# Dokument Import Review Erstellt: 2026-06-24 09:01 ## Übersicht | Quelle | Vorschlag | Situation | Ähnlichste Karte | Score | |---|---:|---|---|---:| | `Accounting Explained Visually - eBook.pdf Seite 1` | `new-card-candidate` | `learning-planning` | cards/47-decision-heuristics-cheat-sheet.md | 0.05 | | `Accounting Explained Visually - eBook.pdf Seite 6` | `new-card-candidate` | `learning-planning` | cards/47-decision-heuristics-cheat-sheet.md | 0.05 | | `Accounting Explained Visually - eBook.pdf Seite 12` | `new-card-candidate` | `learning-planning` | cards/55-spontan-antworten-mit-struktur.md | 0.03 | | `Accounting Explained Visually - eBook.pdf Seite 12` | `new-card-candidate` | `learning-planning` | cards/55-spontan-antworten-mit-struktur.md | 0.02 | | `Accounting Explained Visually - eBook.pdf Seite 16` | `new-card-candidate` | `before-1on1` | cards/47-decision-heuristics-cheat-sheet.md | 0.04 | | `Accounting Explained Visually - eBook.pdf Seite 23` | `new-card-candidate` | `before-1on1` | cards/05-strategy-workflow-os.md | 0.09 | | `Accounting Explained Visually - eBook.pdf Seite 27` | `new-card-candidate` | `learning-planning` | cards/05-strategy-workflow-os.md | 0.03 | | `Accounting Explained Visually - eBook.pdf Seite 33` | `new-card-candidate` | `learning-planning` | cards/19-salary-negotiation-and-pay-transparency.md | 0.03 | | `Accounting Explained Visually - eBook.pdf Seite 35` | `new-card-candidate` | `learning-planning` | cards/05-strategy-workflow-os.md | 0.03 | | `Accounting Explained Visually - eBook.pdf Seite 40` | `new-card-candidate` | `learning-planning` | cards/06-smart-leaders-say-no.md | 0.05 | | `Accounting Explained Visually - eBook.pdf Seite 44` | `new-card-candidate` | `learning-planning` | cards/05-strategy-workflow-os.md | 0.06 | | `Accounting Explained Visually - eBook.pdf Seite 46` | `new-card-candidate` | `learning-planning` | cards/19-salary-negotiation-and-pay-transparency.md | 0.04 | | `Accounting Explained Visually - eBook.pdf Seite 49` | `new-card-candidate` | `strategy-workshop` | cards/19-salary-negotiation-and-pay-transparency.md | 0.04 | | `Accounting Explained Visually - eBook.pdf Seite 52` | `new-card-candidate` | `learning-planning` | cards/41-strategic-influence-perception.md | 0.03 | | `Accounting Explained Visually - eBook.pdf Seite 55` | `new-card-candidate` | `before-1on1` | cards/47-decision-heuristics-cheat-sheet.md | 0.03 | | `Accounting Explained Visually - eBook.pdf Seite 58` | `new-card-candidate` | `learning-planning` | cards/06-smart-leaders-say-no.md | 0.08 | | `Applying MBA Knowledge in Engineering.pptx Seite 1` | `new-card-candidate` | `strategy-workshop` | cards/01-strategic-leadership-system.md | 0.10 | | `managers-guide-to-finance-and-accounting.pdf Seite 1` | `new-card-candidate` | `learning-planning` | cards/28-new-manager-90-day-blueprint.md | 0.04 | | `managers-guide-to-finance-and-accounting.pdf Seite 4` | `new-card-candidate` | `learning-planning` | cards/06-smart-leaders-say-no.md | 0.07 | | `managers-guide-to-finance-and-accounting.pdf Seite 7` | `new-card-candidate` | `learning-planning` | cards/47-decision-heuristics-cheat-sheet.md | 0.06 | | `managers-guide-to-finance-and-accounting.pdf Seite 8` | `new-card-candidate` | `learning-planning` | cards/19-salary-negotiation-and-pay-transparency.md | 0.03 | | `managers-guide-to-finance-and-accounting.pdf Seite 10` | `new-card-candidate` | `learning-planning` | cards/41-strategic-influence-perception.md | 0.08 | | `managers-guide-to-finance-and-accounting.pdf Seite 12` | `new-card-candidate` | `learning-planning` | cards/23-leadership-hard-truths.md | 0.05 | | `managers-guide-to-finance-and-accounting.pdf Seite 14` | `new-card-candidate` | `learning-planning` | cards/05-strategy-workflow-os.md | 0.06 | | `managers-guide-to-finance-and-accounting.pdf Seite 16` | `new-card-candidate` | `learning-planning` | cards/41-strategic-influence-perception.md | 0.03 | | `managers-guide-to-finance-and-accounting.pdf Seite 18` | `new-card-candidate` | `learning-planning` | cards/45-public-speaking-skills.md | 0.02 | | `managers-guide-to-finance-and-accounting.pdf Seite 19` | `new-card-candidate` | `learning-planning` | cards/41-strategic-influence-perception.md | 0.05 | | `managers-guide-to-finance-and-accounting.pdf Seite 21` | `new-card-candidate` | `learning-planning` | cards/06-smart-leaders-say-no.md | 0.04 | | `managers-guide-to-finance-and-accounting.pdf Seite 23` | `new-card-candidate` | `learning-planning` | cards/05-strategy-workflow-os.md | 0.03 | | `managers-guide-to-finance-and-accounting.pdf Seite 25` | `new-card-candidate` | `learning-planning` | cards/12-team-effectiveness-conditions.md | 0.10 | | `managers-guide-to-finance-and-accounting.pdf Seite 27` | `new-card-candidate` | `learning-planning` | cards/05-strategy-workflow-os.md | 0.07 | | `managers-guide-to-finance-and-accounting.pdf Seite 29` | `new-card-candidate` | `learning-planning` | cards/19-salary-negotiation-and-pay-transparency.md | 0.04 | | `managers-guide-to-finance-and-accounting.pdf Seite 31` | `new-card-candidate` | `learning-planning` | cards/41-strategic-influence-perception.md | 0.05 | ## Karten-Kandidaten ### ACCOUNTING - Vorschlag: `new-card-candidate` - Quelle: `Accounting Explained Visually - eBook.pdf` - Situation: `learning-planning` - Ähnlichste Karte: cards/47-decision-heuristics-cheat-sheet.md (0.05) - Tags: accounting, statement, should, financial, sheet, cash, balance, income Kernaussagen: - 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 Auszug: ```text ACCOUNTING EXPLAINED VISUALLY 50 SIMPLE INFOGRAPHICS THAT DEMYSTIFY FINANCIAL STATEMENTS BRIAN FEROLDI Hello and Welcome! Accounting is the language of business, but it’s an imperfect language. This eBook contains fifty infographics that will help you better understand the Balance Sheet, Income Statement, and Cash Flow Statement. Enjoy! Brian Feroldi (Click The Icons To Connect) INDEX GENERAL ACCOUNTING 13 Accounting Principles Fundamentals of Accounting Accounting Cycle Financial Statements - Cheat Sheet Financial Statements Connections BALANCE SHEET Balance Sheet Overview Balance Sheet Synonyms Questions to Ask How To Analyze A Balance Sheet Balance Sheet: Warren Buffett’s Rules of Thumb 4 Balance Sheet Ratios Balance Sheet Vs Income Statement Balance Sheet Vs Cash Flow Statement Yellow Flags Green Flags INCOME STATEMENT Income Statement Overview Income Statement Synonyms Questions to Ask Income Statement Rules of Thumb 5 Key Metrics Income Statement Vs. Cash Flow Statement How The Income Statement & Balance Sheet Link Yellow Flags Green Flags CASH FLOW STATEMENT Cash Flow Statement Overview Cash Flow Statement Synonyms Questions to Ask 7 Cash Flow Ratios Net Income Vs Free Cash Flow Accrual vs Cash Accounting Yellow Flags Green Flags EBITDA vs Free Cash Flow OTHER ACCOUNTING Gross Profit vs Gross Margin 6 Depreciation Methods Financial Statements: Warren Buffett’s Rules of Thumb Dupont Analysis 14 Profit Ratios Every Investor Should Know GAAP vs Non-GAAP - Cheat Sheet Debt Vs. Equity EBITDA Explained Simply Key Financial Ratios 20 Most Confused Finance Terms Costs vs Expenses Cash Conversion Cycle Financial Statement Yellow Flags Financial Statements Green Flags P&L Statement Visualized IFRS vs GAA ``` ### REVENUE Revenue is recorded at the All Tangible & Intangible items - Vorschlag: `new-card-candidate` - Quelle: `Accounting Explained Visually - eBook.pdf` - Situation: `learning-planning` - Ähnlichste Karte: cards/47-decision-heuristics-cheat-sheet.md (0.05) - Tags: balance, income, cash, accounting, time, step, sheet, assets Kernaussagen: - 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, Auszug: ```text REVENUE Revenue is recorded at the All Tangible & Intangible items ASSETS RECOGNITION time of the transaction. owned by the company. MATCHING Assets are recorded at their Amount the company owes LIABILITY PRINCIPLE acquisition cost. to others. HISTORICAL Fiscal Year Income is compared Net Worth of Company, EQUITY COST with Calendar Year Expense. Assets - Liabilities. FULL Full disclosure of all relevant Amount paid for purchases EXPENSE DISCLOSURE info is made available. made in the business. Information in books should Amount earned by company OBJECTIVITY INCOME be true, relevant, & accurate. from sale of goods. JOURNAL FINANCIAL STATEMENTS Journal Entries consist of Debits Income Statement: shows profit or loss & Credits, the totals of which during the period. should be equal Vs Balance Sheet: a company’s assets, liabilities, and equity at a particular time. LEDGER Journal are then transferred to Statement of Cash Flow: shows the inflow appropriate Ledger Accounts and outflow of cash during period. DOUBLE ENTRY • Each Accounting Entry will hare two sides - Debit and Credit. SYSTEM • The accounts used will be from any of above five categories. THREE FIELDS OF ACCOUNTING TYPES OF ACCOUNTS 1. Financial Accounting: Preparing Consists of tangible and the Financial Statements. REAL intangible assets. 2. Managerial Accounting: Preparing Accounts for individual, reports for internal use. PERSONAL group, entity, bank etc. 3. Cost Accounting: Measuring the Accounts related to Gain, performance of resources. NOMINAL Loss, Expense & Income. Follow Brian Feroldi on LongTermMindset.co AACCCCOOUUNNTTIINNGG CCYYCCLLEE BY BRIAN FEROLDI STEP 1 STEP 10 STEP 2 Identify Prepare journal transactions Prepare journal entries entries ST ``` ### BALANCE SHEET SYNONYMS - Vorschlag: `new-card-candidate` - Quelle: `Accounting Explained Visually - eBook.pdf` - Situation: `learning-planning` - Ähnlichste Karte: cards/55-spontan-antworten-mit-struktur.md (0.03) - Tags: assets, long-term, shares, notes, deferred, payable, capital, stock Kernaussagen: - 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 Auszug: ```text BALANCE SHEET SYNONYMS BY BRIAN FEROLDI NET WORTH STATEMENT STATEMENT OF FINANCIAL POSITION FINANCIAL STATUS REPORT STATEMENT OF FINANCIAL CONDITION Notes Deferred Revenue Deposits Near Cash Cash Assets Senior Debt Dividends Payable Recoverable VAT Liquid Assets Cash Reserves Creditors Current Debt Unearned Revenue Notes Receivable Marketable Securities Cash on Hand Supplier Debt Notes Payable Customer Deposits Prepaid Expenses Trade Creditors Bonds Payable Income Taxes Payable Assets Held for Sale Trade Payables Short-term Loans Accrued Interest Payable Deferred Tax Assets Due to Suppliers Convertible Notes Accrued Salaries and Wages Dividends Receivable Unpaid Expenses Convertible Senior Notes Current Maturities of Capital Advances to Suppliers Outstanding Bills Fixed Payment Obligations Lease Obligations Short-term Investments Trade Debtor Balances Accounts Payable Deferred Payment Other Accrued Liabilities Income Taxes Receivable Receivables Bills Receivable Accrued Expenses Obligations Current Portion of Long-term Outstanding Trade Debtors Outstanding Invoices Current Portion of Long-term Investments Invoices Receivables Debt Current Portion of Loans Receivable Stock Goods Notes Supplies Senior Debt Merchandise Long-term Loans Product Stock Convertible Notes On-hand Goods Non-Current Debt Warehouse Stock Subordinated Debt Mortgages Payable Long-term Financing CDs Long-term Borrowings Non-Current Liabilities Bonds Convertible Senior Notes Stocks Long-term Bonds Payable Private Equity Long-term Notes Payable Investments Fixed Payment Obligations Venture Capital Long-term Lease Obligations Investments Deferred Payment Obligations Long-term Notes Receivable Investment in Subsidiaries Investment in Joint Vent ``` ### Business Valuation Residual Equipment (PP&E) Founders' Shares Losses Shares in Treasury - Vorschlag: `new-card-candidate` - Quelle: `Accounting Explained Visually - eBook.pdf` - Situation: `learning-planning` - Ähnlichste Karte: cards/55-spontan-antworten-mit-struktur.md (0.02) - Tags: company, assets, cash, liabilities, there, any, stock, than Kernaussagen: - 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? Auszug: ```text 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 Balance Sheet Q U E S T I O N S T O A S K BY BRIAN FEROLDI How much cash does the company have? Are there accounts receivables? How much? Is there any inventory? How much? Is there any goodwill? How much? What are the company's biggest assets? Does the company have debt? How much? Does the company have deferred revenue? What are the company's biggest liabilities? How has the company been funded? Is there any preferred stock? Are retained earnings positive and growing? Is there any treasury stock? Follow Brian Feroldi on LongTermMindset.co How To BALANCE SHEET Analyze A By Brian Feroldi A balance sheet shows you what a company OWNS and OWES It’s like a company’s “Net Worth” statement Assets = Liabilities + Shareholders Equity Balance Sheet is a SNAPSHOT at a certain POINT IN TIME ASSETS LIABILITIES Shows everything the company OWNS. Shows everything the company OWES. Two categories of assets: Current Assets Two categories of liabilities: Current and Long-Term Assets. Liabilities and Long-Term Liabilities. Current Assets: Assets that are expected to be Current Liabilities: An obligation due in less used thin 1 year. than 1 year. Long-Term Assets: Assets that expected to last Long-Term Liabilities: An obligation due in longer than 1 year: greater than 1 year. Cash & cash equivalents Most Liquid SHAREHOLDER’S EQUITY Marketable securities Financial assets A company's net worth. Accounts receivable The dollar amount that would be returned Inventory to the owners if the company was Plant, property & ``` ### Antifragile = <10% - Vorschlag: `new-card-candidate` - Quelle: `Accounting Explained Visually - eBook.pdf` - Situation: `before-1on1` - Ähnlichste Karte: cards/47-decision-heuristics-cheat-sheet.md (0.04) - Tags: income, statement, balance, cash, brian, feroldi, total, time Kernaussagen: - 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 + Auszug: ```text Antifragile = <10% Ratio organically?" Assets Follow Brian Feroldi on LongTermMindset.co IINNCCOOMMEE BBAALLAANNCCEE SSTTAATTEEMMEENNTT SSHHEEEETT BRIAN FEROLDI PURPOSE PURPOSE Track What it Owns & Owes Track Income & Expenses SIMILAR TO SIMILAR TO Your Net Worth Your Budget TIME TIME Point in Time Snapshot Period of Time ACCOUNTING ACCOUNTING Accrual Accounting Accrual Accounting ++ ADDITIONAL DETAILS ++ ADDITIONAL DETAILS Assets must always exactly equal Liabilities + Shareholder‘s Equity. Also called a “Profit & Loss“ statement or “P&L“. Cash Balance comes from the ending balance on the Has a start and end date. Cash Flow Statement. Net Income is added to Retained Earnings on the Retained Earnings balance comes from last period's Balance Sheet minus any Dividend Payments. Balance Sheet plus this month's Net Income on your Income Statement minus any Dividends Paid. Follow Brian FFeorlololdwi o Bnr ian Feroldi on LongTermMindset.co BBAALLAANNCCEE CCAASSHH FFLLOOWW SSHHEEEETT SSTTAATTEEMMEENNTT BRIAN FEROLDI PURPOSE PURPOSE Track What it Owns & Owes Track Cash Movements TIME TIME Point in Time Snapshot Period of Time ACCOUNTING ACCOUNTING Accrual Accounting Cash Accounting ++ ++ ADDITIONAL DETAILS ADDITIONAL DETAILS Assets must always exactly equal Liabilities + Ending cash balance becomes Cash on the Balance Shareholder‘s Equity. Sheet Cash Balance comes from ending balance on the Cash Begins with Net Income from the Income Statement Flow Statement. Retained Earnings balance comes from last period's Cash Flow From Operation minus Capital Expenditures Balance Sheet + this month's Net Income on your equals Free Cash Flow Income Statement. Follow Brian FFeorlololdwi o Bnr ian Feroldi on LongTermMindset.co 8 BALANCE SH ``` ### Operating Profit - Vorschlag: `new-card-candidate` - Quelle: `Accounting Explained Visually - eBook.pdf` - Situation: `before-1on1` - Ähnlichste Karte: cards/05-strategy-workflow-os.md (0.09) - Tags: income, margin, profit, tax, operating, revenue, gross, earnings Kernaussagen: - 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 Auszug: ```text Operating Profit Operational Expenses Operating Earnings Business Expenses Operating Margin Earnings Before Interest Other Income / Expense and Taxes (EBIT) Interest Income / Expense Operating Cash Flow Secondary Income / Expense Business Income Incidental Income / Expense Extraordinary Items Earnings Before Tax (EBT) Tax on Income Income Before Tax Revenue Tax Profit Before Tax (PBT) Operating Profit Before Tax Earnings Tax Earnings Before Income & Fiscal Charge on Income Taxes (EBIT) Corporate Income Tax Pretax Earnings Direct Tax Pretax Profit Earnings Net Earnings Net Profit Bottom Line Profits Issued Shares Income EPS Basic Shares Outsanding Net Income After Taxes Diluted shares Outstanding Net Income Per Share Profit After Tax (PAT) Fully Diluted Shares Outstanding Profit Per Share Earnings After Tax (EAT) Outstanding Stock Net Income Before Outstanding Equity Extraordinary Items Outstanding Shares of Stock Follow Brian Feroldi on LongTermMindset.co Income Statement Q U E S T I O N S T O A S K BRIAN FEROLDI Does revenue consistently grow? What is the gross margin? Is the gross margin stable? Expanding? Contracting? Why? Are there research + development expenses? Are there selling + marketing expenses? What are the company's biggest operating expenses? What is the company operating margin? Does the company have any non-operating expenses? What is the company net profit margin? Is the company profitable on a Non-GAAP basis? Is the company profitable on a GAAP basis? Follow Brian Feroldi on LongTermMindset.co WARREN BUFFETT’S INCOME STATEMENT RULES OF THUMB BY BRIAN FEROLDI METRIC: EQUATION: RULE OF THUMB: Gross Gross Profit >40% Margin Revenue SG&A SG&A <30% Margin Gross Profit R&D R&D <30% Ma ``` ### Also called a “Profit & Loss“ statement or “P&L“ Has a start and end date - Vorschlag: `new-card-candidate` - Quelle: `Accounting Explained Visually - eBook.pdf` - Situation: `learning-planning` - Ähnlichste Karte: cards/05-strategy-workflow-os.md (0.03) - Tags: cash, income, statement, net, flow, brian, feroldi, expenses Kernaussagen: - 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 Auszug: ```text 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 INCOME STATEMENT HOW THE & BALANCE SHEET LINK BY BRIAN FEROLDI INCOME STATEMENT ITEM EXPLANATION Accountant's estimate of the sales generated Start Revenues by any transactions made the business With during the period. OPERATING Include all expenses associated with EXPENSES Operating Net Out operation this year, with no benefits spilling Expenses over into future years. WRITTEN OFF AS Operating To Get Operating profitability of business. DEPRECIATION Profit OR AMORTIZATION Financial Subtract non-operating expenses (interest FINANCING OVER LIFE OF ASSET Net Out Income & payments on debt). Add non-operating EXPENSES Expenses income (interest income, equity investments). Taxable ADD / SUBTRACT To get Income to equity investors before taxes. Income BORROWINGS ON NON-OPERATING BALANCE SHEET INCOME / Net Out Taxes Taxes, based upon taxable income. EXPENSES To get Net Income Income to equity investors, after taxes. NON-OPERATING BALANCE SHEET EXPENSES ASSETS LIABILITIES Current Current SHORT LIVED ASSETS SHORT TERM OBLIGATIONS Assets Liabilities LONG LIVED Fixed Debt LONG TERM DEBT PHYSICAL ASSETS Assets INVESTEMENTS IN Financial Other OTHER LONG TERM SECURITIES & OTHER Assets Liabities OBLIGATIONS BUSINESS NET INCOME Intangible ASSETS WHICH ARE NOT Equity SHAREHOLDERS' EQUITY PHYSICAL Assets Follow Brian Feroldi on LongTermMindset.co 6 INC ``` ### Income Profit After Tax (PAT) Depreciation Amortization - Vorschlag: `new-card-candidate` - Quelle: `Accounting Explained Visually - eBook.pdf` - Situation: `learning-planning` - Ähnlichste Karte: cards/19-salary-negotiation-and-pay-transparency.md (0.03) - Tags: cash, flow, debt, company, issuance, stock, activities, dividend Kernaussagen: - 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 Auszug: ```text 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 and Losses Impairment Charges Non-Cash Interest Expense Stock Liabilities Credit Provisions Accruals Inventories Payables Receivables OCF Operating Activities Prepayments Cash Profit Cash from Operations Cash Earned Cash Generated from Cash Income Operations Operating Cash Net Cash from Operating Activities Capex Facilities Spend PPE Spend Equipment Spend Asset Buys Investment Spend Merger Asset Acquisition Plant Outlay Infrastructure Takeover Company Purchase Infrastructure Spend Purchase Business Purchase Outlay Property, Plant, and Asset Buy Corporate Acquisition Property Spend Equipment Consolidation Sale Gain Liquidation Investing Cash Cash Flow from Disposal Investment Investment Flow Investments Asset Sale Sale Investment Outlay Net Cash Used Divestiture Divestment Cash from Investing in Investing Sale Proceeds Proceeds Investing Cash Flows Activities Capital Returns Investment Cash Used in Investing Disposal of Liquidation Investments Proceeds from Stock Sale Proceeds from Investment Equity Issue Sales of Assets Disposal Issuing Shares Equity Buyback Debt Issue Share Buyback Debt Raised Stock Issuance Loan Issuance Equity Offering Bond Issuance Share Issuance Stock Redemption Debt Refinance Share Redemption Debt Retirement Equity Redemption Debt Repayment Equity Repurchase Loan Repayment Stock Repurchase Bond Repayment Share Repurchase Debt Issuance/Repayment Issuance of Shares Debt Pay-down Payouts Payment of Dividends Finance Cash Repurchase of Shares Dividends Dividend Remittance Funding Cash Repu ``` ### pay off its current - Vorschlag: `new-card-candidate` - Quelle: `Accounting Explained Visually - eBook.pdf` - Situation: `learning-planning` - Ähnlichste Karte: cards/05-strategy-workflow-os.md (0.03) - Tags: cash, flow, income, net, operating, brian, feroldi, company Kernaussagen: - 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 Auszug: ```text pay off its current 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. expenditures. PRICE TO 5 CASH FLOW RETURN ON 44 CASH FLOW RATIO INVESTMENT A company's stock price is Present value of cash flows compared to its operating cash divided by invested capital. It flow per share. It shows how much shows the return on investment investors are willing to pay for generated by a company's cash each dollar of operating cash flow. flow. 66 DEBT TO OPERATING CASH 77 CASH FLOW MARGIN FLOW RATIO Operating cash flow compared to Total debt is compared to operating revenue. It shows how much of cash flow. It shows how many years it each dollar of revenue is would take for a company to pay converted into cash flow. off its debt using its operating cash flow. Follow Brian FFeorlololdwi o Bnr ian Feroldi on LongTermMindset.co NNEETT FFRREEEE IINNCCOOMMEE CCAASSHH FFLLOOWW BRIAN FEROLDI ACCOUNTING ACCOUNTING Accrual Accounting Cash Accounting Follow Brian Feroldi on LongTermMindset.co ACCRUAL CASH AACCCCOOUUNNTTIINNGG BRIAN FEROLDI ACCRUAL CASH METHOD METHOD WHAT IT FOCUSES ON: WHAT IT FOCUSES ON: Income Earned vs Cash Inflow vs Expenses Incurred Cash Outflow USED ON: USED ON: Income Statement Cash Flow Statement & Balance Sheet PROS: PROS: GAAP Compliant Easy to create Provides a smoothed-out More natural accounting view of expenses & profits CONS: CONS: Might not accurately show the Results can be lumpy cash flow of a business Readers may not grasp More time-consuming to the full picture of what is create happening in the business Understates revenues of Not compliant with GAAP businesses that charge ``` ### 33.. Proxy for Cash Generation: EBITDA is often used - Vorschlag: `new-card-candidate` - Quelle: `Accounting Explained Visually - eBook.pdf` - Situation: `learning-planning` - Ähnlichste Karte: cards/06-smart-leaders-say-no.md (0.05) - Tags: depreciation, cost, asset, life, used, useful, value, years Kernaussagen: - 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. Auszug: ```text 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. or Net Income CONS CONS 11..Ignores Non-Operating Expenses: EBITDA 11.. Complexity: There are many varieties of FCF, which excludes important expenses such as interest, can make them time-consuming to calculate taxes, depreciation, and amortization. 22.. Volatility: FCF can fluctuate widely from year to 22.. Lack of Cash Flow Information: EBITDA does not year due to changes in working capital needs and provide accurate insights into a company's ability capital expenditure spending cycles. to generate cash. 33.. Limited Comparability: Comparing FCF across 33.. Susceptible to Manipulation: EBITDA can be industries is challenging due to differences in manipulated by adjusting accounting practices, accounting practices and capital structures. making it less reliable. Follow Brian FFeorlololdwi o Bnr ian Feroldi on LongTermMindset.co OTHER ACCOUNTING GG RR OO SS SS GG RR OO SS SS PP RR OO FF II TT MM AA RR GG II NN BRIAN FEROLDI GROSS PROFIT GROSS MARGIN WHAT WHAT The difference between total A profitability ratio that revenue and cost of goods sold. shows the percentage of sales that become gross profit. FORMULA FORMULA (REVENUE - COST OF GOODS SOLD) REVENUE - COST OF GOODS SOLD REVENUE RESULT RESULT The amount of revenue remaining The percentage of each dollar of after all costs to produce the product or service have been sales that becomes gross profit. subtracted. Follow Brian FFeorlololdwi o Bnr ian Feroldi on LongTermMindset.co 66 Depreciation Methods BY BRIAN FEROLDI DEPRECIATION Depreciation is a ``` ### METRIC EQUATION THRESHOLD - Vorschlag: `new-card-candidate` - Quelle: `Accounting Explained Visually - eBook.pdf` - Situation: `learning-planning` - Ähnlichste Karte: cards/05-strategy-workflow-os.md (0.06) - Tags: revenue, margin, profit, gross, income, net, cash, total Kernaussagen: - 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 Auszug: ```text METRIC EQUATION THRESHOLD Gross Gross Profit >40% Margin Revenue SG&A SG&A <30% Margin Gross Profit R&D R&D <30% Margin Gross Profit Depreciation Depreciation Margin <10% Gross Profit INCOME Interest Interest STATEMENT <15% Margin Operating Income Corporate Tax Taxes Margin Pre-Tax Income Tax Rate Net Income Net Income >20% Margin Revenue Positive & EPS Year 2 EPS Growth Year 1 EPS Growing Cash & Debt Cash > Debt Cash > Debt Total Liabilities Adjusted Debt to Equity Shareholder Equity + Below 0.80 Treasury Stock BALANCE Preferred Stock NONE NONE SHEET Consistent Year 2 Retained Earnings Retained Earnings Year 1 Retained Earnings Growth Treasury Stock Treasury Stock > 1 Exists CASH FLOW Capex Capex Margin <25% STATEMENT Net income Follow Brian Feroldi on LongTermMindset.co 1100 KKPPIISS EVERY INVESTOR SHOULD KNOW BY BRIAN FEROLDI KPI FORMULA DETAILS Recurring revenue is more valuable than Non-Recurring RECURING RECURRING REVENUE Revenue due to its predictability and stickiness. REVENUE SPLIT The higher the % of recurring revenue, the higher the TOTAL REVENUE valuation multiple should be. Gross Margin tells you how much revenue you get to keep GROSS PROFIT after paying for the production of your product or service. GROSS MARGIN The higher the Gross Margin, the more profit you keep for REVENUE each dollar in sales. NET PROFIT Net Profit Margin shows how much profit is left after ALL NET INCOME costs and expenses have been deducted from revenue. MARGIN REVENUE The higher the NPM, the more profitable your business. Lifetime Value (LTV) measures how much gross profit each customer contributes to your bus each GROSS PROFIT SINCE INCEPTION LIFETIME VALUE LTV is driven by (1) profitability per transaction and ``` ### Income Assets - Vorschlag: `new-card-candidate` - Quelle: `Accounting Explained Visually - eBook.pdf` - Situation: `learning-planning` - Ähnlichste Karte: cards/19-salary-negotiation-and-pay-transparency.md (0.04) - Tags: income, sales, net, equity, cash, profit, debt, 000 Kernaussagen: - 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. Auszug: ```text Income Assets Year 1 Year 2 ProfitCo Net Income $1,000 $1,200 Revenue $10,000 $10,000 Profit Margin 10% 12% Revenue $10,000 $10,000 Average Assets $5,000 $4,800 Asset Turnover 2 2.08 Average Assets $5,000 $4,800 Average Equity $2,000 $2,000 Financial Leverage 2.5 2.4 50% 60% ROE Follow Brian Feroldi on LongTermMindset.co 14 Profit Ratios BY BRIAN FEROLDI WHAT FORMULA Gross Profit GROSS MARGIN Percentage of Revenue that becomes Gross Profit. Sales Percentage of Sales that becomes Earnings Before EBITDA EBITDA MARGIN Interest, Sales Taxes, Depreciation, and Amortization (EBITDA). Operating Income OPERATING MARGIN Percentage of Sales that becomes Operating Income. Sales Percentage of Sales that becomes Earnings Before EBIT EBIT MARGIN Interest & Taxes (EBIT) are subtracted. Sales EBT MARGIN (PRE-TAX Percentage of Sales that becomes Earnings Before Taxes EBT MARGIN) (EBT), also known as the Pre-Tax Profit. Sales Percentage of Sales that becomes Earnings (Net Income) Net Income NET PROFIT MARGIN after all costs are subtracted. Sales FREE CASH Percentage of Sales that becomes Free Cash Flow Free Cash Flow FLOW MARGIN (Cash Flow From Operations - Capital Expenditures). Sales EARNINGS PER SHARE How much Profit (Net Income) a company makes on Net Income (EPS) a Per Share Basis. Shares Outstanding RETURN ON Net Income How much Profit a company generates from its Assets. ASSETS (ROA) Total Assets RETURN ON Measures how Profit a company generates in relation to Net Income EQUITY (ROE) its Equity (the money shareholders have invested.) Equity Measure how much Net Operating Profit After Tax RETURN ON INVESTED NOPAT (NOPAT) a company generates in relation to its Invested CAPITAL (ROIC) Total Invested Capital Capital. Measures ho ``` ### When issuing When issuing - Vorschlag: `new-card-candidate` - Quelle: `Accounting Explained Visually - eBook.pdf` - Situation: `strategy-workshop` - Ähnlichste Karte: cards/19-salary-negotiation-and-pay-transparency.md (0.04) - Tags: earnings, company, income, measures, net, profit, ratio, interest Kernaussagen: - 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 Auszug: ```text When issuing When issuing debt... equity... Credit: Common Stock / Credit: Debt Preferred Stock Follow Brian FFeorlololdwi o Bnr ian Feroldi on LongTermMindset.co BY BRIAN FEROLDI Dividends (To Owners) TBE TAE ER EEBBIITTDDAA EXPLAINED SIMPLY Gross Profit = Revenue - Net Income COGS (Cost of Goods Sold) WHAT IS EBITDA? + Interest Operating Profit = EBIT EBITDA = Earnings (Earnings Before Interest Before Interest, Taxes, + Taxes =EBITDA and Taxes) Depreciation Net Profit = EAT (Earnings + Depreciation & Amortization After Taxes) + Amortization Retained Earnings = RE EBITDA A major financial Requires information It does not take into indicator used for from the company's account all business evaluating the Income Statement and activities and it might profitability of companies Cash Flow Statement. overstate cash flow. with different capital structures. )EUNEVER( SELAS TIFORP SSORG ADTIBE TIBE Cost of Goods Sold (To Suppliers) General Expenses (To Employees) Equipment Depreciation & Intangible Amortization Interest (To Creditors) Taxes (To Government) Follow Brian Feroldi on LongTermMindset.co Key Financial Ratios BRIAN FEROLDI IDEAL CATEGORY RATIO FORMULA EXPLANATION RANGE Inventory Cost of Goods Sold Measures how many times a company's Varies Turnover Average Inventory inventory is sold and replaced over a period Efficiency Ratios Asset Sales Measures a firm's efficiency at using its assets in Varies Turnover Total Assets generating sales or revenue Current Current Assets Measures a company's ability to pay 1.5 - 2.0 Ratio Current Liabilities short-term obligations Liquidity Ratios Quick (Current Assets - Inventory) Another liquidity ratio, but excludes inventory 1.0 - 1.5 Ratio Current as it is les ``` ### ACCRUAL CASH ACCOUNTING MARKET CAP ENTERPRISE VALUE - Vorschlag: `new-card-candidate` - Quelle: `Accounting Explained Visually - eBook.pdf` - Situation: `learning-planning` - Ähnlichste Karte: cards/41-strategic-influence-perception.md (0.03) - Tags: cash, days, outstanding, inventory, expenses, revenue, sales, brian Kernaussagen: - 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 Auszug: ```text deducting all expenses. product & service sales. acquire, upgrade, and the business. maintain physical assets. 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 incurred, regardless of when exchanged. shares. cash. cash is exchanged. ASSETS LIABILITIES GROSS MARGIN NET MARGIN All resources owned and All obligations a company Revenue minus cost of goods Net profit divided by controlled by a company. owes to others. sold, divided by revenue. revenue. RETURN ON RETURN ON FINANCIAL OPERATING INVESTMENT EQUITY LEVERAGE LEVERAGE Measures profitability Measures profitability The use of debt in capital The use of fixed vs. variable relative to total relative to shareholders’ structure to amplify net expenses to amplify investment. equity. income. operating income. Follow Brian Feroldi on LongTermMindset.co COSTS VS EXPENSES BY BRIAN FEROLDI COSTS EXPENSES DEFINITION DEFINITION The value of resources The outflow of used to produce goods resources to generate or services. revenue. TIMING TIMING Incorporated in Incorporated throughout cost of goods sold. the income statement. NATURE NATURE Direct costs associated Includes direct and with production. indirectt expenses. VARIABILITY VARIABILITY Can be fixed or Can be fixed or variable. variable. PERIODICITY PERIODICITY Tied to production Incurred over time, not activities, occurring necessarily tied to during manufacturing. production. APPLICATION APPLICATION Refers to the production Encompasses a broad of goods or delivery of rage on business services. expenditures. MANAGEMENT MANAGEMENT Emphasizes opt ``` ### Retained Earnings Excessive - Vorschlag: `new-card-candidate` - Quelle: `Accounting Explained Visually - eBook.pdf` - Situation: `before-1on1` - Ähnlichste Karte: cards/47-decision-heuristics-cheat-sheet.md (0.03) - Tags: income, than, cash, interest, brian, feroldi, assets, net Kernaussagen: - 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 Auszug: ```text Retained Earnings Excessive Expenses Are Negative Dilution Rising Faster Than Revenue Follow Brian Feroldi on LongTermMindset.co FINANCIAL STATEMENTS GREEN FLAGS BRIAN FEROLDI INCOME CASH FLOW STATEMENT STATEMENT BALANCE SHEET More Cash Than Debt No Accounts Receivables No Inventory Goodwill Less Than 10% of Accelerating Revenue Total Assets Growth Net Income Positive & Current Liabilities Less Gross Margin Expansion Growing Than Cash Operating Expenses Stock-Based Growing Slower Than No Short-Term or Long Compensation Less Than Revenue Term Debt 10% of Net Income Operating Margin Expands Deferred Revenue Operating Cash Flow Interest Income Exceeds Higher Than Net Income No Preferred Stock Interest Expenese Capital Expenditures Retained Earnings Positive Pre-Tax Margin Expands Less Than 10% of Net Income Tax Rate Near 21% & Growing Income Net Income Grows Faster Treasury Stock Free Cash Flow Higher Than Revenue Than Net Income Shares Outstanding Stock Repurchase Declines Dividends Paid Earnings Per Share Cash Balance Increase Consistently Grows Follow Brian Feroldi on LongTermMindset.co BY BRIAN FEROLDI D&R A&GS PP&&LL SSTTAATTEEMMEENNTT VISUALIZED PROFIT AND LOSS STATEMENT Costs of Goods Sold (To Suppliers & Manufacturing Employees) Research & Development Expense (To Engineering & Research Employees) Cost of Interest on Debt (To Banks & Bond Holders) Tax Expense (To Governments) e C 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 e e s n e e R G g, n elli S euneveR SGOC PG PO TBE ``` ### CONSOLIDATION - Vorschlag: `new-card-candidate` - Quelle: `Accounting Explained Visually - eBook.pdf` - Situation: `learning-planning` - Ähnlichste Karte: cards/06-smart-leaders-say-no.md (0.08) - Tags: assets, value, net, working, capital, debt, current, fair Kernaussagen: - 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 Auszug: ```text 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 CONSOLIDATION 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 MEASUREMENT LIFO allowed with other methods, Method can vary across LIFO not allowed, Same method required with Inventory of Inventory groups. This cost method is used primarily for oil INVENTORIES similar nature; write- backs of previously recognised write and gas companies to minimise taxable income. No permit downs to net realisable value. Same measurement formula is write-backs of previously recognised write-downs to net required to the all inventories of same nature realisable value. Not required that an entity use the same formula for all inventories. IRS allows companies to elect fair value treatment of fixed Fixed assets are measured at their initial cost; their value assets, meaning their reported value can increase or decrease FIXED ASSETS can decrease via depreciation or impairments, but it as their fair value changes. In addition, IRS requires separate cannot increase depreciation processes for separable components of PP&E INTANGIBLES Fair value allowed Historical cost IRS 15, effective 2018 - Converged standard focusing on a ASC 606, effective 2018 - US GAAP allows an entity to make a conceptual framework using a 5-step process for recognizing policy election to account for shipping and revenue. Minor differences in implementation and updates. handling activities that occur after the customer has obtained REVENUES Revenue for similar licenses under IRS 15 may be recognized cont ``` ### 1. Strategy & Decision-Making - Vorschlag: `new-card-candidate` - Quelle: `Applying MBA Knowledge in Engineering.pptx` - Situation: `strategy-workshop` - Ähnlichste Karte: cards/01-strategic-leadership-system.md (0.10) - Tags: engineering, financial, capital, project, projects, ensuring, strategic, operational Kernaussagen: - 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. Auszug: ```text Draft 1. Strategy & Decision-Making Long-term capital planning aligned with corporate goals: Developing a structured investment roadmap for engineering projects, ensuring alignment with company-wide strategic priorities, such as sustainability, digital transformation, and operational efficiency. 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. 2. Finance & Accounting 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. ROI and financial risk assessments for major investments: Using 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. Draft 3. Mergers & Acquisitions (M&A) Evaluating synergy effects in supplier contracts: Assessing how supplier integration can reduce procurement costs, enhance reliability, and create economies of scale, similar to how large M&A deals seek synergy benefits. Due diligence mindset in project collaborations: Applying 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. 4. Leadership & Stakeholder Management Engaging cross-functional teams for project execution: Leading discussions with finance, operations, and senior management to align engineering projects with broader business objectives, ensuring smooth execution and adoption. Navigating power-interes ``` ### A Manager’s - Vorschlag: `new-card-candidate` - Quelle: `managers-guide-to-finance-and-accounting.pdf` - Situation: `learning-planning` - Ähnlichste Karte: cards/28-new-manager-90-day-blueprint.md (0.04) - Tags: financial, finance, accounting, can, manager, organization, company, understanding Kernaussagen: - 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: - Engineering: Engineering is a project-based field, in which attention to Auszug: ```text A Manager’s Guide to Finance & Accounting Contents 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: What’s the Difference? Engineering: Engineering is a project-based field, in which attention to 6 Financial Skills All Managers detail is highly valued. Understanding the costs and benefits of each component of a project can make you a more effective manager. Should Have Financial Statement Analysis .............7 Marketing: Whether you’re projecting future traffic flow to your company’s website or tracking the number of new customers driven by your latest Financial Fluency .............................21 blog post, you’re using financial skills and concepts to excel as a marketer. ROI Calculation ...............................23 Sales: As a sales manager, knowing how to read a financial statement and Budgeting ........................................26 use financial terminology can help you understand the rationale behind Financial Performance your company’s goals. Measurement ..................................28 Human Resources: If you’re an HR manager, a familiarity with finance and 31 Taking the Next Step in Your accounting can enable you to facilitate meaningful cross-departmental conversations and advocate for your budget to hire or train employees. Financial Education Healthcare: A foundational knowledge of financial principles and concepts can inform decisions to purchase emerging technologies or fund new research that equips your org ``` ### Free cash flow is arguably the most important one, which - Vorschlag: `new-card-candidate` - Quelle: `managers-guide-to-finance-and-accounting.pdf` - Situation: `learning-planning` - Ähnlichste Karte: cards/06-smart-leaders-say-no.md (0.07) - Tags: company, financial, value, finance, which, cash, can, accounting Kernaussagen: - 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 Auszug: ```text 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 present-day investment decisions based on an expectation of The equation consists of three components: future payoff. • Assets: Anything a company owns with quantifiable value • Liabilities: Money a company owes to a debtor, such as outstanding payroll expenses, debt payments, rent and utilities, bonds payable, and taxes • Owners’ equity: The net worth of a company, or the amount that would be left if all assets were sold and all liabilities paid; this money belongs to shareholders, who may be private owners or public investors Finance vs. Accounting: What’s the Difference? 4 2. How You Measure Financial 3. How You Assess Value Performance Another difference between the disciplines is their approach to value. In accounting, a conservatism principle is often This difference in scope underscores a contrast between the applied, which suggests that companies should record underlying principles of accounting and finance. lower projected values of their assets and higher estimates The accrual method of accounting, followed by most of their liabilities. Under this doctrine, if you don’t know the organizations, records transactions as they’re agreed value of something precisely, you count it as zero. Doing upon, as opposed to when they’re completed. It allows for so helps businesses avoid overextending themselves by transactions to be made with credit or deferred payments underestimating the value of assets and overestimating the and operates under the idea that revenues and co ``` ### The Balance Sheet When a balance sheet is reviewed internally, it’s designed to - Vorschlag: `new-card-candidate` - Quelle: `managers-guide-to-finance-and-accounting.pdf` - Situation: `learning-planning` - Ähnlichste Karte: cards/47-decision-heuristics-cheat-sheet.md (0.06) - Tags: balance, sheet, assets, company, equity, liabilities, owners, information Kernaussagen: - 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 Auszug: ```text 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 give insight into whether a company is succeeding or failing. Based on this information, policies and approaches can be A balance sheet is a financial document designed to shifted: doubling down on successes, correcting failures, and communicate exactly how much a company or organization is pivoting toward new opportunities. worth—its “book value.” It achieves this by listing and tallying all of a company’s assets, liabilities, and owners’ equity as of a When a balance sheet is reviewed externally, it’s designed particular reporting date. to give insight into the resources available to a business and how they were financed. Based on this information, potential Typically, a balance sheet is prepared and distributed on a investors can decide whether it would be wise to invest. quarterly or monthly basis, depending on the frequency of External auditors might also use a balance sheet to ensure a reporting as determined by law or company policy. company is complying with any reporting laws it’s subject to. The Purpose of a Balance Sheet It’s important to remember that a balance sheet communicates information as of a specific date. By its very nature, a balance Balance sheets serve two very different purposes, depending sheet is always based on past data. While investors and on the audience reviewing them. stakehold ``` ### • Brands - Vorschlag: `new-card-candidate` - Quelle: `managers-guide-to-finance-and-accounting.pdf` - Situation: `learning-planning` - Ähnlichste Karte: cards/19-salary-negotiation-and-pay-transparency.md (0.03) - Tags: liabilities, assets, june, company, non-current, equity, balance, owners Kernaussagen: - 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 Auszug: ```text • Brands 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. owners’ equity. Without this knowledge, it can be challenging to understand the balance sheet and other financial documents that speak to a company’s health. Financial Skills All Managers Should Have 8 Liabilities Owners’ Equity A liability is the opposite of an asset. While an asset is Owners’ equity, also known as shareholders’ equity, something a company owns, a liability is something it owes. typically refers to anything that belongs to the owners of a Liabilities are financial and legal obligations to pay an amount business after liabilities are accounted for. of money to a debtor, which is why they’re typically tallied as If you were to add up all the resources a business owns (the negatives (-) in a balance sheet. assets) and subtract all of the claims from third parties (the Just as assets are categorized as current or non-current, liabilities), the residual left over is the owners’ equity. liabilities are classified the same way. Owners’ equity typically includes two elements. The first is Current liabilities typically refer to any liability due to the money, which is contributed to the business in the form of debtor within one year, which may include: an investment in exchange for some degree of ownership— typically represented by shares. The second is earnings that • Payroll expenses • Debt financing the company generates over time and retains. • Rent payments • Accounts payable • Utility payments • Other accrued expenses Non-current liabilities typically refer to any long-term obl ``` ### slightly more than the same period a ACCOUNTS PAYABLE 4,234 4,307 - Vorschlag: `new-card-candidate` - Quelle: `managers-guide-to-finance-and-accounting.pdf` - Situation: `learning-planning` - Ähnlichste Karte: cards/41-strategic-influence-perception.md (0.08) - Tags: income, statement, business, financial, expenses, period, revenue, total Kernaussagen: - 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 Auszug: ```text slightly more than the same period a ACCOUNTS PAYABLE 4,234 4,307 year prior. TAX LIABILITIES - 1,851 OTHER LIABILITIES 2,765 2,428 ACCRUED EXPENSES AND OTHER DEFERRED REVENUE 7,011 6,171 TOTAL LIABILITIES $ 16,338 $ 16,084 SHAREHOLDERS’ EQUITY JUNE 30, 2020 JUNE 30, 2019 SHARE CAPITAL $207 $207 RESERVES (1,900) (487) RETAINED EARNINGS 45,528 44,384 Financial Skills All Managers Should Have TOTAL SHAREHOLDERS’ EQUITY 43,835 10 44,104 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 60,173 $ 60,188 The Income Statement Accountants, investors, and business owners regularly review income statements to understand how well a business is doing in relation to its expected performance and use that An income statement, also known as a profit and loss (P&L) knowledge to adjust their actions. A business owner whose statement, summarizes the cumulative impact of revenue, company misses targets might, for example, pivot strategy gain, expense, and loss transactions for a given period. The to improve in the next quarter. Similarly, an investor might document is often shared as part of quarterly and annual decide to sell an investment to buy into a company that’s reports, and shows financial trends, business activities meeting or exceeding its goals. (revenue and expenses), and comparisons over set periods. The Contents of an Income Statement The Purpose of an Income Statement While all financial data helps paint a picture of a company’s An income statement tells the financial story of a business’s financial health, an income statement is one of the most activities. Within an income statement, you’ll find all revenue important documents a company’s management team and and expense accounts for a set period. Accountants create individual investors can review ``` ### net profit, interest, taxes, depreciation, and amortization - Vorschlag: `new-card-candidate` - Quelle: `managers-guide-to-finance-and-accounting.pdf` - Situation: `learning-planning` - Ähnlichste Karte: cards/23-leadership-hard-truths.md (0.05) - Tags: analysis, financial, line, horizontal, company, income, accounting, vertical Kernaussagen: - 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 Auszug: ```text net profit, interest, taxes, depreciation, and amortization improving. together 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 questions should be asked, such as: Where did costs rise or of its income statement. For example, revenue is often split fall? What line items are contributing most to profit margins? out by product line or company division, while expenses may How are they affected over time? be broken down into procurement costs, wages, rent, and interest paid on debt. Income Statement Analysis There are two methods commonly used to read and analyze an organization’s financial documents: vertical analysis and horizontal analysis. Vertical Analysis Vertical analysis refers to the method of financial analysis where each line item is listed as a percentage of a base figure within the statement. This means line items on income statements are stated in percentages of gross sales instead of in exact amounts of money, such as dollars. Financial Skills All Managers Should Have 12 Horizontal Analysis Whereas vertical analysis focuses on each line item as a percentage of a base figure BUSINESS INSIGHT: within a current period, horizontal analysis Accounting Standards: GAAP vs. IFRS compares changes in the dollar amounts in a company’s financial statements over Accounting standards are critical to ensuring a multiple reporting periods. It’s frequently company’s financial information and statements are used in absolute comparisons but can be accurate and comparable to data reported by other used as percentages, too. organizations. Horizontal analysis makes ``` ### ended on September 28, 2019. NET SALES $ 4,358,100 - Vorschlag: `new-card-candidate` - Quelle: `managers-guide-to-finance-and-accounting.pdf` - Situation: `learning-planning` - Ähnlichste Karte: cards/05-strategy-workflow-os.md (0.06) - Tags: cash, flow, income, operating, expenses, profit, activities, statement Kernaussagen: - 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 Auszug: ```text ended on September 28, 2019. NET SALES $ 4,358,100 COST OF SALES 2,738,714 GROSS PROFIT 1,619,386 This income statement tells you: 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 GENERAL AND ADMINISTRATIVE EXPENSES 293,729 to achieve those sales, for a gross profit of $1.62 billion. TOTAL OPERATING EXPENSES 854,159 2 A total of $560.43 million in selling and operating OPERATING INCOME 765,227 expenses and $293.73 million in general and OTHER INCOME AND EXPENSES AMOUNT administrative expenses, were subtracted from that OTHER INCOME $ 960 profit, leaving an operating income of $765.23 million. GAIN (LOSS) ON FINANCIAL INSTRUMENTS 5,513 3 Additional gains were added to the operating income (LOSS) GAIN ON FOREIGN CURRENCY (12,649) and losses were subtracted, including $257.64 million INTEREST EXPENSE (18,177) in income tax. INCOME BEFORE TAXES 740,874 4 By the end of the year, the company saw a net income OTHER INCOME AND EXPENSES AMOUNT of $483.23 million. INCOME TAX EXPENSE 257,642 NET INCOME $ 483,232 Financial Skills All Managers Should Have 14 The Cash Flow Statement BUSINESS INSIGHT: A cash flow statement provides a detailed picture of what happened to a business’s cash during a specified duration Cash Flow vs. Profit of time, known as an accounting period. It demonstrates an The key difference between cash flow organization’s ability to operate in the short and long term, and profit is that, while profit indicates based on how much cash is flowing into and out of it. the amount of money left over after all expenses have been paid, cash flow The Purpose of a Cash Flow Statement indicates the net flo ``` ### real estate or vehicles, and non-physical property, like - Vorschlag: `new-card-candidate` - Quelle: `managers-guide-to-finance-and-accounting.pdf` - Situation: `learning-planning` - Ähnlichste Karte: cards/41-strategic-influence-perception.md (0.03) - Tags: cash, flow, income, company, statement, positive, business, net Kernaussagen: - 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 Auszug: ```text 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 equity financing adjustments cause the cash flow from operating activities to Ideally, cash from operating income should routinely exceed differ from net income. net income. A positive cash flow speaks to a company’s Instead of organizing transactional data, like the direct financial stability and ability to grow its operations. method, the accountant starts with the net income number found in the income statement and makes adjustments to How Cash Flow Is Calculated undo the impact of the accruals made during the period. Now that you understand what comprises a cash flow Essentially, the accountant will convert net income to actual statement and why it’s important for financial analysis, here cash flow by de-accruing it through a process of identifying are two common methods used to calculate and prepare the any non-cash expenses for the period from the income operating activities section of cash flow statements. statement. The most common and consistent of these are depreciation, the reduction in the value of an asset over time, and amortization, the spreading of payments over multiple periods. Financial Skills All Managers Should Have 16 How to Interpret a Cash Flow Statement Types of Cash Flow Cash flow statements can reveal what phase a business is Cash flow is typically depicted as being positive or negative. in: whether it’s a rapidly growing startup or a mature and Here’s what those designations mean. profitable company. It can also reveal whether a com ``` ### ADJUSTMENTS TO RECONCILE NET INCOME TO CASH GENERATED BY - Vorschlag: `new-card-candidate` - Quelle: `managers-guide-to-finance-and-accounting.pdf` - Situation: `learning-planning` - Ähnlichste Karte: cards/45-public-speaking-skills.md (0.02) - Tags: cash, annual, company, year, financial, other, billion, activities Kernaussagen: - 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: Auszug: ```text ADJUSTMENTS TO RECONCILE NET INCOME TO CASH GENERATED BY March 30, 2020. OPERATING ACTIVITIES: DEPRECIATION AND AMORTIZATION 6,757 DEFERRED INCOME TAX EXPENSE 1,141 This cash flow statement tells you: OTHER 2,253 1 The company started the year with CHANGES IN OPERATING ASSETS AND LIABILITIES: ACCOUNTS RECEIVABLE, NET (2,172) approximately $10.75 billion in INVENTORIES (973) cash and equivalents. VENTOR NON-TRADE RECEIVABLES 223 OTHER CURRENT AND NON-CURRENT ASSETS 1,080 2 It brought in $53.66 billion through ACCOUNTS PAYABLE 2,340 its regular operating activities. DEFERRED REVENUE 1,459 OTHER CURRENT AND NON-CURRENT LIABILITIES 4,521 3 It spent approximately $33.77 CASH GENERATED BY OPERATING ACTIVITIES 53,666 billion in investment activities. INVESTING ACTIVITIES: AMOUNT 4 In addition to investment activities, PURCHASES OF MARKETABLE SECURITIES (148,489) it spent a further $16.38 billion in PROCEEDS FROM MATURITIES OF MARKETABLE SECURITIES 20,317 financing activities, making for a PROCEEDS FROM SALES OF MARKETABLE SECURITIES 104,130 PAYMENTS MADE IN CONNECTION WITH BUSINESS ACQUISITIONS, (496) total cash outflow of $50.15 billion. NET OF CASH ACQUIRED PAYMENTS MADE FOR ACQUISITION OF PROPERTY, PLANT, AND (8,195) 5 The company ended the year with a EQUIPMENT positive cash flow of $3.51 billion, PAYMENTS FOR ACQUISITION OF INTANGIBLE ASSETS (911) and total cash of $14.26 billion. OTHER (160) CASH USED IN INVESTING ACTIVITIES (33,774) FINANCING ACTIVITIES: AMOUNT DIVIDENDS AND DIVIDEND EQUIVALENT RIGHTS PAID (10,564) REPURCHASE OF COMMON STOCK (22,860) PROCEEDS FROM ISSUANCE OF LONG-TERM DEBT, NET 16,896 OTHER 149 CASH USED IN FINANCING ACTIVITIES (16,379) CASH AND CASH EQUIVALENTS BALANCE AT THE END OF THE YEAR AMOUNT Financial Skills ``` ### or discussions pertinent to the financial statements listed - Vorschlag: `new-card-candidate` - Quelle: `managers-guide-to-finance-and-accounting.pdf` - Situation: `learning-planning` - Ähnlichste Karte: cards/41-strategic-influence-perception.md (0.05) - Tags: financial, can, report, company, 10-k, reports, asset, interest Kernaussagen: - 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 Auszug: ```text 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 • Operational expenses compared to generated revenues financial statements. All of these insights can help you be privy to conversations • Accounting policies: This is an overview of the policies the surrounding your company’s future. company’s leadership team adhered to when preparing the annual report and financial statements. Financial Skills All Managers Should Have 19 BUSINESS INSIGHT: Annual Report vs. 10-K Report Annual reports aren’t the only documents public companies are required to publish yearly. The US Securities and Exchange Commission (SEC) requires public firms to produce a 10-K report, which informs investors of a business’s financial status before they buy or sell shares. While there’s similar data in both reports, they are separate. 10-K reports are organized per SEC guidelines and include full descriptions of a company’s fiscal activity, corporate agreements, risks, opportunities, current operations, executive compensation, and market activity. You can also find detailed discussions of operations for the year and a full analysis of the industry and marketplace. Because of this, 10-K reports are longer and denser than annual reports and have strict requirements—they must be filed with the SEC between 60 to 90 days after the end of a company’s fiscal year. If you need to review a 10-K report, you can find it on the SEC website. Reviewing and understanding these financial documents can provide you with valuable insights about your organization, such as: • Its debts and abilit ``` ### receive periodic interest payments and get back the - Vorschlag: `new-card-candidate` - Quelle: `managers-guide-to-finance-and-accounting.pdf` - Situation: `learning-planning` - Ähnlichste Karte: cards/06-smart-leaders-say-no.md (0.04) - Tags: can, roi, project, cash, investment, financial, worth, currency Kernaussagen: - 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. Auszug: ```text 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. determine its present value. • Stocks: A stock is a share of ownership in a public or private company. When you buy stock, you become a 5. Liquidity: Liquidity describes how quickly your assets can shareholder and can receive dividends—the company’s be converted into cash. Because of that, cash is the most profits—if and when they’re distributed. liquid asset. The least liquid assets are items like real estate or land, which can take weeks or months to sell. • Cash and Cash Equivalents: This refers to any asset that’s in the form of cash or can easily be converted into cash Financial Skills All Managers Should Have 21 6. Net Worth: Net worth indicates the overall state of your financial health. You can calculate net worth by subtracting what you own (your assets) from what you owe (your liabilities). 7. Time Value of Money: The time value of money is the concept that a unit of currency received today is worth more than the same unit of currency received at a future point. The further into the future, the less the unit of currency is worth. This is because of three factors: the opportunity cost of not having currency to invest, the impact of inflation, and the risk of not receiving the unit of currency in the future. “Gaining a core competency in financial analysis is really 8. Valuation: Valuation is the process of determining the current worth of an important in helping me create an asset, company, or liability. Regularly repeating the process can help ensure you’re environment w ``` ### makes sense to pursue. Anticipated ROI uses estimated - Vorschlag: `new-card-candidate` - Quelle: `managers-guide-to-finance-and-accounting.pdf` - Situation: `learning-planning` - Ähnlichste Karte: cards/05-strategy-workflow-os.md (0.03) - Tags: 100, roi, profit, revenues, project, would, net, 000 Kernaussagen: - 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 Auszug: ```text 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 to determine the range of possible outcomes. These numbers with slightly different terms: are then used to understand risk and, ultimately, decide whether an initiative should move forward. ROI = [(FINANCIAL VALUE - PROJECT COST) / PROJECT COST] X 100 Actual ROI is the true return on investment generated from a project. This number is typically calculated after a project has concluded and uses final costs and revenues to determine how much profit was made compared to what was estimated. Financial Skills All Managers Should Have 23 Calculating the ROI of a Project: An Example TEST YOUR KNOWLEDGE Imagine you have the opportunity to purchase 1,000 chocolate bars for $2 apiece. You would then sell the chocolate to a grocery store for $3 per piece. In addition to Question purchasing the chocolate, you need to pay $100 in transportation costs. Refer to the chocolate bar To decide whether this would be profitable, you would tally your total expenses and example in this section. What your total expected revenues. would the anticipated ROI be if you had the opportunity EXPECTED REVENUES = 1,000 X $3 = $3,000 to buy 1,500 chocolate bars for $3 apiece and decided TOTAL EXPENSES = (1,000 X $2) + $100 = $2,100 to sell them for $5 each? Be sure to factor in the $100 in You would then subtract the expenses from your expected revenue to determine the transportation costs. net profit. Once you’ve done your NET PROFIT = $3,000 - $2,1 ``` ### Financial Skills All Managers Should Have 25 - Vorschlag: `new-card-candidate` - Quelle: `managers-guide-to-finance-and-accounting.pdf` - Situation: `learning-planning` - Ähnlichste Karte: cards/12-team-effectiveness-conditions.md (0.10) - Tags: can, financial, organization, team, budgeting, resources, goals, budget Kernaussagen: - 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. Auszug: ```text 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. Financial Skills All Managers Should Have 25 SKILL 4: BUDGETING 2. Leverage Financial Data In addition to connecting with stakeholders, leverage existing financial data in your decision-making process. By One of the most important finance skills for managers to analyzing financial statements, you can gain insight into your master is budgeting, or the process of preparing and overseeing organization’s financial health and determine how to suitably a financial plan that estimates income and expenses over a apportion resources. defined period. “Business conditions change rapidly, and basing your current At its most basic level, a budget ensures a team or department budget on historical information can adversely impact budgets has the resources needed to achieve its goals. For managers, within other areas of an organization,” writes John Wong, HBS the budget serves as a vital tool for: Online’s senior associate director of Financial Planning and • Communicating expectations and goals to stakeholders Analysis, in an article for the Business Insights blog. • Mobilizing teams and departments around organizational 3. Work Toward Goals objectives Understanding your organization’s goals is vital to successful • Assessing group and individual performance budgeting. This k ``` ### The deliverables in your budget can serve as key milestones that inform how you - Vorschlag: `new-card-candidate` - Quelle: `managers-guide-to-finance-and-accounting.pdf` - Situation: `learning-planning` - Ähnlichste Karte: cards/05-strategy-workflow-os.md (0.07) - Tags: profit, financial, margin, can, net, profitability, ratio, revenue Kernaussagen: - 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 Auszug: ```text 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 operating in a general management being completed or incurring additional costs, be prepared to modify line item amounts position, I need to make decisions and delivery dates. utilizing the principles we learned Maintain this kind of flexibility throughout the budget management process and daily. The course empowered me to do that.” be ready to reallocate resources, when needed, to ensure your organization is well- positioned to achieve its goals. Paul Accornero 5. Communicate Progress and Results Leading with Finance Participant Clear and consistent communication is crucial when overseeing a budget. Establish a regular cadence for meeting with key stakeholders to report your employees’ contributions and results. Use data visualization techniques to illustrate your team’s progress, and make it a point to highlight any accomplishments or shortcomings that could have implications that extend beyond your direct reports. Carve out time to update your employees as well. Keeping them apprised of the impact of their work can help them feel more engaged and motivated. Budgeting is an essential management skill that can drive organizational success. With a clear understanding of your firm’s processes and goals, a well-developed plan for evaluating performance, and a knowledge of financial principles, you can make more informed decisions and ensure your team meets its targets. Financial Skills All Managers Should Have 27 SKILL 5: FINANCIAL PERFORMANCE MEASUREMENT Financial key performance indicators (KPIs) are metrics 2. Net Profit Margin used to ``` ### assets and liabilities. increases from one, demonstrating the leverage impact of the - Vorschlag: `new-card-candidate` - Quelle: `managers-guide-to-finance-and-accounting.pdf` - Situation: `learning-planning` - Ähnlichste Karte: cards/19-salary-negotiation-and-pay-transparency.md (0.04) - Tags: assets, ratio, equity, total, company, inventory, current, its Kernaussagen: - 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 Auszug: ```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 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 LEVERAGE = TOTAL ASSETS / TOTAL EQUITY 5. Quick Ratio 7. Debt-to-Equity Ratio The quick ratio, also known as an acid test ratio, is another The debt-to-equity ratio is a solvency ratio that measures how type of liquidity ratio that measures a business’s ability to much a company finances itself using equity versus debt. handle short-term obligations. The quick ratio uses only This ratio provides insight into the solvency of the business by highly liquid current assets in its numerator, such as cash, reflecting the ability of shareholder equity to cover all debt in marketable securities, and accounts receivables. The the event of a business downturn. assumption is that certain current assets, like inventory, are not necessarily easy to turn into cash. DEBT-TO-EQUITY RATIO = TOTAL DEBT / TOTAL EQUITY QUICK RATIO = (CURRENT ASSETS - INVENTORY) / CURRENT LIABILITIES 8. Inventory Turnover Inventory turnover is an efficiency ratio that measures how many times per accounting period the company sold its entire inventory. It gives insight into whether a company has excessive inventory relative to its sales levels. INVENTORY TURNOVER = COST OF GOODS SOLD / (BEGINNING INVENTORY + ENDING INVENTORY / 2) Financial Skills All Managers Should Have 29 9. Total Asset Turnover 12. Seasonality Total asset turnover is a ratio tha ``` ### Course Information Financial Accounting Leading with Finance - Vorschlag: `new-card-candidate` - Quelle: `managers-guide-to-finance-and-accounting.pdf` - Situation: `learning-planning` - Ähnlichste Karte: cards/41-strategic-influence-perception.md (0.05) - Tags: financial, want, who, business, finance, course, learn, decisions Kernaussagen: - 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 Auszug: ```text 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 courses offer. Course Information Financial Accounting Leading with Finance Faculty V.G. Narayanan Mihir Desai Course Length 8 Weeks 6 Weeks What You’ll Learn • How to prepare a balance sheet, income statement, • A toolkit for making smart financial decisions and the and cash flow statement confidence to communicate those decisions to key stakeholders • Processes for reading and analyzing financial statements to determine your company’s business • Financial analysis techniques and how capital markets work performance and potential • Ways to create and assess value to evaluate and pitch • Forecasting and valuation methods projects Who Will Benefit • Current or aspiring managers who want to understand • Early- and mid-career professionals who want to understand how their decisions impact their company’s bottom the financial landscape of their business and industry to line and improve its profitability advance their career—particularly if they’re in a non-finance role • Recent graduates interested in learning the language of business • Aspiring finance professionals who want to learn fundamental financial terms, concepts, and principles • Those considering an MBA who want to prepare for the classroom with a course HBS offers to incoming • New leaders who want to equip themselves with the skills to students create a budget, calculate ROI, and articulate the financial implications of their decisions How to Learn More Visit the Financial Accounting course page Visit the Leading with Fi ```