Welcome to Issue #82 of The Finance Gem

Today’s Finance Gems 💎

• Excel is Dead. Long Live Excel.

• What really drives enterprise value

• Cash is not King. Cash Flow is.

Remember to take the Poll at the end of the newsletter and vote your favorite.

The Live CEO Financial Intelligence Program - 2025

Most CEOs struggle to connect strategy with the numbers that drive business value and make informed decisions that align with long-term goals. As a CPA with extensive experience helping hundreds of companies scale through strategic capital allocation strategies, I understand the transformative power of financial intelligence.

My CEO Financial Intelligence Program was designed to bridge this gap, equipping CEOs and business leaders with the tools to align financial decisions with their vision, challenge assumptions, and make smarter investment choices. Join me for an immersive and transformative 6 week live coaching program. Next cohort starts January 15th, 2025—sports are limited, apply now to secure your spot!

The Finance Gem 💎 is now available as an App on your Mobile Device

You can now enjoy The Finance Gem 💎 as a free app on your phone or tables. Simply click the email to read online and you will be prompted to save the Finance Gem App to your Home Screen. Alternatively, open the newsletter home page from your mobile device. Don’t miss a new issue or a reply to your comments again! Get it today!

Subscribe for access to the full newsletter archive

We promised that The Finance Gem would always be free to read—and it will be. However, starting this month, each new issue remains freely accessible for 30 days only.

To access to full library of issues older than 30 days and explore over 80 posts and more than 265+ breakdowns, organized by topic, you can support the newsletter by purchasing a monthly subscription here. Thank you!

Together with :

Stay up-to-date with AI

The Rundown is the most trusted AI newsletter in the world, with 800,000+ readers and exclusive interviews with AI leaders like Mark Zuckerberg.

Their expert research team spends all day learning what’s new in AI and talking with industry experts, then distills the most important developments into one free email every morning.

Plus, complete the quiz after signing up and they’ll recommend the best AI tools, guides, and courses – tailored to your needs.

Sign up to start learning.

1. Excel is Dead. Long Live Excel.

People hate Excel. But the game has changed.

Excel used to be the tool everyone relied on. And the one everyone complained about. Not anymore.

With AI LLMs (ChatGPT, Bard), Excel is evolving from a static tool into a dynamic, intelligent powerhouse. It automates, analyzes, and elevates how you work.

Here’s how to make Excel work for you — not against you:

1️⃣ Automated Financial Modeling

Forget manual inputs. Let LLMs automate your formulas and create detailed models.

Example: “Create a 5-year cash flow projection template for a retail business with seasonal trends.”

2️⃣ Advanced Data Analysis

Analyze huge datasets and spot trends in minutes.

Example: “Summarize revenue growth patterns and highlight expense spikes in the given quarterly data.”

3️⃣ Budgeting and Forecasting

Build smart budget templates based on real data in no time.

Example: “Create a budget template projecting a 10% growth in operational expenses.”

4️⃣ Expense Categorization and Reconciliation

Automate tedious sorting tasks and save hours.

Example: “Categorize these transactions into operational, administrative, and capital expenses.”

5️⃣ Automating Report Creation

Stop wasting time on formatting. Let LLMs help you build reports.

Example: “Create an executive monthly financial report template summarizing key financials and KPIs.”

6️⃣ Scenario and What-If Analysis

Run ‘what-if’ scenarios and plan for different outcomes effortlessly.

Example: “Analyze the impact of a 15% increase in material costs on net profit.”

7️⃣ Financial Statement Analysis

Simplify complex ratio calculations and explanations.

Example: “Calculate and explain the current ratio, quick ratio, and net profit margin for this data set.”

8️⃣ Error Detection and Troubleshooting

Catch and fix formula errors and inconsistencies with ease.

Example: “Check this workbook for potential errors in linked formulas and data inconsistencies.”

9️⃣ Automated Macro Generation

Create VBA macros on demand to streamline repetitive tasks.

Example: “Generate a macro that consolidates data from multiple sheets into one summary sheet.”

🔟 Executive Report Preparation

Draft executive summaries with key insights in minutes.

Example: “Prepare an executive summary with key financial metrics, trends, and a recommendation section.”

One Last Thing: Data Privacy Matters

LLMs are powerful, but remember: never paste sensitive data into them. Use LLMs for guidance or work with anonymized data to keep everything secure.

Learn to link finance with strategy with my exclusive 16-in-1 financial model.

2. What really drives enterprise value

Everywhere I look I see the same mistake.

Companies focused on revenue growth, market share, and profit margins…

But missing what truly builds enterprise value.

Why?

They’re chasing surface metrics.

Believing that these numbers alone show the strength of their business.

But here’s the hard truth:

Enterprise value doesn’t come from what’s happening outside.

It’s built by what’s happening inside—the things no one sees until it’s too late.

Here’s the problem:

Metrics like revenue and market share look good on paper, but they miss what’s under the surface.

Here’s what actually drives enterprise value:

1️⃣ Sustainable Cash Flow

Revenue is great, but without cash flow, it’s just numbers.

↳ Can your cash cover costs, fuel growth, and build resilience?

2️⃣ Operational Stability

Cash flow creates stability. But are you prepared for a downturn?

↳ Can you keep the lights on without scrambling for cash?

3️⃣ Debt Management & Financial Flexibility

A smart balance of debt and equity boosts value.

But too much debt?

↳ it quickly becomes a liability without stable cash flow to manage it.

4️⃣ Investment in Growth

Revenue shows today’s demand. But what about tomorrow?

↳ Steady cash flow lets you reinvest in new markets, products, or scaling up.

This potential for growth is what makes investors pay attention.

5️⃣ Shareholder Confidence

Cash flow isn’t just for bills; it’s for building trust.

↳ Consistent cash flow allows for dividends and buybacks, signaling strength.

This keeps shareholders happy and loyal, which strengthens value.

6️⃣ Quality of Earnings

Not all profits are equal. Investors want real, consistent earnings.

↳ Are your profits backed by cash flow or accounting tricks?

Quality earnings prove your business’s stability and build trust.

7️⃣ Free Cash Flow (FCF)

Free cash flow is the ultimate value test.

↳ What’s left after expenses shows if you can fund growth and return cash to investors.

Strong FCF makes your business a magnet for serious investors.

All this may seem like a lot, but it’s not.

And all of this is achievable.

Focus on these hidden drivers, and create a business that stands the test of time.

3. Cash is not King. Cash Flow is.

People say “Cash is King”

But here’s the truth: it's not cash that's going to build your business.

The real lifeline is Cash Flow—the continual movement of cash that shows if a business is truly thriving or slowly bleeding.

Here’s why cash flow reigns supreme:

The P&L and Balance Sheet Can't Save You.

It’s the Cash Flow Statement that shows you the real picture—the cash your business actually has to work with to achieve 4 main goals:

↳ Operating Costs

Cash flow dictates if you can pay your team, suppliers, and overhead. Profits alone won’t cover these if cash runs dry.

↳ Growth Investment

Cash flow is essential for funding expansion and capital investments. You can’t “profit” your way into growth if there’s no cash to support it.

↳ Debt Service

If you’re leveraged, consistent cash flow is a lifeline. Profits won’t mean much when it’s time to pay off those debts if cash is tight.

↳ Dividend Payments

Strong cash flow allows for sustainable dividend payments. They signal stability and strength to shareholders while building enterprise value.

So if you want real health and enterprise value growth, learn to analyze the Cash Flow Statement.

Let’s break down what to look for:

1️⃣ Solvency Does operating cash flow cover debt obligations comfortably?

2️⃣ Liquidity Is operating cash flow enough to meet current liabilities and prevent liquidity crunches?

3️⃣ Free Cash Flow (FCF) Does the business generate consistent FCF to support growth and shareholder returns?

4️⃣ Financing Flexibility Can the business pivot between debt and equity financing based on cash flow and market needs?

5️⃣ Investment Health Is there a balance between capital expenditures and operational cash flows?

6️⃣ Trends and Volatility Is there a reliable pattern in cash flows that reflects sustainable performance?

7️⃣ Quality of Earnings Are profits driven by actual cash-generating activities, or are they reliant on non-cash or one-off adjustments?

Join over 3,000 professionals: watch my Free Cash Flow Webinar here or enroll in my highly reviewed Cash Flow Masterclass here.

 Work with me to scale your business with strategic CFO reports & dashboards

Scale your business with Financiario’s CFO financial intelligence providing automated rolling CFO forecasts, live BI dashboards, dynamic financial reports, flexible scenarios, and best-in-class presentations.

Go from raw accounting data to financial intelligence in less than 1 week.

Multi-currency, multi-company, multi accounting software.

My second video masterclass is the BI course you need to step up your game

It will take you on a journey from PESTEL and SWOT to Ratio Analysis, Budgeting & Forecasting, CAPEX and even M&A valuations. Packed with 5.5+ hours of video, cases, quizzes, dynamic Excel models, countless infographics and beautiful slides. Check it out below:

POLL TIME

As always, if you have specific suggestions or feedback, or topic suggestions, simply reply to this email.

Thanks so much for reading.

Oana

Want to sponsor this and get in front of 50k+ business leaders? Get in touch.

Looking for my viral Checklists and Cheat Sheets? Purchase here.

Was this email forwarded to you? Sign up for free here.

Interested in CFO Services? Check out ours here.

Go deeper? Check out my Masterclasses.