Financial Management
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Financial due diligence in acquisitions: what to examine
The purchase price is shaped by what financial due diligence uncovers. How to analyse sustainable earnings, net debt and working capital.
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How to analyse an outsourcing decision
An outsourcing decision is more than a unit price comparison. How to weigh avoidable costs, transition risks and control together.
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What does a CFO do? Role, responsibilities and how it differs from a controller
The CFO is the senior executive responsible not only for accounting and reporting but for financing, cash, risk, control and strategy. A detailed look at the role and how it differs from the controller.
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Why do profitable companies run out of cash?
The income statement describes how the period went; the bank account shows when that performance turned into money. The gap between the two is where growing companies most often go wrong.
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Is the CFO’s job to prepare reports, or to build the decision system?
Reports are the most visible output of the finance function. Its real value lies in the structure that determines with what information, in what order and with what discipline management decides.
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What is a fractional CFO, and which companies need one?
A fractional CFO gives a company CFO-level financial management without a full-time hire. The value of the model is not the hours spent but the system that stays in the company afterwards.
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8 signs your company needs a CFO
The need for a CFO rarely shows up as a missing job title. It shows up as unanswered questions. When several of these signs appear together, the finance function needs to move from record-keeping to decision support.
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How do you build the finance function in a growing company?
A finance function does not mature on its own as a company grows. Recording, control, reporting and planning have to be built in the right order; otherwise every new report inherits the errors of the last.
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What is a 13-week cash flow forecast, and how do you build one?
A 13-week cash flow shows the next quarter’s collections and payments week by week. Its value lies not in getting the forecast right but in comparing it with actuals every week and updating it.
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How do you manage working capital? The receivables, inventory and payables cycle
Working capital is where profit waits before it becomes cash. A few days’ change in receivable, inventory or payable periods can create a serious cash need in a growing company.
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What are the early-warning signs of a cash squeeze?
A cash crisis often looks sudden, but its signs are in the data weeks or even months earlier. A company that tracks them regularly sees the squeeze early enough to manage it.
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What is debt restructuring, and when does it come up?
Debt restructuring is renegotiating the maturity, interest, collateral or amount of existing debt to match a company’s real capacity to pay. Its success depends on the quality of the financial analysis done before the negotiation.
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How do you measure debt service capacity? DSCR and net debt/EBITDA
How much debt a company can carry depends less on the amount on its balance sheet than on how quickly, and how comfortably, the cash its business generates can repay it.
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Restructuring or liquidation? How do you compare them?
For a company in difficulty, the real question is whether carrying on or selling the assets to repay debt leaves more value for creditors and shareholders. It can only be answered by comparing both scenarios on the same assumptions.
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How do you prepare the financial plan for a concordat application?
A concordat is a financial commitment as much as a legal process. The plan’s credibility depends on a complete debt inventory, a cash projection that supports the payment schedule and a clear comparison with bankruptcy.
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How do you prepare an operational turnaround plan?
A turnaround plan is the roadmap a company follows to fix deteriorating profitability and cash generation for good. A good plan starts with diagnosis, focuses on a small number of measurable actions and is tracked weekly.
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How do you calculate the total cost of an employee?
An employee costs the company more than the gross salary on the payslip, and there is a clear gap between that and the net pay the employee receives. Headcount plans and budgets should be built on a calculation that understands all three numbers.