Magnimetrics Library
Practical finance, Excel, valuation, and FP&A articles with downloadable working files where relevant.
Financial modeling is a critical aspect of financial analysis and decision-making. Excel has long been the go-to tool for creating robust and dynamic financial models. However, working on complex financial models can be time-consuming and challenging. In this article, we will explore 10 time-saving tips to help you streamline your financial modeling process in Excel. […]
What is fundamental analysis Previously, we discussed technical analysis to evaluate investment opportunities and spot trends that can help us predict the possible price movements of financial instruments. Fundamental analysis is another tool that investors use to arrive at a number (fair market value) that we can compare to the security’s current price, thus determining […]
Regression analysis aims to model the expected values for a dependent variable (y) based on independent variables (x). The polynomial regression is a statistical technique to fit a non-linear equation to a data set by employing polynomial functions of the independent variable. We can use the model whenever we notice a non-linear relationship between the […]
A covenant is a promise that restricts or impairs the ability of one party to act in some way. When a company raises debt, it is usually subject to conditions, restrictions, and terms known as debt (or financial) covenants. The purpose of debt covenants is to protect creditors by ensuring that borrowers act responsibly and […]
The Accounts Receivable Turnover ratio (AR T/O ratio) is an accounting measure of effectiveness. It is also known as the Debtor’s Turnover ratio, and we use it to gauge how effectively the company manages credits they extend to customers and collection. We calculate the ratio by dividing net sales over the average accounts receivable for […]
An important financial event for any organization is the month-end close process. Whether the business entity you work with is a corporation, small business, or non-profit, closing the books is universally important. This activity indicates an organization’s revenue, debt, accounts payable, and profits. For newly minted accountants, the first-ever accounting month-end close process is a […]
In today’s dynamic and uncertain business environment, startups face numerous challenges. Effective financial planning and analysis (FP&A) processes are essential for startups. FP&A helps startups create a comprehensive financial plan, analyze financial data, identify potential risks and opportunities, and make informed decisions that align with their goals. Financial modeling is another crucial tool for startups. […]
The Net Present Value (NPV) is a profitability measure we use to figure out the present value of all expected future cash flows a project or investment will generate, including the initial capital we invest. It shows us the difference between the current value of cash inflows and outflows over a period. Net Present Value […]
Introduction The Weighted Average Cost of Capital (WACC) shows a firm’s blended cost of capital across all sources, including both debt and equity. We weigh each type of financing source by its proportion of total capital and then added together. Financial analysts use WACC widely in financial modeling as the discount rate when calculating the […]
Today we will take a look at Cost-Volume-Profit (CVP) analysis and the Break-even point (BEP) in sales. Cost-Volume-Profit Analysis The Cost-Volume-Profit (CVP) analysis is a method of cost accounting. It looks at the impact of changes in production costs and sales on operating profits. Performing the CVP, we calculate the Break-even point for various sales […]
