The Finance Gem ๐Ÿ’Ž Week #23 - CEOs, CFOs, and COOs

Welcome to this week's edition of The Finance Gem ๐Ÿ’Ž where I bring you unabbreviated Linkedin insights you loved - so you can save them, and those you missed - so you can enjoy them.

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Now letโ€™s move on to this week's top strategic finance insights:

  • COO vs. CFO

  • ๐€๐œ๐œ๐จ๐ฎ๐ง๐ญ๐ข๐ง๐  VS. ๐…๐ข๐ง๐š๐ง๐œ๐ž

  • The CEO Checklist

  • Operating Leverage vs. Financial Leverage

Do you want full size, print-ready PDFs of my strategic finance infographics and cheat sheets for your personal use? Visit my store and find your favorites!


These two critical C-Suite roles have essential responsibilities in steering a company's strategic direction and operational success.

However, many companies have these roles comingled as CFO/COO, which can be confusing.

And several others struggle to delineate responsibilities between the COO and CFO roles.

Hereโ€™s how to think about them:

๐ŸŽฏ The CFO focuses on managing and strategizing the company's financial health and growth.

๐ŸŽฏ The COO focuses on managing and strategizing the company's operational efficiency and effectiveness.

๐ŸŽฏ Together they focus on balancing financial planning and operational execution to help the organization achieve its strategic objectives

The COO:

- Primarily oversees the organization's day-to-day operations

- Although involved in financial strategies and decisions, focuses mostly on managing only those financial aspects strictly related to operations

- Focuses on how money is spent in the execution of day-to-day operations and works to optimize those expenditures for efficiency and effectiveness

- Typically the second/third-in-command after the CEO and/or CFO depending on organization

- Plays a critical role in ensuring the efficient and effective allocation of resources to enable the organizational strategic objectives

- Mostly internal-facing role focused on operations, production, and departmental performance


- Responsible for managing the company's financial strategy

- Broader financial scope than COO, oversees overall financial planning, risk management, record-keeping, financial reporting, and financial data analysis

- Despite operations involvement, main focus is the financial health and fiscal strategy of the company

- Responsible for analyzing the company's financial strengths and weaknesses and implementing effective corrective actions

- Plays a critical role in aligning strategic organizational objectives with financial strategy

- Often external-facing, interfacing with investors, lenders, and other third party stakeholders

๐€๐œ๐œ๐จ๐ฎ๐ง๐ญ๐ข๐ง๐  VS. ๐…๐ข๐ง๐š๐ง๐œ๐ž

Because Finance is NOT Accounting.

Here are the best 50 posts from myself and other top ranking Linkedin Finance and Accounting Content Creators curated for you.


1. The Intro to Accounting -

2. The Accounting fundamentals -

3. The Accounting KPIs -

4. The Debits & Credits -

5. The Accounting Equation

6. The Cash vs Accrual difference -

7. The 10 Accounting basics

8. The 13 Accounting Principles

9. The Accountant Checklist

10. The Accounting Cheat Sheet

11. The Accounting Fact Sheet -

12. The Chart of Accounts -

13. The 3 Financial Statements -

14. The Profit and Loss -

15. The Sections of the Balance Sheet -

16. How to balance the balance sheet -

17. The Statement of Cash Flows -

18. The CAPEX KPIs

19. The Budget vs Actuals analysis -

20. The Management Dashboard -



1. The Difference between Finance and Accounting -

2. The Move from Accounting to Finance -

3. The Basics of Finance -

4. The Finance career paths

5. The way Finance is organized

6. The Ten Drivers of shareholder value -

7. The 3 Main Cash Flow Drivers -

8. The Financial Analysis Scorecard -

9. The 20 Management Analysis Tools -

10. The steps to build a 3 statement model -

11. The Cash Inflows and Outflows -

12. The Cash Flow Statement: Direct or Indirect -

13. The method to forecast cash flows -

14. The Cash Conversion Cycle:

15. The 5 Steps to manage your cash flow:

16. The 5 Types of Cash Flow and how to use them:

17. The difference between EBITDA and Cash Flow:

18. The 5 EBITDA Ratios to Know:

19. The 5 Alternatives to EBITDA to Know:

20. The CEO KPIs dashboard -

The CEO Checklist

Itโ€™s hard being a CEO.

Every decision impacts financial health, employee morale, and stakeholder satisfaction.

To succeed, youโ€™ll need a good CFO.

And youโ€™ll need to Master Strategic Management.

Here are 15 key areas that a CEO should focus on, to help you track your learning, your progress or your performance:

1. Vision and Strategy Development: map the companyโ€™s future, ensure alignment with strategic vision, and develop long-term goals and strategies to overcome challenges.

2. Leadership and Organizational Culture: create a positive and productive organizational culture, leading by example to inspire teams and uphold company values.

3. Financial Management: oversee the company's financial health

4. Corporate Governance: work with the board of directors to ensure adherence to the highest standards of governance, ethical conduct, and regulatory compliance

5. Risk Management: identify potential risks to the company and ensure it has systems in place to mitigate them

6. Operational Efficiency: streamline operations, improve productivity, and promote innovation

7. Talent Management: hire and develop key executives, ensuring the right people are in the right roles to effectively drive the strategic plan

8. Customer Focus: foster a customer-centric approach across all department, to understand and meet customer needs

9. Investor Relations: maintain strong relationships with investors, shareholders, and financial analysts to secure capital, support growth, and maintain market confidence

10. Brand Reputation and Image: act as the face of the company, and ensure their actions reflect positively on the brand

11. Innovation and Technology: foster a culture of innovation to gain and retain competitive advantages

12. Sustainability and Corporate Social Responsibility: balance the drive for profit with the need for ethical and sustainable operations

13. Stakeholder Management: manage relationships with various stakeholders, including employees, customers, suppliers, local communities, and regulatory bodies.

14. Mergers and Acquisitions: evaluate opportunities for growth via mergers, acquisitions, partnerships, or joint ventures, and oversee their successful execution.

15. Business Continuity and Succession Planning: develop and implement a comprehensive business continuity plan, to ensure operations continue during a crisis as well as after they change positions and are no longer CEOs.

Download a PDF copy of this checklist below.

Operating Leverage vs. Financial Leverage

You have 2 main Controls to improve Business Profitability and avoid Distress.

Many companies use them jointly to compound profitability and growth, but they can be as deadly as they are attractive.

Do you know what they are?

๐—ข๐—ฝ๐—ฒ๐—ฟ๐—ฎ๐˜๐—ถ๐—ป๐—ด ๐—Ÿ๐—ฒ๐˜ƒ๐—ฒ๐—ฟ๐—ฎ๐—ด๐—ฒ ๐—ฎ๐—ป๐—ฑ ๐—™๐—ถ๐—ป๐—ฎ๐—ป๐—ฐ๐—ถ๐—ฎ๐—น ๐—Ÿ๐—ฒ๐˜ƒ๐—ฒ๐—ฟ๐—ฎ๐—ด๐—ฒ.

They have the power to amplify the company's earnings in both directions.

๐ŸŽฏ Modest increases in revenue can greatly enhance earnings.

๐ŸŽฏ Modest drops in sales can trigger dramatic losses.

1๏ธโƒฃ ๐—ข๐—ฝ๐—ฒ๐—ฟ๐—ฎ๐˜๐—ถ๐—ป๐—ด ๐—น๐—ฒ๐˜ƒ๐—ฒ๐—ฟ๐—ฎ๐—ด๐—ฒ ๐—ถ๐˜€ ๐—ฝ๐—ฟ๐—ผ๐—ฑ๐˜‚๐—ฐ๐—ฒ๐—ฑ ๐˜๐—ต๐—ฟ๐—ผ๐˜‚๐—ด๐—ต ๐˜๐—ต๐—ฒ ๐˜‚๐˜€๐—ฒ ๐—ผ๐—ณ ๐—ณ๐—ถ๐˜…๐—ฒ๐—ฑ ๐—ผ๐—ฝ๐—ฒ๐—ฟ๐—ฎ๐˜๐—ถ๐—ป๐—ด ๐—ฒ๐˜…๐—ฝ๐—ฒ๐—ป๐˜€๐—ฒ๐˜€ (๐˜€๐˜‚๐—ฐ๐—ต ๐—ฎ๐˜€ ๐—ฟ๐—ฒ๐—ป๐˜ ๐—ผ๐—ฟ ๐—ฑ๐—ฒ๐—ฝ๐—ฟ๐—ฒ๐—ฐ๐—ถ๐—ฎ๐˜๐—ถ๐—ผ๐—ป).

๐ŸŽฏ High fixed costs >> High Operating Leverage >> Low variable costs >> High Gross Margins

๐ŸŽฏ The more fixed costs your company has, the more sales it needs to generate to cover them, which introduces significant risk in the business.

๐ŸŽฏ However, after you've covered fixed costs for the period, each new dollar of sales net of variable costs trickles straight into profit.

๐ŸŽฏ For operating leverage to be beneficial, your company must be operating above its breakeven point (sales - variable costs > fixed costs)

2๏ธโƒฃ ๐—™๐—ถ๐—ป๐—ฎ๐—ป๐—ฐ๐—ถ๐—ฎ๐—น ๐—น๐—ฒ๐˜ƒ๐—ฒ๐—ฟ๐—ฎ๐—ด๐—ฒ ๐—ถ๐˜€ ๐—ฝ๐—ฟ๐—ผ๐—ฑ๐˜‚๐—ฐ๐—ฒ๐—ฑ ๐˜๐—ต๐—ฟ๐—ผ๐˜‚๐—ด๐—ต ๐˜๐—ต๐—ฒ ๐˜‚๐˜€๐—ฒ ๐—ผ๐—ณ ๐—ฏ๐—ผ๐—ฟ๐—ฟ๐—ผ๐˜„๐—ฒ๐—ฑ ๐—ฐ๐—ฎ๐—ฝ๐—ถ๐˜๐—ฎ๐—น ๐˜„๐—ต๐—ถ๐—ฐ๐—ต ๐—ด๐—ฒ๐—ป๐—ฒ๐—ฟ๐—ฎ๐˜๐—ฒ๐˜€ ๐—ณ๐—ถ๐˜…๐—ฒ๐—ฑ ๐—ณ๐—ถ๐—ป๐—ฎ๐—ป๐—ฐ๐—ถ๐—ฎ๐—น ๐—ฐ๐—ผ๐˜€๐˜๐˜€ (๐˜€๐˜‚๐—ฐ๐—ต ๐—ฎ๐˜€ ๐—ถ๐—ป๐˜๐—ฒ๐—ฟ๐—ฒ๐˜€๐˜ ๐—ฒ๐˜…๐—ฝ๐—ฒ๐—ป๐˜€๐—ฒ).

๐ŸŽฏ Financial leverage picks up where operating leverage leaves off.

๐ŸŽฏ The higher the leverage, the higher your potential benefits (tax deductibility, lower overall cost of capital, higher potential shareholder value created) and potential risks (bankruptcy, financial distress, decreased valuation).

๐ŸŽฏ Financial Leverage is typically measured with the use of leverage ratios like Debt to Equity, Debt to Assets, or Debt to EBITDA.

๐ŸŽฏ For financial leverage to be beneficial, your return on assets must exceed the interest rate on your debt.

๐“๐จ๐ ๐ž๐ญ๐ก๐ž๐ซ, ๐Ž๐ฉ๐ž๐ซ๐š๐ญ๐ข๐ง๐  ๐‹๐ž๐ฏ๐ž๐ซ๐š๐ ๐ž ๐š๐ง๐ ๐…๐ข๐ง๐š๐ง๐œ๐ข๐š๐ฅ ๐‹๐ž๐ฏ๐ž๐ซ๐š๐ ๐ž ๐ฆ๐š๐ค๐ž ๐ฎ๐ฉ ๐ญ๐ก๐ž ๐ƒ๐ž๐ ๐ซ๐ž๐ž ๐จ๐Ÿ ๐“๐จ๐ญ๐š๐ฅ ๐‹๐ž๐ฏ๐ž๐ซ๐š๐ ๐ž.

๐ŸŽฏ During periods of economic slowdown, a high degree of leverage can greatly increase business risk and the probability of financial distress.

๐ŸŽฏ Consider:

โ˜‘๏ธpaying down debt or refinancing to reduce fixed payment obligations

โ˜‘๏ธtemporarily switching fixed expenditures to variable as appropriate for your business

Operating vs. Finance Leverage - Oana Labes, MBA, CPA

When you need help making better strategic finance decisions, here are 3 ways I can help you:

  1. Upgrade your (or your teamโ€™s) strategic finance skills with The Cash Flow Masterclass. Leverage my unique on-demand video course to improve your knowledge, elevate your decision making and accelerate your career.

  2. Enjoy full size, print-ready PDFs of my strategic finance infographics and cheat sheets for your personal use. Buy here.

  3. Apply to sponsor a future issue of The Finance Gem.

The mother of Cash and EBITDA - compliments of Nicolas Boucher

Thanks so much for reading. See you next week.