"Send me your financials." What I receive in response to this question is typically a mixed-bag. Maybe there's a different answer depending on the recipient, but I'll share my 5 favorite financial reports. These are the ones I'd want to see in order to really help someone. The 5 best financial...

Last week, we kicked off a multi-post series working through a case study, Starbucks Corp. to be precise. We covered the business model, profit model, and unit economics and today we're moving onto financial statement analysis. (Part I) Business model and unit economics (Part II) Financial st...

Continuing on the theme of financial analysis this week – we've already dug into the Monthly Financial Review and Rolling 12-Month Analysis – this week we'll work on spotting trends in our business... A recap from last week's Financial Review post – we're honing in on #3-5 from that checklist: ...

If I were to "drop in" on your business today, could you tell me how things are going this week? Most business owners don't have a formal tool or process for monitoring early warning signs (both good warnings and bad warnings). These "tools" go by many names: KPIs, scorecard, dashboard, balanced...

We're wrapping up a 3-part series (here's part I and part II) on capital allocation – the effective use of profits and cash flow – with a concept called Return on Invested Capital (ROIC). [Sometimes just called return on capital or ROC.] First, a quick reminder of our balance sheet – we buy or b...

Sources & uses of cash This is Part 2 of a series on capital allocation. A quick recap from last week: We defined the 3 uses of profits as capital allocation. They are: Buy more assets (with the intention of growing sales) Pay off debt and other liabilities Pay dividends to owners Where ...

In any business (that's any industry, any size, any product), there are generally only 3 ways to use profits: Buy more assets (with the intention of growing sales) Pay off debt and other liabilities Pay dividends to owners Most finance pros refer to this mix of profit usage as capital all...

Use visuals to spot trends and patterns There are only 3 ways to convey information: Words Pictures Numbers If we rank them from easiest-to-hardest-to-understand, then it probably goes: 1) pictures, 2) words, 3) numbers. So why are we exclusively using numbers to understand our financial...

I'm tired of seeing crummy articles about building a budget, forecast, model, etc. so I decided to create this incredibly simple yet practical guide to budgeting. [In case you didn't pick it up, I use the terms budget, forecast, and model interchangeably.] What are the steps? You likely already...

We've covered working capital a few times in the past... 101 – What is working capital​ 201 – Working capital drivers​ 301 – Optimizing & analyzing working capital​ But today we're covering probably the all-time most useful ratio when it comes to managing working capital... the Cash Conve...