Think You Don't Need to Know the Three-Statement Model? Think Again!
about 1 month ago • 2 min readHello there, It's Carolina here! You might think that planning software (in general) makes the three-statement model obsolete. I don't blame you. A lot of people think that way. In a sense, it's true that you won't need to build the company's three statement model if you work on a large company with a robust model already built with a planning software. But when it comes to ad hoc analysis, nothing beats the power of this classic financial tool. At the same time, you will discover the best...
READ POSTWondering how to create value in SaaS companies? Cover these 3 aspects!
2 months ago • 2 min readHello there, It's Carolina here! There’s nothing special about SaaS Business. You have heard that SaaS business have very specific metrics. You’ve also heard that SaaS businesses are like any other business, with the same financial structure and the same three financial statements. Who’s right? Both. SaaS businesses have their particularities, specific metrics, and a whole alphabet of acronyms. But so does every other business. Every type of business model is unique in its own way, with its...
READ POSTYou will finally understand what Value Creation really is!
2 months ago • 2 min readHello there, It's Carolina here! I've got a question for you! Do you know exactly how you can create value within your organization? No, no, no... not just showing to work ready to give your best! This is not a motivational question. I mean the money $$ type of value! How can we ensure that our company not only grows but thrives by making smart financial decisions? Creating value. So, how do we create this value? The key lies in ensuring that our Return on Invested Capital (ROIC) exceeds the...
READ POSTOptimum Capital Structure? Is it possible?
2 months ago • 2 min readHello there, It's Carolina here! Is there such a thing as the optimum capital structure? How are equity, tax, and debt interrelated when it comes to tax planning and funding a company? Let's start with Taxes... The Income tax schedule forecasts a company’s tax obligations. And...? And taxes are paid based on Earnings. And...? And earnings are reduced by interest but not by dividends, right? That's the point... When companies decide to exchange equity for debt, they are changing the way they...
READ POSTRevolving Debt: A Must-Have for Your Financial Toolbox
4 months ago • 1 min readHello Reader, It's Carolina here! This week, I'm focusing on the importance of having a revolving debt schedule in your financial model. It's crucial for managing your cash flow and ensuring liquidity. With the revolving debt calculation, one polemic topic comes to surface: Circular Reference. Sometimes, allowing circular references in your model is necessary to achieve the most accurate results. In these cases, using a circularity switch is the ideal solution to manage these references...
READ POSTPower Query, your time saving weapon
5 months ago • 1 min readHello Reader, It's Carolina here! I can't believe we are already in May. Time is flying. One thing we can do to get more out of our daily 24 hours is to automate repetitive tasks. Do you struggle with that, Reader? If you see yourself spending a lot of time cleaning and transforming data in excel (don't we all?) give a chance to Power Query. Power Query Automate all the boring work of cleaning and transforming data and add some power to your financial models. Read the full article. I...
READ POSTFinancial Models are always wrong
6 months ago • 1 min readHello Reader, It's Carolina here! Sorry if the subject seemed clickbait, but it's true. Well they are not wrong as in full of mistakes, but they are simply not real. And they don't intend to be. Models are always wrong. We should never forget that any model whether financial or not, is just a representation of reality. Representation ≠ Replication DO NOT TRY TO REPLICATE ACTUALS What to do instead? Read More The TACTIC Financial Model Become a certified Tactic Financial Modeler. Enrolment...
READ POSTThe best FP&A partners are those with Financial Modeling Skills. Prove me wrong!
6 months ago • 1 min readHello Reader, It's Carolina here! Do you need modeling skills to be a good FP&A business partner? You sure do! Your role as an FP&A partner is to bring financial insights to the business you are partnering with. So, FP&A without financial modeling is like talking the talk without walking the walk. The Essential Role of Modeling Skills in FP&A Business Partnerships The result from learning to build a Financial Model is not building financial Models, is to have insights. Master Financial...
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