The Receivables Aging (or Ageing, if you prefer British English) report is a tool that lists all unpaid customer balances by pre-defined date ranges (buckets). It shows the relationship between open invoices and their due dates. It is the primary tool to determine overdue balances for collection. It’s useful for Read more…
Gathering data in itself is meaningless unless we can analyze it and draw powerful insights. What makes data interesting is the ability to evaluate and interpret it. Hypothesis testing refers to a term in statistics where we, as the analysts, evaluate an assumption related to a data set parameter. Based Read more…
Recently, we looked at how to Perform a One-Way Analysis of Variance in Excel. In today’s article, we will take that a step further and a look at a Two-Factor ANOVA. The Two-Way Analysis of Variance (ANOVA) is a statistical test to evaluate the difference between the means of more Read more…
Capital Expenditures, or CAPEX for short, are cash or credit payments to acquire goods or services that we capitalize in balance sheet assets. From the company’s perspective, we consider those to be an investment. Here we include all expenses that are not shown on the Income Statement and do not Read more…
Once you start delving deeper into valuation and especially in the premise of mergers and acquisitions, you notice that Enterprise Value is an essential term in this field. A company’s value consists of its owned assets, but in reality, obtaining their market value can be tedious and resource-intensive. Following the Read more…
Flux Analysis is a type of comparison technique that helps us understand the changes in a company’s financials from period to period. It is shortened from Fluctuations Analysis and is also sometimes called Horizontal Analysis. We use the method to evaluate the fluctuations in accounts over time. We usually express Read more…
The Market Value of Equity of the company, also known as Market Capitalization, is the total monetary value of the firm’s equity. We calculate it as the current stock price multiplied by the number of outstanding shares. Therefore the MVE continually changes, as these two values are quite volatile. Analysts Read more…
The Analysis of Variance (ANOVA) has many varieties, but in essence, it has the purpose of evaluating whether factors are associated with any outcome values. And factors are categorical variables we use to group the outcome variables. In this article, we will not be focusing on the underlying statistical principles Read more…
In our last article, we discussed Seasonality in Financial Modeling and Analysis. We went over an example Excel model of calculating a forecast with seasonality indexes. Today we will use regression analysis in Excel to forecast a data set with both seasonality and trend. Let’s look at the quarterly sales Read more…
Seasonality is a characteristic of time-series where the data has predictable and somewhat regular fluctuations that repeat year over year. It is safe to assume that any pattern of data changes over one-year periods represents seasonality. It is usually driven by weather or commercial seasons. We have to differentiate the Read more…
