Business breakdown part III This is the final installment of a multi-part case study on Starbucks Corp. We previously covered the business model, profit model, unit economics, and financial statement analysis (links below). ​(Part I) Business model and unit economics​ ​(Part II) Financial st...

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: ...

You need a good set of books. Period. When working with a new client, I typically start with 2 questions: Are you consistently getting financials reports on a timely basis? Do you believe the numbers you're looking at (i.e. are they reliable)? Don't worry if you answered "no" to either qu...

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 ...

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...

Let's talk metrics One challenge in managing finances is the overwhelming amount of numbers and metrics available to look at. Scoreboards in professional sports generally display only the most relevant stats, and your business should do the same. How do we handle it? Stick to 6-7 key metrics ...

Ask 10 different finance pros what their monthly review process looks like and you'll likely get 9-10 different responses. So what is it? Monthly Financial Review (MFR) — Checklist of financial data and review procedures conducted every month (or 30 days) after your books are closed and financi...

Financial Frequencies - Zoom In / Zoom Out There are probably 30-40 skills required to be a finance/accounting pro, but to manage a successful business you really only need to master maybe 10 or so... today we'll cover one of those 10 skills... I call this zooming in and out on your business. I...

Simple approach to achieving profitability... We posted this on LinkedIn not long ago and it absolutely oversimplifies things but at its core, producing good income really does happen this way: 1) Get good bookkeeping - hire help!2) Review financials regularly - and know what they're telling yo...