ratio Net Income to shareholders as dividends 70%\n\nRatios\n\nDividend Annual Dividends per Share Shows how much a company returns in\n\n2% - 4%\n\nYield Price per Share dividends each year relative to its share price\n\nLeverage\n\nDebt to Total Debt A leverage ratio that compares a company's\n\n< 2.0\n\nRatios Equity Ratio Total Equity total debt with its total equity\n\nPositive\n\nEarnings Per Net Income Measures the profit allocated to each share of\n\nShare (EPS) Shares Outstanding common stock Value\n\nMarket\n\nValue Price to Earnings Stock Price Measures the price you pay for each dollar of\n\n15 -25\n\nRatio (P/E) Earnings Per Share earnings\n\nRatios\n\nPrice to Sales Stock Price\n\nCompares a company's market value to its sales < 3.0\n\n(P/S) Sales Per Share\n\nFollow Brian Feroldi on LongTermMindset.co\n\n2200\n\nFINANCE\n\nMOST CONFUSING\n\nTERMS\n\nBY BRIAN FEROLDI\n\nFIXED COSTS VARIABLE COSTS EBITDA NET INCOME\n\nCosts that do not change Costs that vary with Earnings before interest, Total profit after all\n\nwith production volume. production or sales volume. taxes, depreciation, and expenditures have been\n\nsubtracted.\n\namortization.\n\nPROFIT REVENUE CAPEX OPEX\n\nNet earnings after Total income generated from Funds used by a company to Day-to-day expenses to run", "proposal_file": "document-review/proposals-20260624-090104/013-when-issuing-when-issuing.md" }, { "source_file": "Accounting Explained Visually - eBook.pdf", "source_sha256": "3dc5f1494e5222e39447b586527b070c9c291e93a0e01787fbd8c6862f570a2a", "chunk": 14, "page_start": 52, "page_end": 55, "suggested_title": "ACCRUAL CASH ACCOUNTING MARKET CAP ENTERPRISE VALUE", "situation": "learning-planning", "keywords": [ "cash", "days", "outstanding", "inventory", "expenses", "revenue", "sales", "brian" ], "key_lines": [ "deducting all expenses. product & service sales. acquire, upgrade, and the business.", "ACCRUAL CASH ACCOUNTING MARKET CAP ENTERPRISE VALUE", "Recording revenues and Recording revenues and Total value of a Total value of a company,", "expenses when they are expenses only when cash is company's outstanding including debt and excluding", "ASSETS LIABILITIES GROSS MARGIN NET MARGIN" ], "closest_card": "cards/41-strategic-influence-perception.md", "similarity": 0.034580284758928846, "decision": "new-card-candidate", "text": "deducting all expenses. product & service sales. acquire, upgrade, and the business.\n\nmaintain physical assets.\n\nACCRUAL CASH ACCOUNTING MARKET CAP ENTERPRISE VALUE\n\nRecording revenues and Recording revenues and Total value of a Total value of a company,\n\nexpenses when they are expenses only when cash is company's outstanding including debt and excluding\n\nincurred, regardless of when\n\nexchanged. shares. cash.\n\ncash is exchanged.\n\nASSETS LIABILITIES GROSS MARGIN NET MARGIN\n\nAll resources owned and All obligations a company Revenue minus cost of goods Net profit divided by\n\ncontrolled by a company. owes to others. sold, divided by revenue. revenue.\n\nRETURN ON RETURN ON FINANCIAL OPERATING\n\nINVESTMENT EQUITY LEVERAGE LEVERAGE\n\nMeasures profitability Measures profitability The use of debt in capital The use of fixed vs. variable\n\nrelative to total relative to shareholders’ structure to amplify net expenses to amplify\n\ninvestment. equity. income. operating income.\n\nFollow Brian Feroldi on LongTermMindset.co\n\nCOSTS VS EXPENSES\n\nBY BRIAN FEROLDI\n\nCOSTS EXPENSES\n\nDEFINITION DEFINITION\n\nThe value of resources The outflow of\n\nused to produce goods resources to generate\n\nor services. revenue.\n\nTIMING TIMING\n\nIncorporated in Incorporated throughout\n\ncost of goods sold. the income statement.\n\nNATURE NATURE\n\nDirect costs associated Includes direct and\n\nwith production. indirectt expenses.\n\nVARIABILITY VARIABILITY\n\nCan be fixed or Can be fixed or\n\nvariable. variable.\n\nPERIODICITY PERIODICITY\n\nTied to production Incurred over time, not\n\nactivities, occurring necessarily tied to\n\nduring manufacturing. production.\n\nAPPLICATION APPLICATION\n\nRefers to the production Encompasses a broad\n\nof goods or delivery of rage on business\n\nservices. expenditures.\n\nMANAGEMENT MANAGEMENT\n\nEmphasizes optimizing Focuses on managing\n\nproduction and operational\n\nprocurement costs. expenditures.\n\nREVENUE REVENUE\n\nLinked to the production Often incurred to\n\nof goods or services for support the generation\n\nsale. of revenue.\n\nCLASSIFICATION CLASSIFICATION\n\nVariable Operating or Non-\n\nor Fixed costs. Operating\n\nCosts and Expenses are both business Expenditures.\n\nFollow Brian Feroldi on LongTermMindset.co\n\nCASH CONVERSION CYCLE\n\nBRIAN FEROLDI\n\nThe Cash Conversion Cycle (CCC) evaluates\n\nhow efficiently a company manages working capital\n\nCCC measures how long cash is tied up in working capital\n\n(RECEIVABLES + INVENTORY - PAYABLES)\n\nINVENTORY\n\nDays\n\nInventory\n\nOutstanding\n\nACCOUNTS ACCOUNTS\n\nPAYABLE RECEIVABLES\n\nDays\n\nDays\n\nAccounts\n\nAccounts\n\nPayable Receivable\n\nOutstanding Outstanding\n\nCASH\n\nDAYS INVENTORY OUTSTANDING (DIO) Purchase Inventory Pay Supplier for Sell Inventory Collect Payment\n\nfrom Supplier Inventory to customer from customer\n\n( Average Inventory )\n\nNumber of Days\n\nCost of Good Sold\n\nCash Out Cash In\n\nDAYS SALES OUTSTANDING (DSO) Days Inventory\n\nDIO\n\n( Average Accounts Receivable ) Outstanding\n\nNumber of Days\n\nTotal Credit Sales Days Sales DSO\n\nOutstanding\n\nDAYS PAYABLE OUTSTANDING (DPO) Days Payable DPO\n\nOutstanding\n\n( Average Accounts Payable ) Number of Days\n\nCash Conversion DIO + DSO - DPO\n\nCost of Good Sold Cycle\n\nFollow Brian FFeorlololdwi o Bnr ian Feroldi on LongTermMindset.co\n\nFINANCIAL STATEMENTS\n\nYY EE LL LL OO WW FF LL AA GG SS\n\nBRIAN FEROLDI\n\nBALANCE\n\nINCOME\n\nOTHERS\n\nSHEET STATEMENT\n\nGoodwill Revenue\n\nSudden Change\n\nMore Than Sudden Slowdown\n\nin Auditor\n\n50% of Assets In Growth Rate\n\nReceivables\n\nGross Margin Negative\n\nRising Faster\n\nDeclining Auditor Opinion\n\nthan Sales\n\nFrequent, Large\n\nInventory\n\nSudden Exits of\n\n\"Extraordinary\"\n\nRising Faster\n\nTop Managers\n\nthan Profits Charges\n\nDebt\n\nTax Rate Reduced\n\nBecoming\n\nSuddenly Declines Disclosures\n\nExcessive\n\nCash Net Profit Excessive\n\nManagement\n\nLess Than 25% of Lower than Cash From\n\nTotal Debt Operations Compensation\n\nSales & Marketing", "proposal_file": "document-review/proposals-20260624-090104/014-accrual-cash-accounting-market-cap-enterprise-value.md" }, { "source_file": "Accounting Explained Visually - eBook.pdf", "source_sha256": "3dc5f1494e5222e39447b586527b070c9c291e93a0e01787fbd8c6862f570a2a", "chunk": 15, "page_start": 55, "page_end": 58, "suggested_title": "Retained Earnings Excessive", "situation": "before-1on1", "keywords": [ "income", "than", "cash", "interest", "brian", "feroldi", "assets", "net" ], "key_lines": [ "Follow Brian Feroldi on LongTermMindset.co", "Growing Slower Than No Short-Term or Long", "Deferred Revenue Operating Cash Flow", "Net Income Grows Faster Treasury Stock", "Follow Brian Feroldi on LongTermMindset.co" ], "closest_card": "cards/47-decision-heuristics-cheat-sheet.md", "similarity": 0.026813784696483187, "decision": "new-card-candidate", "text": "Retained Earnings Excessive\n\nExpenses\n\nAre Negative Dilution\n\nRising Faster Than Revenue\n\nFollow Brian Feroldi on LongTermMindset.co\n\nFINANCIAL STATEMENTS\n\nGREEN FLAGS\n\nBRIAN FEROLDI\n\nINCOME\n\nCASH FLOW\n\nSTATEMENT\n\nSTATEMENT\n\nBALANCE\n\nSHEET\n\nMore Cash Than Debt\n\nNo Accounts Receivables\n\nNo Inventory\n\nGoodwill Less Than 10% of\n\nAccelerating Revenue\n\nTotal Assets\n\nGrowth\n\nNet Income Positive &\n\nCurrent Liabilities Less\n\nGross Margin Expansion\n\nGrowing\n\nThan Cash\n\nOperating Expenses\n\nStock-Based\n\nGrowing Slower Than No Short-Term or Long\n\nCompensation Less Than\n\nRevenue\n\nTerm Debt 10% of Net Income\n\nOperating Margin Expands\n\nDeferred Revenue Operating Cash Flow\n\nInterest Income Exceeds\n\nHigher Than Net Income\n\nNo Preferred Stock\n\nInterest Expenese\n\nCapital Expenditures\n\nRetained Earnings Positive\n\nPre-Tax Margin Expands\n\nLess Than 10% of Net\n\nIncome Tax Rate Near 21% & Growing\n\nIncome\n\nNet Income Grows Faster Treasury Stock\n\nFree Cash Flow Higher\n\nThan Revenue\n\nThan Net Income\n\nShares Outstanding\n\nStock Repurchase\n\nDeclines\n\nDividends Paid\n\nEarnings Per Share\n\nCash Balance Increase\n\nConsistently Grows\n\nFollow Brian Feroldi on LongTermMindset.co\n\nBY BRIAN FEROLDI\n\nD&R\n\nA&GS\n\nPP&&LL SSTTAATTEEMMEENNTT\n\nVISUALIZED\n\nPROFIT AND LOSS STATEMENT\n\nCosts of Goods Sold\n\n(To Suppliers & Manufacturing Employees)\n\nResearch & Development Expense\n\n(To Engineering & Research Employees)\n\nCost of Interest on Debt\n\n(To Banks & Bond Holders)\n\nTax Expense\n\n(To Governments)\n\ne\n\nC R o e s v t e o n f u G o o d a s r G S c r o h o l d s & s D P r e a r v o l, e f & i l t o A p d m m e i n n O t i s p r e a r t a i v t I i e n n g t e P r E e r a s o r t f n i E t i x n p g e s n B s e e f o r e I T n a c x o m e N T e a t x I n c o m e\n\ne e\n\ns n\n\ne e\n\nR G\n\ng,\n\nn\n\nelli\n\nS\n\neuneveR\n\nSGOC\n\nPG PO\n\nTBE\n\nIN\n\nSelling, General, & Administrative Expense\n\n(All Remaining Overhead Expenses)\n\nFollow Brian Feroldi on LongTermMindset.co\n\nIIFFRRSS GGAAAAPP\n\nBRIAN FEROLDI\n\nDATA SOURCE:\n\nIFRS GAAP\n\nFINANCIAL STATEMENTS PRESENTATION\n\nINCOME STATEMENT 2 years allowed 3 years required\n\nIncreasing order of liquidity. Decreasing order of liquidity.\n\nBALANCE SHEET\n\nCurrent before non-current Non-Current before current.\n\nCASH FLOW Flexibility with location of interest expense, Interest expense, interest income and dividends received in\n\nCash from Operations; bank overdrafts are classified as\n\nSTATEMENT interest income and dividends financing activities\n\nIMTERIM REPORTS Each interim period is an integral part of fiscal year Each interim period is an integral part of fiscal year\n\nThe accounting policies for subsidiaries do not need to be\n\nACCOUNTING\n\nThe accounting policies for subsidiaries need uniform. However variations in accounting policies should be\n\nPOLICIES to be uniform disclosed in consolidated financial statements.\n\nRECOGNITION AND CLASSIFICATION\n\nRESEARCH & Development is capitalized when specific conditions are All R&D is expensed, exceptions include software for\n\nDEVELOPMENT COST met. Research is always expensed. external use and movies\n\nDeferred Tax Assets are only recognized as assets All deferred tax assets (DAs) are recognized and netted\n\nINCOME TAXES when probable (>50%), so there is no need for out/offset with a valuation allowance when it is more likely than\n\nvaluation allowances not (>50%) that the company will not be able to use the DTA\n\nINVESTMENT\n\nA separate category Not separate from Property, Plane, & Equipment\n\nPROPERTY\n\nMeasured at fair value, separate from Inventory,\n\nBIOLOGICAL ASSETS Included in Inventory\n\nincluded in fixed assets\n\nCategories for operating and finance leases on\n\nLEASES Single category on balance sheet (e.g. Rights of use) balance sheet\n\nCONTINTGENT Recognized when > 50% likely, Recognized when > 75% likely,\n\nLIABILITY measurement methods differ measurement methods differ", "proposal_file": "document-review/proposals-20260624-090104/015-retained-earnings-excessive.md" }, { "source_file": "Accounting Explained Visually - eBook.pdf", "source_sha256": "3dc5f1494e5222e39447b586527b070c9c291e93a0e01787fbd8c6862f570a2a", "chunk": 16, "page_start": 58, "page_end": 62, "suggested_title": "CONSOLIDATION", "situation": "learning-planning", "keywords": [ "assets", "value", "net", "working", "capital", "debt", "current", "fair" ], "key_lines": [ "Push-down accounting is not allowable; there is an Push-down accounting is required in certain", "option to record Non Controlling interest at its circumstances for public companies and is optional", "proportionate interest in the net assets or at fair for private companies; non-controlling interest (NCI)", "market value to be recorded at fair market value", "LIFO allowed with other methods, Method can vary across" ], "closest_card": "cards/06-smart-leaders-say-no.md", "similarity": 0.07715167498104596, "decision": "new-card-candidate", "text": "Push-down accounting is not allowable; there is an Push-down accounting is required in certain\n\noption to record Non Controlling interest at its circumstances for public companies and is optional\n\nCONSOLIDATION\n\nproportionate interest in the net assets or at fair for private companies; non-controlling interest (NCI)\n\nmarket value to be recorded at fair market value\n\nMEASUREMENT\n\nLIFO allowed with other methods, Method can vary across\n\nLIFO not allowed, Same method required with Inventory of Inventory groups. This cost method is used primarily for oil\n\nINVENTORIES similar nature; write- backs of previously recognised write and gas companies to minimise taxable income. No permit\n\ndowns to net realisable value. Same measurement formula is write-backs of previously recognised write-downs to net\n\nrequired to the all inventories of same nature realisable value. Not required that an entity use the same\n\nformula for all inventories.\n\nIRS allows companies to elect fair value treatment of fixed\n\nFixed assets are measured at their initial cost; their value\n\nassets, meaning their reported value can increase or decrease\n\nFIXED ASSETS can decrease via depreciation or impairments, but it\n\nas their fair value changes. In addition, IRS requires separate\n\ncannot increase\n\ndepreciation processes for separable components of PP&E\n\nINTANGIBLES Fair value allowed Historical cost\n\nIRS 15, effective 2018 - Converged standard focusing on a ASC 606, effective 2018 - US GAAP allows an entity to make a\n\nconceptual framework using a 5-step process for recognizing policy election to account for shipping and\n\nrevenue. Minor differences in implementation and updates. handling activities that occur after the customer has obtained\n\nREVENUES Revenue for similar licenses under IRS 15 may be recognized control of a good as an activity to fulfill the promise to transfer\n\nat a point in time if the reporting entity undertakes no activities the good rather than as an additional promised service;\n\nthat significantly affect the ability of the customer to obtain revenue for all licenses to symbolic intellectual property is\n\nbenefit from the intellectual property recognised over time under US GAAP\n\nSIMILARITIES IN RECENT CHANGES\n\nIRS 16 effective 2019. ASC 842 effective 2019.\n\nLeases over 12 months recognized as Right of Use Assets on Leases over 12 months recognized as Right of Use Assets on\n\nLEASES\n\nBalance Sheet with corresponding Lease Liabilities. Balance Sheet with corresponding Lease Liabilities.\n\nNo Finance/Operating Lease categories. Distinguishes between Operating and Finance Leases.\n\nNo change. ASU 2015-03\n\nDEBT ISSUANCE\n\nDebt issuance costs are netted Debt issuance costs are now netted\n\nCOSTS against the outstanding debt against the outstanding debt\n\nFollow Brian FFeorlololdwi o Bnr ian Feroldi on LongTermMindset.co\n\nWWOORRKKIINNGG CCAAPPIITTAALL\n\nBRIAN FEROLDI\n\nWorking Capital measures the difference between a\n\ncompany’s Current Assets and Current Liabilities.\n\nWorking Capital (also called Net Working Capital), measures\n\na company’s liquidity and short-term financial health.\n\n3 WAYS TO CALCULATE NET WORKING CAPITAL\n\nSIMPLE Current Assets Current Liabilities Net Working Capital\n\nCurrent Assets Current Liabilities\n\nNARROW Net Working Capital\n\n(Minus Cash) (Minus Debt)\n\nAccounts Accounts\n\nSPECIFIC Inventory Net Working Capital\n\nReceivable Payable\n\nFollow Brian Feroldi on LongTermMindset.co\n\nThanks for reading!\n\nI highly recommend using Finchat.io\n\nto analyze financial statements.\n\nClick here to try it\n\nHere’s a link to a FREE course\n\non how to use Finchat.io.\n\nClick Here To Enroll For Free\n\nThanks for reading!\n\nConnect with me below!\n\nBrian Feroldi\n\n(Click The Icons To Connect)", "proposal_file": "document-review/proposals-20260624-090104/016-consolidation.md" }, { "source_file": "Applying MBA Knowledge in Engineering.pptx", "source_sha256": "f95a0c77d4e03cccfac574dbd95cd4f409a4e012ac358100fe517028438299f9", "chunk": 1, "page_start": 1, "page_end": 2, "suggested_title": "1. Strategy & Decision-Making", "situation": "strategy-workshop", "keywords": [ "engineering", "financial", "capital", "project", "projects", "ensuring", "strategic", "operational" ], "key_lines": [ "Long-term capital planning aligned with corporate goals:", "Engineering project portfolio optimization using strategic frameworks:", "Applying BCG Matrix, McKinsey 7S, and Porter’s Five Forces to assess the viability, priority, and resource allocation of multiple engineering projects.", "Cost-benefit analysis for CAPEX projects:", "Evaluating the financial return on capital expenditures (CAPEX) by analyzing project costs, expected ROI, payback period, and potential operational cost savings." ], "closest_card": "cards/01-strategic-leadership-system.md", "similarity": 0.10263300046691455, "decision": "new-card-candidate", "text": "Draft\n\n1. Strategy & Decision-Making\n\nLong-term capital planning aligned with corporate goals:\n\nDeveloping a structured investment roadmap for engineering projects, ensuring alignment with company-wide strategic priorities, such as sustainability, digital transformation, and operational efficiency.\n\nEngineering project portfolio optimization using strategic frameworks:\n\nApplying BCG Matrix, McKinsey 7S, and Porter’s Five Forces to assess the viability, priority, and resource allocation of multiple engineering projects.\n\n2. Finance & Accounting\n\nCost-benefit analysis for CAPEX projects:\n\nEvaluating the financial return on capital expenditures (CAPEX) by analyzing project costs, expected ROI, payback period, and potential operational cost savings.\n\nROI and financial risk assessments for major investments:\n\nUsing Net Present Value (NPV), Internal Rate of Return (IRR), and Weighted Average Cost of Capital (WACC) to justify capital investments and assess financial risks before committing resources.\n\nDraft\n\n3. Mergers & Acquisitions (M&A)\n\nEvaluating synergy effects in supplier contracts:\n\nAssessing how supplier integration can reduce procurement costs, enhance reliability, and create economies of scale, similar to how large M&A deals seek synergy benefits.\n\nDue diligence mindset in project collaborations:\n\nApplying an M&A-style risk assessment when engaging in large-scale collaborations, ensuring cultural, financial, and operational fit before committing to a new partner or technology.\n\n4. Leadership & Stakeholder Management\n\nEngaging cross-functional teams for project execution:\n\nLeading discussions with finance, operations, and senior management to align engineering projects with broader business objectives, ensuring smooth execution and adoption.\n\nNavigating power-interest dynamics with internal & external stakeholders:\n\nApplying stakeholder mapping and influence strategies to manage different priorities and secure buy-in from leadership, suppliers, and regulatory bodies.\n\nWhy This Matters for My Role\n\n✅ Demonstrates strategic thinking and financial acumen in engineering leadership.\n\n✅ Aligns engineering decisions with corporate growth, risk management, and sustainability.\n\n✅ Strengthens cross-functional collaboration and stakeholder engagement.", "proposal_file": "document-review/proposals-20260624-090104/017-1-strategy-decision-making.md" }, { "source_file": "managers-guide-to-finance-and-accounting.pdf", "source_sha256": "40d2c308f43601d6b7b57b04c2a878e17db0ec4567347a7d6c3e6c766acf141d", "chunk": 1, "page_start": 1, "page_end": 4, "suggested_title": "A Manager’s", "situation": "learning-planning", "keywords": [ "financial", "finance", "accounting", "can", "manager", "organization", "company", "understanding" ], "key_lines": [ "As a manager, every decision you make has financial implications. An intuitive", "understanding of finance and accounting can take you from simply performing your job", "3 Finance vs. Accounting: duties to understanding the greater impact your actions have on your organization’s", "financial health. It can benefit you no matter your industry, whether it’s:", "\u0001Engineering: Engineering is a project-based field, in which attention to" ], "closest_card": "cards/28-new-manager-90-day-blueprint.md", "similarity": 0.043165903984433276, "decision": "new-card-candidate", "text": "A Manager’s\n\nGuide to Finance\n\n& Accounting\n\nContents\n\nAs a manager, every decision you make has financial implications. An intuitive\n\nunderstanding of finance and accounting can take you from simply performing your job\n\n3 Finance vs. Accounting: duties to understanding the greater impact your actions have on your organization’s\n\nfinancial health. It can benefit you no matter your industry, whether it’s:\n\nWhat’s the Difference?\n\n\u0001Engineering: Engineering is a project-based field, in which attention to\n\n6 Financial Skills All Managers detail is highly valued. Understanding the costs and benefits of each\n\ncomponent of a project can make you a more effective manager.\n\nShould Have\n\nFinancial Statement Analysis .............7 \u0001Marketing: Whether you’re projecting future traffic flow to your company’s\n\nwebsite or tracking the number of new customers driven by your latest\n\nFinancial Fluency .............................21\n\nblog post, you’re using financial skills and concepts to excel as a marketer.\n\nROI Calculation ...............................23\n\n\u0001Sales: As a sales manager, knowing how to read a financial statement and\n\nBudgeting ........................................26\n\nuse financial terminology can help you understand the rationale behind\n\nFinancial Performance your company’s goals.\n\nMeasurement ..................................28\n\n\u0001Human Resources: If you’re an HR manager, a familiarity with finance and\n\n31 Taking the Next Step in Your accounting can enable you to facilitate meaningful cross-departmental\n\nconversations and advocate for your budget to hire or train employees.\n\nFinancial Education\n\n\u0001Healthcare: A foundational knowledge of financial principles and\n\nconcepts can inform decisions to purchase emerging technologies or\n\nfund new research that equips your organization to better support its\n\npatients.\n\nThese are just a handful of ways financial literacy can pay off in your profession.\n\nThroughout this guide, you’ll expand your knowledge of finance and accounting\n\nby learning about the differences between the two disciplines, the financial skills\n\nall managers need, and how taking an online course can help you achieve your\n\neducational goals and accelerate your career.\n\nFinance vs. Accounting:\n\nWhat’s the Difference?\n\nFinance and accounting are terms often used interchangeably. While both are related\n\nto the administration and management of an organization’s assets, each has a different\n\nscope and focus. When it comes to evaluating the financial health of your company or\n\ndepartment and making strategic financial decisions, it’s important to have a working\n\nknowledge of both disciplines.\n\nHere’s a look at the key differences between finance and accounting.\n\n1. The Scope and Focus The accounting equation must always balance—the assets\n\non the left should equal the claims against those assets on\n\nthe other side. It’s a fundamental means for determining\n\nFinance and accounting operate on different levels of the\n\nwhether a company’s financial records accurately reflect the\n\nasset management spectrum. Whereas accounting provides\n\ntransactions carried out over a period.\n\na snapshot of an organization’s financial situation using past\n\nand present transactional data, finance is inherently forward- When assessing performance through the lens of finance,\n\nlooking—all value comes from the future. cash is king. Unlike accounting’s reliance on transactional\n\ndata, finance looks at how effectively an organization\n\nIn accounting, insight into a firm’s financial situation is\n\ngenerates and uses cash through the use of several\n\ngained through what’s known as the accounting equation,\n\nmeasurements.\n\nwhich is typically displayed as:", "proposal_file": "document-review/proposals-20260624-090104/018-a-manager-s.md" }, { "source_file": "managers-guide-to-finance-and-accounting.pdf", "source_sha256": "40d2c308f43601d6b7b57b04c2a878e17db0ec4567347a7d6c3e6c766acf141d", "chunk": 2, "page_start": 4, "page_end": 7, "suggested_title": "Free cash flow is arguably the most important one, which", "situation": "learning-planning", "keywords": [ "company", "financial", "value", "finance", "which", "cash", "can", "accounting" ], "key_lines": [ "Free cash flow is arguably the most important one, which", "examines how much money a company has to distribute to", "ASSETS = LIABILITIES + OWNERS’ EQUITY", "investors, or reinvest, after all expenses have been covered.", "It’s a strong indicator of profitability and can be used to make" ], "closest_card": "cards/06-smart-leaders-say-no.md", "similarity": 0.06976320696247638, "decision": "new-card-candidate", "text": "Free cash flow is arguably the most important one, which\n\nexamines how much money a company has to distribute to\n\nASSETS = LIABILITIES + OWNERS’ EQUITY\n\ninvestors, or reinvest, after all expenses have been covered.\n\nIt’s a strong indicator of profitability and can be used to make\n\npresent-day investment decisions based on an expectation of\n\nThe equation consists of three components:\n\nfuture payoff.\n\n• Assets: Anything a company owns with quantifiable value\n\n• Liabilities: Money a company owes to a debtor, such as\n\noutstanding payroll expenses, debt payments, rent and\n\nutilities, bonds payable, and taxes\n\n• Owners’ equity: The net worth of a company, or the\n\namount that would be left if all assets were sold and all\n\nliabilities paid; this money belongs to shareholders, who\n\nmay be private owners or public investors\n\nFinance vs. Accounting: What’s the Difference? 4\n\n2. How You Measure Financial 3. How You Assess Value\n\nPerformance\n\nAnother difference between the disciplines is their approach\n\nto value. In accounting, a conservatism principle is often\n\nThis difference in scope underscores a contrast between the\n\napplied, which suggests that companies should record\n\nunderlying principles of accounting and finance.\n\nlower projected values of their assets and higher estimates\n\nThe accrual method of accounting, followed by most of their liabilities. Under this doctrine, if you don’t know the\n\norganizations, records transactions as they’re agreed value of something precisely, you count it as zero. Doing\n\nupon, as opposed to when they’re completed. It allows for so helps businesses avoid overextending themselves by\n\ntransactions to be made with credit or deferred payments underestimating the value of assets and overestimating the\n\nand operates under the idea that revenues and costs will liabilities they owe.\n\nsmooth out over time to more accurately depict economic\n\nThis is handled much differently in finance, which employs\n\nreality. This makes it possible to compare year-over-year\n\nan analytical process, known as valuation, to determine\n\ngrowth of a company’s revenues, costs, and profits without\n\nthe worth of a company, project, or asset. The gold\n\nfactoring in one-off events or seasonal and cyclical changes.\n\nstandard is discounting, which is applied to a series of cash\n\nFinance rejects that idea, believing that the best way flows over a period of time. The discount rate, represented as\n\nto measure economic returns is to calculate the cash a a percentage, accounts for opportunity cost, inflation, and\n\ncompany can produce and leverage, which depends on when risk, and brings the value of a future stream of cash to its\n\nthat cash is exchanged—rather than just agreed upon. present value.\n\nBoth finance and accounting are useful for assessing a company’s position and performance. By understanding the\n\nunderlying principles of each discipline and how they contrast, you can develop greater financial intuition and make\n\nbetter business decisions.\n\nNext, you’ll learn about the essential financial skills every manager should have.\n\nFinance vs. Accounting: What’s the Difference? 5\n\nFinancial Skills\n\nAll Managers\n\nShould Have\n\nA practical knowledge of finance and accounting is an indispensable part of any\n\nmanager’s toolkit. With well-developed financial skills, you can understand how\n\nyour actions impact your organization and advocate for yourself and your team\n\nwhen weighing in on company-wide financial decisions.\n\nHere are five financial skills you need to be a better manager and\n\ndecision-maker.\n\nSKILL 1: FINANCIAL STATEMENT ANALYSIS\n\nFinancial statements offer a window into the health of a company, which can be difficult to gauge by other means. While", "proposal_file": "document-review/proposals-20260624-090104/019-free-cash-flow-is-arguably-the-most-important-one-which.md" }, { "source_file": "managers-guide-to-finance-and-accounting.pdf", "source_sha256": "40d2c308f43601d6b7b57b04c2a878e17db0ec4567347a7d6c3e6c766acf141d", "chunk": 3, "page_start": 7, "page_end": 8, "suggested_title": "The Balance Sheet When a balance sheet is reviewed internally, it’s designed to", "situation": "learning-planning", "keywords": [ "balance", "sheet", "assets", "company", "equity", "liabilities", "owners", "information" ], "key_lines": [ "accountants and finance specialists are trained to read and understand these documents, many business professionals are not.", "The effect is an obfuscation of critical information.", "To understand a company’s financial position, you need to review and analyze several financial statements: balance sheets,", "income statements, cash flow statements, and annual reports.", "The Balance Sheet When a balance sheet is reviewed internally, it’s designed to" ], "closest_card": "cards/47-decision-heuristics-cheat-sheet.md", "similarity": 0.06022918650516654, "decision": "new-card-candidate", "text": "accountants and finance specialists are trained to read and understand these documents, many business professionals are not.\n\nThe effect is an obfuscation of critical information.\n\nTo understand a company’s financial position, you need to review and analyze several financial statements: balance sheets,\n\nincome statements, cash flow statements, and annual reports.\n\nThe Balance Sheet When a balance sheet is reviewed internally, it’s designed to\n\ngive insight into whether a company is succeeding or failing.\n\nBased on this information, policies and approaches can be\n\nA balance sheet is a financial document designed to\n\nshifted: doubling down on successes, correcting failures, and\n\ncommunicate exactly how much a company or organization is\n\npivoting toward new opportunities.\n\nworth—its “book value.” It achieves this by listing and tallying\n\nall of a company’s assets, liabilities, and owners’ equity as of a When a balance sheet is reviewed externally, it’s designed\n\nparticular reporting date. to give insight into the resources available to a business and\n\nhow they were financed. Based on this information, potential\n\nTypically, a balance sheet is prepared and distributed on a\n\ninvestors can decide whether it would be wise to invest.\n\nquarterly or monthly basis, depending on the frequency of\n\nExternal auditors might also use a balance sheet to ensure a\n\nreporting as determined by law or company policy.\n\ncompany is complying with any reporting laws it’s subject to.\n\nThe Purpose of a Balance Sheet It’s important to remember that a balance sheet communicates\n\ninformation as of a specific date. By its very nature, a balance\n\nBalance sheets serve two very different purposes, depending\n\nsheet is always based on past data. While investors and\n\non the audience reviewing them.\n\nstakeholders may use a balance sheet to predict future\n\nperformance, past performance is no guarantee of future\n\nresults.\n\nFinancial Skills All Managers Should Have 7\n\nThe Contents of a Balance Sheet\n\nThe information in a balance sheet is most often organized Assets\n\naccording to the accounting equation: Assets = Liabilities +\n\nAn asset is anything owned by a company that holds\n\nOwners’ Equity.\n\ninherent, quantifiable value. A business could, if necessary,\n\nWhile this equation is the most common formula for balance convert an asset into cash through a process known as\n\nsheets, it isn’t the only way of organizing the information. liquidation. Assets are typically tallied as positives (+) in a\n\nHere are other equations you may encounter: balance sheet and broken down into two further categories:\n\ncurrent assets and non-current assets.\n\nOWNERS’ EQUITY = ASSETS - LIABILITIES Current assets typically include anything a company expects\n\nit will convert into cash within a year, such as:\n\nLIABILITIES = ASSETS - OWNERS’ EQUITY\n\n• Cash and cash equivalents • Marketable securities\n\nA balance sheet should always balance. Assets must always • Prepaid expenses • Accounts receivable\n\nequal liabilities plus owners’ equity. Owners’ equity must\n\n• Inventory\n\nalways equal assets minus liabilities. Liabilities must always\n\nequal assets minus owners’ equity. Non-current assets typically include long-term investments that\n\naren’t expected to convert into cash in the short term, such as:\n\nIf a balance sheet doesn’t balance, it’s likely the document\n\nwas prepared incorrectly. Errors are usually due to • Land • Goodwill\n\nincomplete or missing data, incorrectly entered transactions,\n\n• Patents • Intellectual property\n\nerroneous currency exchange rates or inventory levels,\n\nmiscalculations of equity, or miscalculated depreciation or • Trademarks • Equipment used to produce\n\namortization. goods or perform services", "proposal_file": "document-review/proposals-20260624-090104/020-the-balance-sheet-when-a-balance-sheet-is-reviewed-internall.md" }, { "source_file": "managers-guide-to-finance-and-accounting.pdf", "source_sha256": "40d2c308f43601d6b7b57b04c2a878e17db0ec4567347a7d6c3e6c766acf141d", "chunk": 4, "page_start": 8, "page_end": 10, "suggested_title": "• Brands", "situation": "learning-planning", "keywords": [ "liabilities", "assets", "june", "company", "non-current", "equity", "balance", "owners" ], "key_lines": [ "Here’s a more detailed breakdown of the items that fall under", "Because companies invest in assets to fulfill their mission,", "the components of a balance sheet: assets, liabilities, and", "you must develop an intuitive understanding of what they are.", "Without this knowledge, it can be challenging to understand" ], "closest_card": "cards/19-salary-negotiation-and-pay-transparency.md", "similarity": 0.030191824266381666, "decision": "new-card-candidate", "text": "• Brands\n\nHere’s a more detailed breakdown of the items that fall under\n\nBecause companies invest in assets to fulfill their mission,\n\nthe components of a balance sheet: assets, liabilities, and\n\nyou must develop an intuitive understanding of what they are.\n\nowners’ equity.\n\nWithout this knowledge, it can be challenging to understand\n\nthe balance sheet and other financial documents that speak\n\nto a company’s health.\n\nFinancial Skills All Managers Should Have 8\n\nLiabilities Owners’ Equity\n\nA liability is the opposite of an asset. While an asset is Owners’ equity, also known as shareholders’ equity,\n\nsomething a company owns, a liability is something it owes. typically refers to anything that belongs to the owners of a\n\nLiabilities are financial and legal obligations to pay an amount business after liabilities are accounted for.\n\nof money to a debtor, which is why they’re typically tallied as\n\nIf you were to add up all the resources a business owns (the\n\nnegatives (-) in a balance sheet.\n\nassets) and subtract all of the claims from third parties (the\n\nJust as assets are categorized as current or non-current, liabilities), the residual left over is the owners’ equity.\n\nliabilities are classified the same way.\n\nOwners’ equity typically includes two elements. The first is\n\nCurrent liabilities typically refer to any liability due to the money, which is contributed to the business in the form of\n\ndebtor within one year, which may include: an investment in exchange for some degree of ownership—\n\ntypically represented by shares. The second is earnings that\n\n• Payroll expenses • Debt financing\n\nthe company generates over time and retains.\n\n• Rent payments • Accounts payable\n\n• Utility payments • Other accrued expenses\n\nNon-current liabilities typically refer to any long-term\n\nobligations or debts that will not be due within one year,\n\nwhich might include:\n\n• Provisions for pensions\n\n• Leases\n\n• Deferred tax liabilities\n\n• Loans\n\n• Bonds payable\n\nLiabilities may also include an obligation to provide goods or\n\nservices in the future.\n\nFinancial Skills All Managers Should Have 9\n\nCompany A\n\nAs of June 30, 2019 and June 30, 2020 (In US$ thousands)\n\nAssets\n\nBUSINESS INSIGHT\n\nNON-CURRENT ASSETS JUNE 30, 2020 JUNE 30, 2019\n\nBRANDS $ 255 $ 302\n\nA Balance Sheet Example\n\nCUSTOMER RELATIONS 71 84\n\nLEASEHOLD RIGHTS 537 585\n\nBy looking at this balance sheet, you can CAPITALIZED EXPENDITURES 631 -\n\nextract vital information about the health GOODWILL 64 64\n\nof the company being reported on. BUILDINGS AND LAND 805 804\n\nEQUIPMENT, TOOLS, FIXTURES AND FITTINGS 18,326 16,589\n\nLONG-TERM RECEIVABLES 628 608\n\nThis balance sheet tells you:\n\nDEFERRED TAX RECEIVABLES 1,624 1,234\n\nTOTAL NON-CURRENT ASSETS 22,941 20,270\n\n1 The reporting period ends on June\n\n30, 2020, and compares against\n\nCURRENT ASSETS JUNE 30, 2020 JUNE 30, 2019\n\na similar reporting period from the INVENTORY 15,213 13,819\n\nprior year. ACCOUNTS RECEIVABLE 2,207 2,337\n\nTAX RECEIVABLE 477 -\n\n2 The company’s assets total OTHER RECEIVABLES 1,056 1,375\n\n$60,173, including $37,232 in PREPAID EXPENSES 1,136 1,110\n\nSHORT-TERM INVESTMENTS 2,995 6,958\n\ncurrent assets and $22,941 in\n\nCASH AND CASH EQUIVALENTS 14,148 14,319\n\nnon-current assets.\n\nTOTAL ASSETS $ 60,173 60,188\n\n3 The company’s liabilities total\n\nLiabilities and Shareholders’ Equity\n\n$16,338, including $14,010 in\n\ncurrent liabilities and $2,328 in NON-CURRENT LIABILITIES JUNE 30, 2019 JUNE 30, 2019\n\nPROVISIONS FOR PENSIONS $ 377 $ 377\n\nnon-current liabilities.\n\nDEFERRED TAX LIABILITIES 1,951 950\n\n4 The company retained $45,528 in TOTAL NON-CURRENT LIABILITIES 2,328 1,327\n\nearnings during the reporting period,\n\nCURRENT LIABILITIES JUNE 30, 2020 JUNE 30, 2019", "proposal_file": "document-review/proposals-20260624-090104/021-brands.md" }, { "source_file": "managers-guide-to-finance-and-accounting.pdf", "source_sha256": "40d2c308f43601d6b7b57b04c2a878e17db0ec4567347a7d6c3e6c766acf141d", "chunk": 5, "page_start": 10, "page_end": 12, "suggested_title": "slightly more than the same period a ACCOUNTS PAYABLE 4,234 4,307", "situation": "learning-planning", "keywords": [ "income", "statement", "business", "financial", "expenses", "period", "revenue", "total" ], "key_lines": [ "slightly more than the same period a ACCOUNTS PAYABLE 4,234 4,307", "year prior. TAX LIABILITIES - 1,851", "ACCRUED EXPENSES AND OTHER DEFERRED REVENUE 7,011 6,171", "TOTAL LIABILITIES $ 16,338 $ 16,084", "SHAREHOLDERS’ EQUITY JUNE 30, 2020 JUNE 30, 2019" ], "closest_card": "cards/41-strategic-influence-perception.md", "similarity": 0.07726832945548975, "decision": "new-card-candidate", "text": "slightly more than the same period a ACCOUNTS PAYABLE 4,234 4,307\n\nyear prior. TAX LIABILITIES - 1,851\n\nOTHER LIABILITIES 2,765 2,428\n\nACCRUED EXPENSES AND OTHER DEFERRED REVENUE 7,011 6,171\n\nTOTAL LIABILITIES $ 16,338 $ 16,084\n\nSHAREHOLDERS’ EQUITY JUNE 30, 2020 JUNE 30, 2019\n\nSHARE CAPITAL $207 $207\n\nRESERVES (1,900) (487)\n\nRETAINED EARNINGS 45,528 44,384\n\nFinancial Skills All Managers Should Have TOTAL SHAREHOLDERS’ EQUITY 43,835 10 44,104\n\nTOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 60,173 $ 60,188\n\nThe Income Statement Accountants, investors, and business owners regularly review\n\nincome statements to understand how well a business is\n\ndoing in relation to its expected performance and use that\n\nAn income statement, also known as a profit and loss (P&L)\n\nknowledge to adjust their actions. A business owner whose\n\nstatement, summarizes the cumulative impact of revenue,\n\ncompany misses targets might, for example, pivot strategy\n\ngain, expense, and loss transactions for a given period. The\n\nto improve in the next quarter. Similarly, an investor might\n\ndocument is often shared as part of quarterly and annual\n\ndecide to sell an investment to buy into a company that’s\n\nreports, and shows financial trends, business activities\n\nmeeting or exceeding its goals.\n\n(revenue and expenses), and comparisons over set periods.\n\nThe Contents of an Income Statement\n\nThe Purpose of an Income Statement\n\nWhile all financial data helps paint a picture of a company’s\n\nAn income statement tells the financial story of a business’s\n\nfinancial health, an income statement is one of the most\n\nactivities. Within an income statement, you’ll find all revenue\n\nimportant documents a company’s management team and\n\nand expense accounts for a set period. Accountants create\n\nindividual investors can review because it includes a detailed\n\nincome statements using trial balances from any two points\n\nbreakdown of income and expenses over the course of a\n\nin time.\n\nreporting period. This includes:\n\nFrom an income statement and other financial documents,\n\n• Revenue: The amount of money a business takes in\n\nyou can determine:\n\nduring a reporting period\n\n• Whether the business is generating a profit\n\n• Expenses: The amount of money a business spends\n\n• If it’s spending more than it earns during a reporting period\n\n• When costs are highest and lowest • Costs of goods sold (COGS): The cost of\n\ncomponent parts of what it takes to make whatever it is a\n\n• How much it’s paying to produce its product\n\nbusiness sells\n\n• If it has the cash to invest back into the business\n\n• Gross profit: Total revenue less COGS\n\n• Operating income: Gross profit less operating expenses\n\n• Income before taxes: Operating income less non-\n\noperating expenses\n\nFinancial Skills All Managers Should Have 11\n\n• Net income: Income before taxes less taxes In short, it’s the process of reading down a single column of\n\ndata in a financial statement and determining how individual\n\n• Earnings per share (EPS): Division of net income by the\n\nline items relate to each other (e.g., showing the relative\n\ntotal number of outstanding shares\n\nsize of different expenses, as line items may be listed as a\n\n• Depreciation: The extent to which assets (for example, percentage of operating expenses).\n\naging equipment) have lost value over time\n\nThis type of analysis makes it simple to compare financial\n\n• Earnings before interest, taxes, depreciation, and\n\nstatements across periods and industries, and between\n\namortization (EBITDA): A measure of a company’s\n\ncompanies, because you can see relative proportions. It\n\nability to generate cash flow that’s calculated by adding\n\nalso helps you analyze whether performance metrics are", "proposal_file": "document-review/proposals-20260624-090104/022-slightly-more-than-the-same-period-a-accounts-payable-4-234-.md" }, { "source_file": "managers-guide-to-finance-and-accounting.pdf", "source_sha256": "40d2c308f43601d6b7b57b04c2a878e17db0ec4567347a7d6c3e6c766acf141d", "chunk": 6, "page_start": 12, "page_end": 14, "suggested_title": "net profit, interest, taxes, depreciation, and amortization", "situation": "learning-planning", "keywords": [ "analysis", "financial", "line", "horizontal", "company", "income", "accounting", "vertical" ], "key_lines": [ "net profit, interest, taxes, depreciation, and amortization", "Vertical analysis isn’t always as immediately useful as", "These categories may be further divided into individual line", "horizontal analysis, but it can help you determine what", "items, depending on a company’s policy and the granularity" ], "closest_card": "cards/23-leadership-hard-truths.md", "similarity": 0.053842310470703515, "decision": "new-card-candidate", "text": "net profit, interest, taxes, depreciation, and amortization\n\nimproving.\n\ntogether\n\nVertical analysis isn’t always as immediately useful as\n\nThese categories may be further divided into individual line\n\nhorizontal analysis, but it can help you determine what\n\nitems, depending on a company’s policy and the granularity\n\nquestions should be asked, such as: Where did costs rise or\n\nof its income statement. For example, revenue is often split\n\nfall? What line items are contributing most to profit margins?\n\nout by product line or company division, while expenses may\n\nHow are they affected over time?\n\nbe broken down into procurement costs, wages, rent, and\n\ninterest paid on debt.\n\nIncome Statement Analysis\n\nThere are two methods commonly used to read and analyze\n\nan organization’s financial documents: vertical analysis and\n\nhorizontal analysis.\n\nVertical Analysis\n\nVertical analysis refers to the method of financial analysis\n\nwhere each line item is listed as a percentage of a base\n\nfigure within the statement. This means line items on income\n\nstatements are stated in percentages of gross sales instead of\n\nin exact amounts of money, such as dollars.\n\nFinancial Skills All Managers Should Have 12\n\nHorizontal Analysis\n\nWhereas vertical analysis focuses on each\n\nline item as a percentage of a base figure BUSINESS INSIGHT:\n\nwithin a current period, horizontal analysis\n\nAccounting Standards: GAAP vs. IFRS\n\ncompares changes in the dollar amounts\n\nin a company’s financial statements over Accounting standards are critical to ensuring a\n\nmultiple reporting periods. It’s frequently company’s financial information and statements are\n\nused in absolute comparisons but can be accurate and comparable to data reported by other\n\nused as percentages, too. organizations.\n\nHorizontal analysis makes financial data The two main sets of accounting standards followed\n\nand reporting consistent per generally by businesses are GAAP and IFRS.\n\naccepted accounting principles (GAAP).\n\n• GAAP, also referred to as US GAAP, is an\n\nIt improves the review of a company’s\n\nacronym for Generally Accepted Accounting\n\nconsistency over time, as well as its growth\n\nPrinciples. This set of guidelines is set by the\n\ncompared to competitors.\n\nFinancial Accounting Standards Board (FASB)\n\nBecause of this, horizontal analysis is and adhered to by most US companies.\n\nimportant to investors and analysts. By\n\n• IFRS stands for International Financial\n\nconducting a horizontal analysis, you can\n\nReporting Standards. These principles are\n\ntell what’s been driving an organization’s\n\ndictated by the International Accounting\n\nfinancial performance over the years and Standards Board (IASB) and followed in many\n\nspot trends and growth patterns, line item countries outside the US.\n\nby line item. Ultimately, horizontal analysis\n\nDeciding which set of standards to use depends\n\nis used to identify trends over time—\n\non whether your company operates in the US or\n\ncomparisons from Q1 to Q2, for example—\n\ninternationally. Work is being done to converge GAAP\n\ninstead of revealing how individual line\n\nand IFRS, but the process has been slow going.\n\nitems relate to others.\n\nFinancial Skills All Managers Should Have 13\n\nThe Case for Both\n\nThe question isn’t whether you should leverage vertical or horizontal analysis when evaluating income statements but rather:\n\nHow can you best leverage both forms of analysis to make better decisions? Utilizing both techniques can provide you with more\n\ninsights than relying solely on one.\n\nBUSINESS INSIGHT: Company B\n\nIncome Statement\n\nAn Income Statement Example\n\nFor Year Ended September 28, 2019 (In Thousands)\n\nHere’s an example of an income statement for the year that GROSS PROFIT AMOUNT", "proposal_file": "document-review/proposals-20260624-090104/023-net-profit-interest-taxes-depreciation-and-amortization.md" }, { "source_file": "managers-guide-to-finance-and-accounting.pdf", "source_sha256": "40d2c308f43601d6b7b57b04c2a878e17db0ec4567347a7d6c3e6c766acf141d", "chunk": 7, "page_start": 14, "page_end": 16, "suggested_title": "ended on September 28, 2019. NET SALES $ 4,358,100", "situation": "learning-planning", "keywords": [ "cash", "flow", "income", "operating", "expenses", "profit", "activities", "statement" ], "key_lines": [ "ended on September 28, 2019. NET SALES $ 4,358,100", "OPERATING INCOME AND EXPENSES AMOUNT", "1 The company brought in a total of $4.36 billion", "SELLING AND OPERATING EXPENSES $ 560,430", "through sales, and it cost approximately $2.74 billion" ], "closest_card": "cards/05-strategy-workflow-os.md", "similarity": 0.06160558950692526, "decision": "new-card-candidate", "text": "ended on September 28, 2019. NET SALES $ 4,358,100\n\nCOST OF SALES 2,738,714\n\nGROSS PROFIT 1,619,386\n\nThis income statement tells you:\n\nOPERATING INCOME AND EXPENSES AMOUNT\n\n1 The company brought in a total of $4.36 billion\n\nSELLING AND OPERATING EXPENSES $ 560,430\n\nthrough sales, and it cost approximately $2.74 billion\n\nGENERAL AND ADMINISTRATIVE EXPENSES 293,729\n\nto achieve those sales, for a gross profit of $1.62 billion.\n\nTOTAL OPERATING EXPENSES 854,159\n\n2 A total of $560.43 million in selling and operating OPERATING INCOME 765,227\n\nexpenses and $293.73 million in general and\n\nOTHER INCOME AND EXPENSES AMOUNT\n\nadministrative expenses, were subtracted from that\n\nOTHER INCOME $ 960\n\nprofit, leaving an operating income of $765.23 million.\n\nGAIN (LOSS) ON FINANCIAL INSTRUMENTS 5,513\n\n3 Additional gains were added to the operating income (LOSS) GAIN ON FOREIGN CURRENCY (12,649)\n\nand losses were subtracted, including $257.64 million INTEREST EXPENSE (18,177)\n\nin income tax. INCOME BEFORE TAXES 740,874\n\n4 By the end of the year, the company saw a net income OTHER INCOME AND EXPENSES AMOUNT\n\nof $483.23 million. INCOME TAX EXPENSE 257,642\n\nNET INCOME $ 483,232\n\nFinancial Skills All Managers Should Have 14\n\nThe Cash Flow Statement\n\nBUSINESS INSIGHT:\n\nA cash flow statement provides a detailed picture of what\n\nhappened to a business’s cash during a specified duration Cash Flow vs. Profit\n\nof time, known as an accounting period. It demonstrates an\n\nThe key difference between cash flow\n\norganization’s ability to operate in the short and long term,\n\nand profit is that, while profit indicates\n\nbased on how much cash is flowing into and out of it.\n\nthe amount of money left over after all\n\nexpenses have been paid, cash flow\n\nThe Purpose of a Cash Flow Statement\n\nindicates the net flow of cash into and\n\nout of a business.\n\nBy reading a cash flow statement, you can see how much\n\ncash different types of activities generate, then make\n\nProfit and cash flow are important in\n\nbusiness decisions based on that analysis.\n\ntheir own ways. As a manager, you need\n\nto understand both metrics and how\n\nIt’s important to note that cash flow is different from profit,\n\nthey interact if you want to evaluate the\n\nwhich is why a cash flow statement is often interpreted with\n\nfinancial health of a business.\n\nother financial documents.\n\nFor example, it’s possible for a company\n\nto be profitable and have a negative\n\ncash flow hindering its ability to pay its\n\nexpenses, expand, and grow. Similarly,\n\na company with positive cash flow and\n\nincreasing sales can fail to make a profit,\n\nas is the case with many startups and\n\nscaling businesses.\n\nFinancial Skills All Managers Should Have 15\n\nThe Contents of a Cash Flow Statement Direct Method\n\nCash flow statements are broken into three sections: cash The first method used to calculate the operation section is\n\nflow from operating activities, cash flow from investing called the direct method, which is based on the transactional\n\nactivities, and cash flow from financing activities. information that impacted cash during the period.\n\n• Operating activities detail cash flow that’s generated To calculate the operation section using the direct method,\n\nonce the company delivers its regular goods or services take all cash collections from operating activities and subtract\n\nand includes both revenue and expenses. all of the cash disbursements from the operating activities.\n\n• Investing activities comprise of cash flow from Indirect Method\n\npurchasing or selling assets using free cash, not debt;\n\nThe second way to prepare the operating section is the\n\nthis is usually in the form of physical property, such as\n\nindirect method. This method depends on the accrual", "proposal_file": "document-review/proposals-20260624-090104/024-ended-on-september-28-2019-net-sales-4-358-100.md" }, { "source_file": "managers-guide-to-finance-and-accounting.pdf", "source_sha256": "40d2c308f43601d6b7b57b04c2a878e17db0ec4567347a7d6c3e6c766acf141d", "chunk": 8, "page_start": 16, "page_end": 18, "suggested_title": "real estate or vehicles, and non-physical property, like", "situation": "learning-planning", "keywords": [ "cash", "flow", "income", "company", "statement", "positive", "business", "net" ], "key_lines": [ "real estate or vehicles, and non-physical property, like", "patents accounting method in which the accountant records", "revenues and expenses at times other than when cash was", "Financing activities detail cash flow from both debt and", "paid or received—meaning that these accrual entries and" ], "closest_card": "cards/41-strategic-influence-perception.md", "similarity": 0.03149485235084842, "decision": "new-card-candidate", "text": "real estate or vehicles, and non-physical property, like\n\npatents accounting method in which the accountant records\n\nrevenues and expenses at times other than when cash was\n\n• Financing activities detail cash flow from both debt and\n\npaid or received—meaning that these accrual entries and\n\nequity financing\n\nadjustments cause the cash flow from operating activities to\n\nIdeally, cash from operating income should routinely exceed differ from net income.\n\nnet income. A positive cash flow speaks to a company’s\n\nInstead of organizing transactional data, like the direct\n\nfinancial stability and ability to grow its operations.\n\nmethod, the accountant starts with the net income number\n\nfound in the income statement and makes adjustments to\n\nHow Cash Flow Is Calculated\n\nundo the impact of the accruals made during the period.\n\nNow that you understand what comprises a cash flow\n\nEssentially, the accountant will convert net income to actual\n\nstatement and why it’s important for financial analysis, here\n\ncash flow by de-accruing it through a process of identifying\n\nare two common methods used to calculate and prepare the\n\nany non-cash expenses for the period from the income\n\noperating activities section of cash flow statements.\n\nstatement. The most common and consistent of these are\n\ndepreciation, the reduction in the value of an asset over time,\n\nand amortization, the spreading of payments over multiple\n\nperiods.\n\nFinancial Skills All Managers Should Have 16\n\nHow to Interpret a Cash Flow Statement Types of Cash Flow\n\nCash flow statements can reveal what phase a business is Cash flow is typically depicted as being positive or negative.\n\nin: whether it’s a rapidly growing startup or a mature and Here’s what those designations mean.\n\nprofitable company. It can also reveal whether a company is\n\nPositive Cash Flow\n\ngoing through transition or in a state of decline.\n\nPositive cash flow indicates that a company has more money\n\nAs a manager, you might look at a cash flow statement to\n\nflowing into the business than out of it over a specified period.\n\nunderstand how your particular department is contributing\n\nThis is an ideal situation because having an excess of cash\n\nto your company’s health and wellbeing, and use that insight\n\nallows the company to reinvest in itself and its shareholders,\n\nto adjust your team’s activities. Cash flow might also impact\n\nsettle debt payments, and find new ways to grow the business.\n\ninternal decisions, such as budgeting or whether to hire (or\n\nfire) employees. Positive cash flow does not necessarily translate to profit.\n\nYour business can be profitable without being cash flow-\n\npositive, and you can have positive cash flow without actually\n\nmaking a profit.\n\nNegative Cash Flow\n\nHaving negative cash flow means your cash outflow is\n\nhigher than your cash inflow during a period, but it doesn’t\n\nnecessarily mean profit is lost. Negative cash flow may\n\ninstead be caused by expenditure and income mismatch,\n\nwhich should be addressed as soon as possible.\n\nNegative cash flow may also be caused by your company’s\n\ndecision to expand and invest in future growth, so it’s important\n\nto analyze changes in cash flow from one period to another,\n\nwhich can indicate how the business is performing overall.\n\nFinancial Skills All Managers Should Have 17\n\nCOMPANY C\n\nSTATEMENT OF CASH FLOWS\n\nYear ended March 30, 2020 (In Millions)\n\nBUSINESS INSIGHT\n\nCASH AND CASH EQUIVALENTS BALANCE AT THE BEGINNING OF THE YEAR AMOUNT\n\nCASH AND CASH EQUIVALENTS, BEGINNING OF THE YEAR $ 10,764\n\nA Cash Flow Statement Example\n\nOPERATING ACTIVITIES: AMOUNT\n\nHere’s an example of a cash flow\n\nNET INCOME 37,037\n\nstatement for the year that ended on", "proposal_file": "document-review/proposals-20260624-090104/025-real-estate-or-vehicles-and-non-physical-property-like.md" }, { "source_file": "managers-guide-to-finance-and-accounting.pdf", "source_sha256": "40d2c308f43601d6b7b57b04c2a878e17db0ec4567347a7d6c3e6c766acf141d", "chunk": 9, "page_start": 18, "page_end": 19, "suggested_title": "ADJUSTMENTS TO RECONCILE NET INCOME TO CASH GENERATED BY", "situation": "learning-planning", "keywords": [ "cash", "annual", "company", "year", "financial", "other", "billion", "activities" ], "key_lines": [ "ADJUSTMENTS TO RECONCILE NET INCOME TO CASH GENERATED BY", "March 30, 2020. OPERATING ACTIVITIES:", "DEPRECIATION AND AMORTIZATION 6,757", "This cash flow statement tells you:", "1 The company started the year with CHANGES IN OPERATING ASSETS AND LIABILITIES:" ], "closest_card": "cards/45-public-speaking-skills.md", "similarity": 0.0210870583918325, "decision": "new-card-candidate", "text": "ADJUSTMENTS TO RECONCILE NET INCOME TO CASH GENERATED BY\n\nMarch 30, 2020. OPERATING ACTIVITIES:\n\nDEPRECIATION AND AMORTIZATION 6,757\n\nDEFERRED INCOME TAX EXPENSE 1,141\n\nThis cash flow statement tells you:\n\nOTHER 2,253\n\n1 The company started the year with CHANGES IN OPERATING ASSETS AND LIABILITIES:\n\nACCOUNTS RECEIVABLE, NET (2,172)\n\napproximately $10.75 billion in\n\nINVENTORIES (973)\n\ncash and equivalents.\n\nVENTOR NON-TRADE RECEIVABLES 223\n\nOTHER CURRENT AND NON-CURRENT ASSETS 1,080\n\n2 It brought in $53.66 billion through ACCOUNTS PAYABLE 2,340\n\nits regular operating activities. DEFERRED REVENUE 1,459\n\nOTHER CURRENT AND NON-CURRENT LIABILITIES 4,521\n\n3 It spent approximately $33.77 CASH GENERATED BY OPERATING ACTIVITIES 53,666\n\nbillion in investment activities.\n\nINVESTING ACTIVITIES: AMOUNT\n\n4 In addition to investment activities, PURCHASES OF MARKETABLE SECURITIES (148,489)\n\nit spent a further $16.38 billion in PROCEEDS FROM MATURITIES OF MARKETABLE SECURITIES 20,317\n\nfinancing activities, making for a PROCEEDS FROM SALES OF MARKETABLE SECURITIES 104,130\n\nPAYMENTS MADE IN CONNECTION WITH BUSINESS ACQUISITIONS, (496)\n\ntotal cash outflow of $50.15 billion.\n\nNET OF CASH ACQUIRED\n\nPAYMENTS MADE FOR ACQUISITION OF PROPERTY, PLANT, AND (8,195)\n\n5 The company ended the year with a EQUIPMENT\n\npositive cash flow of $3.51 billion, PAYMENTS FOR ACQUISITION OF INTANGIBLE ASSETS (911)\n\nand total cash of $14.26 billion. OTHER (160)\n\nCASH USED IN INVESTING ACTIVITIES (33,774)\n\nFINANCING ACTIVITIES: AMOUNT\n\nDIVIDENDS AND DIVIDEND EQUIVALENT RIGHTS PAID (10,564)\n\nREPURCHASE OF COMMON STOCK (22,860)\n\nPROCEEDS FROM ISSUANCE OF LONG-TERM DEBT, NET 16,896\n\nOTHER 149\n\nCASH USED IN FINANCING ACTIVITIES (16,379)\n\nCASH AND CASH EQUIVALENTS BALANCE AT THE END OF THE YEAR AMOUNT\n\nFinancial Skills All Managers Should Have 18\n\nINCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 3,513\n\nCASH AND CASH EQUIVALENTS, END OF YEAR $ 14,259\n\nThe Annual Report The Contents of an Annual Report\n\nAn annual report is a publication that public corporations An annual report is often split into two halves. The first section\n\nare required to publish every year by law. It describes a typically includes a narrative of the company’s performance\n\ncompany’s operations and financial conditions so that over the previous year, along with forward-looking statements.\n\ncurrent and potential shareholders can make informed The second section strips the story out and includes financial\n\ninvestment decisions. documents and statements. Here’s a more detailed list of the\n\nitems an annual report contains:\n\nUnlike other financial data, annual reports include editorial\n\nand storytelling, and they’re typically professionally designed • Letters to shareholders: These letters typically include\n\nand used as marketing collateral. Annual reports are sent one from the CEO or president and other key figures, such\n\nto a company’s shareholders before its annual shareholder as the CFO.\n\nmeeting and the election of its board of directors, and they’re\n\n• Management’s discussion and analysis (MD&A): This\n\noften accessible to the public via the company’s website.\n\nis a detailed analysis of the company’s performance, as\n\nconducted by its executives.\n\nThe Purpose of an Annual Report\n\n• Audited financial statements: These are financial\n\nAn annual report can help you learn more about what type of documents that detail the company’s financial performance,\n\ncompany you work for and how it operates, including: such as balance sheets, cash flow statements, income\n\nstatements, and equity statements.\n\n• Whether it’s able to pay debts as they come due\n\n• A summary of financial data: This refers to any notes\n\n• Its profits and/or losses year over year", "proposal_file": "document-review/proposals-20260624-090104/026-adjustments-to-reconcile-net-income-to-cash-generated-by.md" }, { "source_file": "managers-guide-to-finance-and-accounting.pdf", "source_sha256": "40d2c308f43601d6b7b57b04c2a878e17db0ec4567347a7d6c3e6c766acf141d", "chunk": 10, "page_start": 19, "page_end": 21, "suggested_title": "or discussions pertinent to the financial statements listed", "situation": "learning-planning", "keywords": [ "financial", "can", "report", "company", "10-k", "reports", "asset", "interest" ], "key_lines": [ "or discussions pertinent to the financial statements listed", "If and how it’s grown over time above.", "What it requires to maintain or expand its business", "Auditor’s report: This report describes whether the", "company has complied with GAAP in preparing its" ], "closest_card": "cards/41-strategic-influence-perception.md", "similarity": 0.047491221508528345, "decision": "new-card-candidate", "text": "or discussions pertinent to the financial statements listed\n\n• If and how it’s grown over time above.\n\n• What it requires to maintain or expand its business • Auditor’s report: This report describes whether the\n\ncompany has complied with GAAP in preparing its\n\n• Operational expenses compared to generated revenues\n\nfinancial statements.\n\nAll of these insights can help you be privy to conversations\n\n• Accounting policies: This is an overview of the policies the\n\nsurrounding your company’s future.\n\ncompany’s leadership team adhered to when preparing\n\nthe annual report and financial statements.\n\nFinancial Skills All Managers Should Have 19\n\nBUSINESS INSIGHT:\n\nAnnual Report vs. 10-K Report\n\nAnnual reports aren’t the only documents public companies are required to publish yearly. The US Securities\n\nand Exchange Commission (SEC) requires public firms to produce a 10-K report, which informs investors of a\n\nbusiness’s financial status before they buy or sell shares.\n\nWhile there’s similar data in both reports, they are separate.\n\n10-K reports are organized per SEC guidelines and include full descriptions of a company’s fiscal activity, corporate\n\nagreements, risks, opportunities, current operations, executive compensation, and market activity. You can also\n\nfind detailed discussions of operations for the year and a full analysis of the industry and marketplace.\n\nBecause of this, 10-K reports are longer and denser than annual reports and have strict requirements—they must\n\nbe filed with the SEC between 60 to 90 days after the end of a company’s fiscal year.\n\nIf you need to review a 10-K report, you can find it on the SEC website.\n\nReviewing and understanding these financial documents can provide you with valuable insights about your\n\norganization, such as:\n\n• Its debts and ability to repay them\n\n• Profits and losses for a given quarter or year\n\n• Whether profit has increased or decreased compared to similar past accounting periods\n\n• The level of investment required to maintain or grow the business\n\n• Operational expenses, especially compared to the revenue generated from those expenses\n\nThe value of these documents lies in the story they tell when reviewed together.\n\nFinancial Skills All Managers Should Have 20\n\nSKILL 2: FINANCIAL FLUENCY\n\nIf you’re in a non-finance role, the thought of talking data, 2. Capital Gain: A capital gain is an increase in the value of\n\nforecasts, and valuations may seem daunting. Having that an asset or investment above the price you initially paid for it.\n\nfinancial fluency, however, can help you clearly communicate If you sell an asset for less than its original purchase price, it\n\nthe monetary implications of decisions to stakeholders and would be considered a capital loss.\n\nmake a greater impact on your company.\n\n3. Compound Interest: This refers to “interest on interest.”\n\nHere are eight terms and definitions you should know. When you’re investing or saving, compound interest is\n\nearned on the amount you deposited, plus any interest\n\n1. Asset Allocation: Asset allocation refers to how you\n\nyou’ve accumulated. While it can grow your savings, it can\n\nchoose to spread money across different investment types,\n\nalso increase your debt; compound interest is charged on\n\nalso known as asset classes. These include:\n\nthe initial amount you were loaned, as well as the expenses\n\n• Bonds: Bonds represent a form of borrowing. When added to your outstanding balance over time.\n\nyou buy a bond, typically from the government or a\n\n4. Forecasting: Forecasting is the process of using available\n\ncorporation, you’re essentially lending them money. You\n\ndata and assumptions to develop a set of future incomes", "proposal_file": "document-review/proposals-20260624-090104/027-or-discussions-pertinent-to-the-financial-statements-listed.md" }, { "source_file": "managers-guide-to-finance-and-accounting.pdf", "source_sha256": "40d2c308f43601d6b7b57b04c2a878e17db0ec4567347a7d6c3e6c766acf141d", "chunk": 11, "page_start": 21, "page_end": 23, "suggested_title": "receive periodic interest payments and get back the", "situation": "learning-planning", "keywords": [ "can", "roi", "project", "cash", "investment", "financial", "worth", "currency" ], "key_lines": [ "receive periodic interest payments and get back the", "and expenses. You can use forecasting to predict a project’s", "loaned amount at the time of the bond’s maturity—or", "future cash flows, then discount those cash flows to", "the defined term at which the bond can be redeemed." ], "closest_card": "cards/06-smart-leaders-say-no.md", "similarity": 0.03973132404518551, "decision": "new-card-candidate", "text": "receive periodic interest payments and get back the\n\nand expenses. You can use forecasting to predict a project’s\n\nloaned amount at the time of the bond’s maturity—or\n\nfuture cash flows, then discount those cash flows to\n\nthe defined term at which the bond can be redeemed.\n\ndetermine its present value.\n\n• Stocks: A stock is a share of ownership in a public or\n\nprivate company. When you buy stock, you become a 5. Liquidity: Liquidity describes how quickly your assets can\n\nshareholder and can receive dividends—the company’s be converted into cash. Because of that, cash is the most\n\nprofits—if and when they’re distributed. liquid asset. The least liquid assets are items like real estate\n\nor land, which can take weeks or months to sell.\n\n• Cash and Cash Equivalents: This refers to any asset that’s\n\nin the form of cash or can easily be converted into cash\n\nFinancial Skills All Managers Should Have 21\n\n6. Net Worth: Net worth indicates the overall state of your financial health. You can\n\ncalculate net worth by subtracting what you own (your assets) from what you owe\n\n(your liabilities).\n\n7. Time Value of Money: The time value of money is the concept that a unit of\n\ncurrency received today is worth more than the same unit of currency received at a\n\nfuture point. The further into the future, the less the unit of currency is worth. This is\n\nbecause of three factors: the opportunity cost of not having currency to invest, the\n\nimpact of inflation, and the risk of not receiving the unit of currency in the future. “Gaining a core competency\n\nin financial analysis is really\n\n8. Valuation: Valuation is the process of determining the current worth of an\n\nimportant in helping me create an\n\nasset, company, or liability. Regularly repeating the process can help ensure you’re environment where the correct and\n\nprepared if faced with an opportunity to merge or sell your company, and when best decisions get made as we work\n\nseeking funding from outside investors. cross-functionally with Finance and\n\nDevelopment.”\n\nLisa Arpey\n\nLeading with Finance\n\nParticipant\n\nBy mastering these basic finance terms, you can gain a more holistic view\n\nof your business, understand the value of your work, and improve how you\n\ncommunicate financial goals and performance.\n\nFinancial Skills All Managers Should Have 22\n\nSKILL 3: ROI CALCULATION Positive vs. Negative ROI\n\nWhen a project yields a positive return on investment, it\n\nReturn on investment (ROI) is a metric used to denote how can be considered profitable because it produced more in\n\nmuch profit has been generated from an investment that’s revenue than it cost to pursue. If it yields a negative return on\n\nbeen made. investment, it means the project cost more to pursue than it\n\ngenerated in revenue. If the project breaks even, it means the\n\nKnowing how to calculate ROI can benefit you in several ways,\n\ntotal revenue matched the project’s expenses.\n\nincluding helping you make the case for a project, providing\n\ngreater insight into your team’s performance, and making it\n\nThe ROI Formula\n\neasier to identify which efforts should be greenlit.\n\nReturn on investment is typically calculated by taking the\n\nAnticipated vs. Actual ROI actual or estimated income from a project and subtracting\n\nthe actual or estimated costs. That number is the total profit\n\nReturn on investment comes in two primary forms, depending\n\na project has generated, or is expected to generate, divided\n\non when it’s calculated: anticipated ROI and actual ROI.\n\nby the costs.\n\nAnticipated ROI, or expected ROI, is calculated before a\n\nThe formula for ROI is typically written as:\n\nproject kicks off and often used to determine if that project", "proposal_file": "document-review/proposals-20260624-090104/028-receive-periodic-interest-payments-and-get-back-the.md" }, { "source_file": "managers-guide-to-finance-and-accounting.pdf", "source_sha256": "40d2c308f43601d6b7b57b04c2a878e17db0ec4567347a7d6c3e6c766acf141d", "chunk": 12, "page_start": 23, "page_end": 25, "suggested_title": "makes sense to pursue. Anticipated ROI uses estimated", "situation": "learning-planning", "keywords": [ "100", "roi", "profit", "revenues", "project", "would", "net", "000" ], "key_lines": [ "makes sense to pursue. Anticipated ROI uses estimated", "costs, revenues, and other assumptions to determine how ROI = (NET PROFIT / COST OF INVESTMENT) X 100", "much profit a project is likely to generate.", "This figure will often be run through several different scenarios", "In project management, the formula is written similarly but" ], "closest_card": "cards/05-strategy-workflow-os.md", "similarity": 0.027400865884285888, "decision": "new-card-candidate", "text": "makes sense to pursue. Anticipated ROI uses estimated\n\ncosts, revenues, and other assumptions to determine how ROI = (NET PROFIT / COST OF INVESTMENT) X 100\n\nmuch profit a project is likely to generate.\n\nThis figure will often be run through several different scenarios\n\nIn project management, the formula is written similarly but\n\nto determine the range of possible outcomes. These numbers\n\nwith slightly different terms:\n\nare then used to understand risk and, ultimately, decide\n\nwhether an initiative should move forward.\n\nROI = [(FINANCIAL VALUE - PROJECT COST) / PROJECT COST] X 100\n\nActual ROI is the true return on investment generated from a\n\nproject. This number is typically calculated after a project has\n\nconcluded and uses final costs and revenues to determine how\n\nmuch profit was made compared to what was estimated.\n\nFinancial Skills All Managers Should Have 23\n\nCalculating the ROI of a Project: An Example\n\nTEST YOUR KNOWLEDGE\n\nImagine you have the opportunity to purchase 1,000 chocolate bars for $2 apiece.\n\nYou would then sell the chocolate to a grocery store for $3 per piece. In addition to Question\n\npurchasing the chocolate, you need to pay $100 in transportation costs.\n\nRefer to the chocolate bar\n\nTo decide whether this would be profitable, you would tally your total expenses and example in this section. What\n\nyour total expected revenues. would the anticipated ROI\n\nbe if you had the opportunity\n\nEXPECTED REVENUES = 1,000 X $3 = $3,000\n\nto buy 1,500 chocolate bars\n\nfor $3 apiece and decided\n\nTOTAL EXPENSES = (1,000 X $2) + $100 = $2,100\n\nto sell them for $5 each? Be\n\nsure to factor in the $100 in\n\nYou would then subtract the expenses from your expected revenue to determine the\n\ntransportation costs.\n\nnet profit.\n\nOnce you’ve done your\n\nNET PROFIT = $3,000 - $2,100 = $900\n\ncalculations, proceed to the\n\nnext page for the answer.\n\nTo calculate the expected return on investment, you would divide the net profit by\n\nthe cost of the investment, and multiply that number by 100.\n\nROI = ($900 / $2,100) X 100 = 42.9%\n\nBy running this calculation, you can see the project will yield a nearly 43 percent\n\npositive return on investment, so long as factors remain as predicted. Therefore, it’s\n\na sound financial decision. If the endeavor yielded a negative ROI, or an ROI that\n\nwas so low it didn’t justify the amount of work involved, you would know to avoid it.\n\nFinancial Skills All Managers Should Have 24\n\nIt’s important to note that this example calculates an anticipated ROI for your\n\nproject. If any of the factors affecting expenses or revenue were to change during TEST YOUR KNOWLEDGE\n\nimplementation, your actual ROI could be different.\n\nAnswer\n\nFor example, imagine that you’ve already purchased your chocolate bars for the\n\nThe anticipated ROI would\n\nagreed-upon $2 apiece and paid $100 to transport them. If the most that the store\n\nbe 63 percent. Here’s a\n\nwill pay you is $2.25 per chocolate bar, then your actual revenues drop substantially\n\nbreakdown of the calculations:\n\ncompared to your projected revenues. The result is a reduced net profit and a\n\nreduced actual ROI. Expected Revenues =\n\n1,500 x $5 = $7,500\n\nACTUAL REVENUES = 1,000 X $2.25 = $2,250\n\nTotal Expenses =\n\nTOTAL EXPENSES = (1,000 X $2) + $100 = $2,100 (1,500 x $3) + $100 = $4,600\n\nNet Profit =\n\nNET PROFIT = $2,250 - $2,100 = $150\n\n$7,500 - $4,600 = $2,900\n\nROI = ($150 / $2,100) X 100 = 7.1% ROI =\n\n($2,900 / $4,600) x 100 = 63%\n\nCircumstances are rarely as straightforward as this example. There are typically\n\nadditional costs that should be accounted for, such as overhead and taxes. In\n\naddition, there’s always the possibility that an anticipated ROI will not be met due to", "proposal_file": "document-review/proposals-20260624-090104/029-makes-sense-to-pursue-anticipated-roi-uses-estimated.md" }, { "source_file": "managers-guide-to-finance-and-accounting.pdf", "source_sha256": "40d2c308f43601d6b7b57b04c2a878e17db0ec4567347a7d6c3e6c766acf141d", "chunk": 13, "page_start": 25, "page_end": 27, "suggested_title": "Financial Skills All Managers Should Have 25", "situation": "learning-planning", "keywords": [ "can", "financial", "organization", "team", "budgeting", "resources", "goals", "budget" ], "key_lines": [ "unforeseen circumstances, but the same general principles hold true.", "By learning how to calculate ROI for projects you’re interested in pursuing, you can self-evaluate them before they’re", "shared with other decision-makers within your organization and ensure you’re making the best possible use of available", "resources. Similarly, by understanding how to calculate ROI after a project is done, you can speak to the contributions", "that you and your team have made toward shared company goals." ], "closest_card": "cards/12-team-effectiveness-conditions.md", "similarity": 0.10186256448101387, "decision": "new-card-candidate", "text": "unforeseen circumstances, but the same general principles hold true.\n\nBy learning how to calculate ROI for projects you’re interested in pursuing, you can self-evaluate them before they’re\n\nshared with other decision-makers within your organization and ensure you’re making the best possible use of available\n\nresources. Similarly, by understanding how to calculate ROI after a project is done, you can speak to the contributions\n\nthat you and your team have made toward shared company goals.\n\nFinancial Skills All Managers Should Have 25\n\nSKILL 4: BUDGETING 2. Leverage Financial Data\n\nIn addition to connecting with stakeholders, leverage\n\nexisting financial data in your decision-making process. By\n\nOne of the most important finance skills for managers to\n\nanalyzing financial statements, you can gain insight into your\n\nmaster is budgeting, or the process of preparing and overseeing\n\norganization’s financial health and determine how to suitably\n\na financial plan that estimates income and expenses over a\n\napportion resources.\n\ndefined period.\n\n“Business conditions change rapidly, and basing your current\n\nAt its most basic level, a budget ensures a team or department\n\nbudget on historical information can adversely impact budgets\n\nhas the resources needed to achieve its goals. For managers,\n\nwithin other areas of an organization,” writes John Wong, HBS\n\nthe budget serves as a vital tool for:\n\nOnline’s senior associate director of Financial Planning and\n\n• Communicating expectations and goals to stakeholders\n\nAnalysis, in an article for the Business Insights blog.\n\n• Mobilizing teams and departments around organizational\n\n3. Work Toward Goals\n\nobjectives\n\nUnderstanding your organization’s goals is vital to successful\n\n• Assessing group and individual performance\n\nbudgeting. This knowledge can help you develop a clear\n\n• Gaining insight into an organization’s financial health picture of how your team’s work fits into the company’s key\n\nobjectives and advances its overarching mission.\n\n• Allocating resources strategically and appropriately\n\nFor example, your firm may be planning an important\n\nIf you want to reap the benefits of these techniques, here are\n\norganizational change initiative, such as a redesign of its\n\nfive budgeting tips you can employ to become a better manager.\n\nwebsite. As part of this process, your team will be responsible\n\n1. Know Your Organization’s Budgeting Timeline and for writing web copy, creating videos, and designing graphics.\n\nProcedures\n\nWith these requirements in mind, you can break your team’s\n\nFamiliarize yourself with your organization’s budgeting work down into specific deliverables and line items within\n\ndeadlines and procedures at the outset of the process. Your your budget, accounting for all the resources your employees\n\nnumbers may be reliant on financial targets set by your will need to produce the desired results and push the project\n\nsupervisor and other department heads. Knowing when through to completion.\n\nspecific deliverables are due will help ensure you effectively\n\nmanage your time and connect with stakeholders who can\n\ninform your allocation decisions.\n\nFinancial Skills All Managers Should Have 26\n\n4. Evaluate Performance\n\nBy preparing your budget with your organization’s mission in mind and a detailed set\n\nof deliverables, you can develop a roadmap for evaluating performance. Keep track of\n\nexpenses so you can compare your spending against projected costs, and stay in close\n\ncontact with other stakeholders to ensure your team’s timeline for completing work is in\n\nsync with company-wide project plans.\n\n“I use what I learned on a daily basis.", "proposal_file": "document-review/proposals-20260624-090104/030-financial-skills-all-managers-should-have-25.md" }, { "source_file": "managers-guide-to-finance-and-accounting.pdf", "source_sha256": "40d2c308f43601d6b7b57b04c2a878e17db0ec4567347a7d6c3e6c766acf141d", "chunk": 14, "page_start": 27, "page_end": 29, "suggested_title": "The deliverables in your budget can serve as key milestones that inform how you", "situation": "learning-planning", "keywords": [ "profit", "financial", "margin", "can", "net", "profitability", "ratio", "revenue" ], "key_lines": [ "The deliverables in your budget can serve as key milestones that inform how you", "Even though I’m not in a finance role,", "manage your employees’ time and deliver feedback. If a particular task is at risk of not", "being completed or incurring additional costs, be prepared to modify line item amounts", "utilizing the principles we learned" ], "closest_card": "cards/05-strategy-workflow-os.md", "similarity": 0.07475629505021658, "decision": "new-card-candidate", "text": "The deliverables in your budget can serve as key milestones that inform how you\n\nEven though I’m not in a finance role,\n\nmanage your employees’ time and deliver feedback. If a particular task is at risk of not\n\noperating in a general management\n\nbeing completed or incurring additional costs, be prepared to modify line item amounts\n\nposition, I need to make decisions\n\nand delivery dates.\n\nutilizing the principles we learned\n\nMaintain this kind of flexibility throughout the budget management process and daily. The course empowered me to\n\ndo that.”\n\nbe ready to reallocate resources, when needed, to ensure your organization is well-\n\npositioned to achieve its goals.\n\nPaul Accornero\n\n5. Communicate Progress and Results Leading with Finance\n\nParticipant\n\nClear and consistent communication is crucial when overseeing a budget. Establish\n\na regular cadence for meeting with key stakeholders to report your employees’\n\ncontributions and results. Use data visualization techniques to illustrate your team’s\n\nprogress, and make it a point to highlight any accomplishments or shortcomings that\n\ncould have implications that extend beyond your direct reports.\n\nCarve out time to update your employees as well. Keeping them apprised of the impact\n\nof their work can help them feel more engaged and motivated.\n\nBudgeting is an essential management skill that can drive organizational success. With a clear understanding of\n\nyour firm’s processes and goals, a well-developed plan for evaluating performance, and a knowledge of financial\n\nprinciples, you can make more informed decisions and ensure your team meets its targets.\n\nFinancial Skills All Managers Should Have 27\n\nSKILL 5: FINANCIAL\n\nPERFORMANCE\n\nMEASUREMENT\n\nFinancial key performance indicators (KPIs) are metrics 2. Net Profit Margin\n\nused to track, measure, and analyze the financial health of\n\nNet profit margin is a profitability ratio that measures the\n\na company. They fall under a variety of categories, including\n\npercentage of revenue and other income left after subtracting all\n\nprofitability, liquidity, solvency, efficiency, and valuation.\n\ncosts for the business, including costs of goods sold, operating\n\nBy learning financial KPIs, you can understand how your expenses, interest, and taxes. Net profit margin differs from\n\norganization is performing financially. You can then use this gross profit margin as a measure of profitability for the business\n\nknowledge to adjust your department or team’s goals and in general, taking into account not only the cost of goods sold\n\ncontribute to strategic objectives. but all other related expenses.\n\nHere are 12 financial KPIs managers should understand.\n\nNET PROFIT MARGIN = NET PROFIT / REVENUE * 100\n\n1. Gross Profit Margin\n\n3. Working Capital\n\nGross profit margin is a profitability ratio that measures\n\nthe percentage of revenue left after subtracting the cost of\n\nWorking capital is a measure of the business’s available\n\ngoods sold. The cost of goods sold refers to the direct cost\n\noperating liquidity, which can be used to fund day-to-day\n\nof production and does not include operating expenses,\n\noperations.\n\ninterest, or taxes. In other words, gross profit margin is a\n\nmeasure of profitability, specifically for a product or item line,\n\nWORKING CAPITAL =\n\nwithout accounting for overheads.\n\nCURRENT ASSETS - CURRENT LIABILITIES\n\nGROSS PROFIT MARGIN =\n\n(REVENUE - COST OF SALES) / REVENUE * 100\n\nFinancial Skills All Managers Should Have 28\n\n4. Current Ratio 6. Leverage\n\nCurrent ratio is a liquidity ratio that helps you understand Financial leverage, also known as the equity multiplier, refers", "proposal_file": "document-review/proposals-20260624-090104/031-the-deliverables-in-your-budget-can-serve-as-key-milestones-.md" }, { "source_file": "managers-guide-to-finance-and-accounting.pdf", "source_sha256": "40d2c308f43601d6b7b57b04c2a878e17db0ec4567347a7d6c3e6c766acf141d", "chunk": 15, "page_start": 29, "page_end": 31, "suggested_title": "assets and liabilities. increases from one, demonstrating the leverage impact of the", "situation": "learning-planning", "keywords": [ "assets", "ratio", "equity", "total", "company", "inventory", "current", "its" ], "key_lines": [ "whether the business can pay its short-term obligations— to the use of debt to buy assets. If all the assets are financed by", "that is, obligations due within one year—with its current equity, the multiplier is one. As debt increases, the multiplier", "assets and liabilities. increases from one, demonstrating the leverage impact of the", "debt and, ultimately, increasing the business risk.", "CURRENT RATIO = CURRENT ASSETS / CURRENT LIABILITIES" ], "closest_card": "cards/19-salary-negotiation-and-pay-transparency.md", "similarity": 0.04008452753600509, "decision": "new-card-candidate", "text": "whether the business can pay its short-term obligations— to the use of debt to buy assets. If all the assets are financed by\n\nthat is, obligations due within one year—with its current equity, the multiplier is one. As debt increases, the multiplier\n\nassets and liabilities. increases from one, demonstrating the leverage impact of the\n\ndebt and, ultimately, increasing the business risk.\n\nCURRENT RATIO = CURRENT ASSETS / CURRENT LIABILITIES\n\nLEVERAGE = TOTAL ASSETS / TOTAL EQUITY\n\n5. Quick Ratio\n\n7. Debt-to-Equity Ratio\n\nThe quick ratio, also known as an acid test ratio, is another\n\nThe debt-to-equity ratio is a solvency ratio that measures how\n\ntype of liquidity ratio that measures a business’s ability to\n\nmuch a company finances itself using equity versus debt.\n\nhandle short-term obligations. The quick ratio uses only\n\nThis ratio provides insight into the solvency of the business by\n\nhighly liquid current assets in its numerator, such as cash,\n\nreflecting the ability of shareholder equity to cover all debt in\n\nmarketable securities, and accounts receivables. The\n\nthe event of a business downturn.\n\nassumption is that certain current assets, like inventory, are\n\nnot necessarily easy to turn into cash.\n\nDEBT-TO-EQUITY RATIO = TOTAL DEBT / TOTAL EQUITY\n\nQUICK RATIO =\n\n(CURRENT ASSETS - INVENTORY) / CURRENT LIABILITIES\n\n8. Inventory Turnover\n\nInventory turnover is an efficiency ratio that measures how\n\nmany times per accounting period the company sold its\n\nentire inventory. It gives insight into whether a company has\n\nexcessive inventory relative to its sales levels.\n\nINVENTORY TURNOVER = COST OF GOODS SOLD / (BEGINNING\n\nINVENTORY + ENDING INVENTORY / 2)\n\nFinancial Skills All Managers Should Have 29\n\n9. Total Asset Turnover 12. Seasonality\n\nTotal asset turnover is a ratio that measures how efficiently a Seasonality is a measure of how the period of the year is\n\ncompany uses its assets to generate revenue. The higher the affecting your company’s financial numbers and outcomes.\n\nturnover ratio, the better the company’s performance. If you’re in an industry affected by high and low seasons, this\n\nmeasure will help you sort out confounding variables and see\n\nthe numbers for what they truly are.\n\nTOTAL ASSET TURNOVER = REVENUE /\n\n(BEGINNING TOTAL ASSETS + ENDING TOTAL ASSETS / 2) It’s important to note there’s no absolute good or bad when\n\nit comes to financial KPIs. Metrics need to be compared\n\nto prior years or industry competitors to see whether your\n\n10. Return on Equity\n\ncompany’s financial performance is improving or declining,\n\nReturn on equity, more commonly displayed as ROE, is and how it’s performing relative to others.\n\na profitability ratio measured by dividing net profit over\n\nshareholders’ equity. It indicates how well the business can\n\nutilize equity investments to earn profit for investors.\n\nROE = NET PROFIT / (BEGINNING EQUITY + ENDING EQUITY) / 2\n\nNow that you know the financial skills you need to\n\nsucceed as a manager, the question becomes: How\n\n11. Return on Assets do you acquire and develop those skills?\n\nReturn on assets, or ROA, is another profitability ratio similar In the next section, you’ll learn how taking an online\n\nto ROE. It’s measured by dividing net profit by the company’s course could help you achieve your educational and\n\naverage assets. It’s an indicator of how well the company is professional goals.\n\nmanaging its available resources and assets to net higher profits.\n\nROA = NET PROFIT / (BEGINNING TOTAL ASSETS\n\n+ ENDING TOTAL ASSETS) / 2\n\nFinancial Skills All Managers Should Have 30\n\nTaking the Next Step in Your Financial Education", "proposal_file": "document-review/proposals-20260624-090104/032-assets-and-liabilities-increases-from-one-demonstrating-the-.md" }, { "source_file": "managers-guide-to-finance-and-accounting.pdf", "source_sha256": "40d2c308f43601d6b7b57b04c2a878e17db0ec4567347a7d6c3e6c766acf141d", "chunk": 16, "page_start": 31, "page_end": 32, "suggested_title": "Course Information Financial Accounting Leading with Finance", "situation": "learning-planning", "keywords": [ "financial", "want", "who", "business", "finance", "course", "learn", "decisions" ], "key_lines": [ "If you want to develop or further your financial skills, you might be interested in Harvard Business School Online’s Financial Accounting", "and Leading with Finance courses. Curious about which certificate program is the right fit for you? Here’s a closer look at what the", "Course Information Financial Accounting Leading with Finance", "How to prepare a balance sheet, income statement,", "A toolkit for making smart financial decisions and the" ], "closest_card": "cards/41-strategic-influence-perception.md", "similarity": 0.05351100254887465, "decision": "new-card-candidate", "text": "If you want to develop or further your financial skills, you might be interested in Harvard Business School Online’s Financial Accounting\n\nand Leading with Finance courses. Curious about which certificate program is the right fit for you? Here’s a closer look at what the\n\ncourses offer.\n\nCourse Information Financial Accounting Leading with Finance\n\nFaculty V.G. Narayanan Mihir Desai\n\nCourse Length 8 Weeks 6 Weeks\n\nWhat You’ll Learn • How to prepare a balance sheet, income statement, • A toolkit for making smart financial decisions and the\n\nand cash flow statement confidence to communicate those decisions to key\n\nstakeholders\n\n• Processes for reading and analyzing financial\n\nstatements to determine your company’s business • Financial analysis techniques and how capital markets work\n\nperformance and potential\n\n• Ways to create and assess value to evaluate and pitch\n\n• Forecasting and valuation methods projects\n\nWho Will Benefit • Current or aspiring managers who want to understand • Early- and mid-career professionals who want to understand\n\nhow their decisions impact their company’s bottom the financial landscape of their business and industry to\n\nline and improve its profitability advance their career—particularly if they’re in a non-finance\n\nrole\n\n• Recent graduates interested in learning the language\n\nof business • Aspiring finance professionals who want to learn fundamental\n\nfinancial terms, concepts, and principles\n\n• Those considering an MBA who want to prepare for\n\nthe classroom with a course HBS offers to incoming • New leaders who want to equip themselves with the skills to\n\nstudents create a budget, calculate ROI, and articulate the financial\n\nimplications of their decisions\n\nHow to Learn More Visit the Financial Accounting course page Visit the Leading with Finance course page\n\nBoth courses can equip you with skills that will prove invaluable in your role as a manager and throughout your career. You can also learn\n\nmore in Desai’s book, How Finance Works: The HBR Guide to Thinking Smart About the Numbers.\n\nDeveloping financial literacy will enable you to make better business decisions, understand the financial implications of your actions,\n\nand more effectively communicate and collaborate with others throughout your organization.\n\nTo learn more about what HBS Online\n\ncan do for you, visit online.hbs.edu.", "proposal_file": "document-review/proposals-20260624-090104/033-course-information-financial-accounting-leading-with-finance.md" } ]