What is EBITDA And Why It Still Matters
Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) is a way to measure how profitable a company is from its core operations, leaving out the effects of how the business is financed, taxed, or structured in the books. It’s one of the most talked-about metrics for a business, but also one of the most […]
EBITDA vs Net Income: The Real Difference
Most discussions treat EBITDA and net income as if they describe the same kind of profitability. They don’t. That simplification distorts decision-making. These measures answer different strategic questions: EBITDA tests operational momentum, while net income reflects the company’s full economic reality after capital structure, taxes, and non-core items. Read more: A Complete Guide to […]
4 Ratio Analysis Limitations You Should Know About
What are ratio analysis limitations? Ratio analysis is one of the most common ways finance teams measure company performance. It’s designed to give you a quick snapshot of liquidity, profitability, leverage, and efficiency. That’s why they show up in almost every monthly report, board pack, and variance analysis. But the problem starts when […]
Common Size Balance Sheet: A Complete Guide
The idea behind a common size balance sheet is simple. Instead of looking at raw numbers, you show each item (inventory, receivables, or fixed assets), as a percentage of total assets. This makes it much easier to compare different business units, subsidiaries, or even the same company over time. For example, one unit might […]
Line Items Explained
Every day finance teams make use of line items throughout their work on invoices and P&Ls and budget spreadsheets. However, many people fail to maximize their use of this feature. The combination of properly organized line items converts basic data points into important business choices. This paper explains the meaning of line items and their importance beyond bill processing as well as their application for improved business planning and reporting. Read Scenario Planning: […]
Net Working Capital Explained: Formula, Examples & Why It Matters
Net working capital is one of the simplest ways to check if your business is financially healthy. But too many companies overlook it. If you don’t know whether you can cover your short-term bills or invest in potential opportunities, you might be setting yourself up for trouble. Read: A Complete Guide to Financial Statement […]
What Is Budget vs Actual
Let’s face it – there’s hardly a financial plan that survives first contact with reality. And budget vs actual is where those plans get tested in the real world. The whole story is actually really simple: compare what you had planned to spend or earn with what actually happened. But the insights it provides? […]
What Is Margin Analysis and How to Conduct It Step by Step
Margin analysis helps you determine how much of your revenue turns into profit – and where you might be losing money. It plays a crucial role in profitability analysis, providing insights into inefficiencies that can impact overall financial health. Read: A Complete Guide to Financial Statement Analysis for Strategy Makers This guide will […]
Accounts Receivable – The Ultimate Guide
Accounts receivable is about the survival of your business. No two ways about it. Cash flow problems almost always start here. Every unpaid invoice is like a hole in your ship, slowly sinking your ability to pay suppliers, invest in growth, or even meet payroll. Read: A Complete Guide to Financial Statement Analysis for […]
What Is the Cash Conversion Cycle Formula + Examples
For many businesses, the problem isn’t how much money is coming in – it’s how long it takes to get there. The Cash Conversion Cycle formula (CCC) helps you spot where your money gets stuck – like when inventory takes too long to sell or customers delay their payments. CCC is a liquidity signal that […]