The Finance Gem ๐Ÿ’Ž Week #40

Welcome to a New Edition of The Finance Gem ๐Ÿ’Ž

weekly strategic finance gems to accelerate your career and grow your business

This Weekโ€™s Strategic Finance Insights

  • The Financial Analysis Cheat Sheet

  • The Costing Cheat Sheet

  • 100 Finance & Accounting Acronyms Cheat Sheet

  • 100 Questions for the CFO

  • ROIC vs. ROE

Letโ€™s dive in!

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Now letโ€™s get into this weekโ€™s strategic finance insights:

The Financial Analysis Cheat Sheet

To help you make sense of past results, manage your present targets and plan future goals.

โžก๏ธโžก๏ธโžก๏ธ๐‡๐ž๐ซ๐ž ๐ข๐ฌ ๐ฐ๐ก๐š๐ญ ๐“๐ก๐ž ๐…๐ข๐ง๐š๐ง๐œ๐ข๐š๐ฅ ๐€๐ง๐š๐ฅ๐ฒ๐ฌ๐ข๐ฌ ๐‚๐ก๐ž๐š๐ญ ๐’๐ก๐ž๐ž๐ญ ๐ข๐ง๐œ๐ฅ๐ฎ๐๐ž๐ฌ:

๐ŸŽฏ The Financial Analysis Scorecard

๐ŸŽฏ Vertical Analysis

๐ŸŽฏ Horizontal Analysis

๐ŸŽฏ Sensitivity Analysis

๐ŸŽฏ Project Profitability

๐ŸŽฏ The Dupont Analysis

๐ŸŽฏ 5 EBITDA Ratios

๐ŸŽฏ 5 Cash Flow Ratios

๐ŸŽฏ Key Profitability Ratios

๐ŸŽฏ Key Liquidity Ratios

๐ŸŽฏ Key Solvency Ratios

๐ŸŽฏ Key Efficiency Ratios

Click the image to download a PDF copy.

The Costing Cheat Sheet

11 Essential Cost Areas to Manage.

Because costs will drive your break even point.

Your Breaking Even Point will drive your Net Income.

And your Net Income will drive your financial stability and growth.

โžก๏ธโžก๏ธโžก๏ธ Hereโ€™s whatโ€™s included in the Costing Cheat Sheet:

๐ŸŽฏ The Key Cost Drivers

๐ŸŽฏ Cost - Volume - Profit Analysis

๐ŸŽฏ The Overhead ABC

๐ŸŽฏ Gross Profit vs. Contribution Margin

๐ŸŽฏ 10 Types of Costs

๐ŸŽฏ 20 Cost KPIs

๐ŸŽฏ 20 Cost Analyses

๐ŸŽฏ The Weighted Average Cost of Capital

๐ŸŽฏ Margin vs Markup


๐ŸŽฏ 60 Cost Concepts

Use this Cheat Sheet to help close to these critical Cost concepts, and help improve your profitability and sustainability.

And help others to the same by sharing this valuable resource.

Click the image to download a PDF copy.

100 Finance & Accounting Acronyms Cheat Sheet.

100 Key Concepts to Manage.

Which one is new to you?

How would it benefit your career to learn it?

Hereโ€™s an essential list of 100 Finance & Accounting Acronyms to help you grow your knowledge and expand your skills.

What areas are covered?

1. Financial Statements & Reporting

2. Cash flow and working capital

3. Debt and Equity

4. Profitability and Returns

5. Asset Management

6. Costing Methods

7. Revenue Metrics

8. Securities

9. Others

Click the image to download a PDF copy.

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100 Questions for the CFO

Do you want revenue growth, maximized profit & optimal capital allocation?

Strategic finance insights for competitive advantage & market leadership?

Investor support from transparent and strategic financial management?

A future-proofed company through proactive and resilient planning?

Regulatory compliance to protect from legal and compliance risks?

Quick decision-making that allows agile and informed choices?

Strategic alignment between your business and finance goals?

Efficiency in budgeting, forecasting, and financial operations?

Robust financial risk mitigation to manage uncertainties?

Alignment between finance and operations teams?

โ˜‘๏ธ Then you need your CFO to be able to answer these critical 100 questions.

Click on the image below to download a pdf copy.


Do you know what they are, how to calculate and most importantly when (not) to use them?

ROIC (Return on Invested Capital) and ROE (Return on Equity) are widely used in financial performance analysis to assess how efficiently your company is investing in growth.

These profitability ratios are often confused because theyโ€™re as similar as they are different.

How they are similar:

โšซ Both are based on accounting numbers, making them useful in measuring a company's asset efficiency.

โšซ Both measure your company's investment efficiency based on profitability,

How theyโ€™re different:

โšซ ROE measures profitability through Net Income, ROIC measures profitability through NOPAT

โšซ ROE measures the return on just the equity invested in your business, ROIC evaluates the return earned on the total capital (attributable to equity investors and creditors) invested in your business

How to calculate them:

โšซ ROE = Net income / Shareholder's equity

โšซ ROIC = Net operating profit after taxes / (Debt + Equity - Cash)

How to use them:

โšซ ROE (vs WACC) to assess whether a firm is generating shareholder value or destroying value

โšซ ROIC if you want to compare the capability of firms to generate returns on their capital with different capital structures

What to be aware of:

โšซ ROE can be misleading for companies with huge cash balances since it does not deduct cash from the denominator in the calculation

โšซ ROIC is generally considered more useful because it includes the debt component of a firm and thus becomes insensitive to actions that can heavily impact shareholder equity

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Thanks so much for reading. See you next week.