Magnimetrics Library
Practical guides that help finance professionals turn financial data into better decisions. Explore cash flow, budgeting, forecasting, working capital, valuation, reporting, financial modeling, and downloadable examples.
This week we will take a practical look at creating a Cash Flow Forecast model. What is a Cash Flow Forecast and Why we need one The Cash Flow forecast is a crucial planning tool for financial management. It is the process of preparing an estimate of future financial performance, based on anticipated cash disbursements […]
This week we take a look at Free Cash Flow and how we can use it within a financial analysis setting. What is Free Cash Flow? The Free Cash Flow (FCF) represents the cash generated, after cash outflows to support the operating activities of the business and to maintain its capital assets. It’s a measure […]
Today we take a look at the Absorption Costing Method and how it is used to allocate cost to produced goods. Do not forget to download the Excel working file at the end of the article. What is Absorption Costing? Absorption Costing is a management accounting method for accumulating all costs associated with production in […]
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 […]
Today we are looking at how the Discounted Cash Flow (DCF) method is used to evaluate investment opportunities or project alternatives in big companies, like launching a new product, a new assembly line, etc. We can use the DCF method whenever we consider paying now to get more money (or benefits) later. Investors and Investment […]
This article builds upon the theory discussed in Creating a Variance Analysis Model – Part 1. Be sure to read this article before looking at the more practical examples below. Building a Variance Analysis Model in Excel Let’s create an Excel model to perform our variance analysis. For the exercise, we will assume a simple scenario […]
Today we will take a more detailed look at Variance Analysis. In this article, we will deal with the theory, and in next week’s article, we will build an Excel model to look more practically at the subject. Variance Analysis Variance analysis looks at the differences between planned and actual numbers. This method is used […]
It was 1912, and Donaldson Brown was working as an explosives salesman for the DuPont Corporation. About that time, the company treasurer John Raskob brought him into the financial activities of the company and encouraged him to use statistics to evaluate the business performance of the various activities under the DuPont corporation. Pierre du Pont, […]
Today we are looking at a more complex financial analysis model – the Altman Z-Score Analysis. But I promise, there’s a reward at the end of the article. The Z-score formula for predicting bankruptcy was published in 1968 by Edward Altman, Assistant Professor in the field of Finance in the New York University. In the […]
Financial Ratio Analysis is a form of Financial Statement Analysis that we use to obtain a quick view of the financial performance of a company in critical areas. Ratios can be used to compare one company against another or one period against another.  To compare different companies, we use Common Size Statements, where we express […]
