What's your financial cadence?

Business owners have a typical financial review process that goes something like this:

1. Bookkeeper or CPA sends financial statements
2. Owner stashes financials in a drawer/folder
3. Those financials are never touched

Financial statement analysis is the primary tool ...

Taking the quarterly view

It's not too late to review 2024 annual financial statements. In fact, most public companies are still reporting Q4 and full year results.

Like other business owners, I have a strong preference for monthly financial statements; but, with yearend in full swing, it felt lik...

"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 re...

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.

1. (Part I) Business model and unit economics
2. (Part II) Financial state...

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:

1. Are you consistently getting financials reports on a timely basis?
2. Do you believe the numbers you're looking at (i.e. are they reliable)?

Don't worry if you answered "no" to either quest...

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 buil...

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:

1. Buy more assets (with the intention of growing sales)
2. Pay off debt and other liabilities
3. Pay dividends to owners

Where we ...

When it comes to managing a business, there are typically 2 schools of thought with staunch defenders on each side:

1. Delegation
2. Hands-on management

(The latter is sometimes referred to as micromanagement.)

In his recent article Founder Mode, Paul Graham (founder of startup incubator, Y Combin...

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 Conversi...

Installing a Financial Operating System

We're big fans (and users) of Gino Wickman's EOS (Entrepreneurial Operating System), which outlines a useful framework for business management. I'd highly recommend if you're in need of a basic structure for meetings, people management, and setting a company ...

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 wit...