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. […]
One of the reasons businesses fail is a wrong estimate of how much it will cost to acquire customers. If the cost ends up too high and exceeds the monetization of the customers, the business cannot operate sustainably. It is essential to understand how much a customer will generate for the business, as knowing this […]
In one of our recent articles, we looked into how to set up and run Monte Carlo Simulations in Excel. And we looked at some of the most common probability distributions, which we can apply to illustrate the uncertainty of our model’s variables. When we work on a financial model, we face issues with variables […]
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 […]
What is Materiality The materiality of a transaction amount or a financial statement line item is determined based on the impact of a misstatement of information on the intended users of that information. If the stakeholder is most likely to alter their actions if we presented the information correctly, the mistake is considered material. And, […]
The core underlying principle of IAS 36 Impairment of Assets is that an asset’s carrying value in the financial statements of the company should not exceed the highest amount the business can recover through its use or sale. The standard applies to all assets for which there are no impairment considerations elsewhere. As an example, […]
Businesses use financial metrics to measure their performance over time. One such metric is Days Working Capital (DWC) which shows us the number of days the company takes to convert working capital into sales revenue. Many investors use DWC as a liquidity indicator to track working capital management efficiency. In this article, we explore some […]
The Labor Theory of Value was one of the early attempts to explain how market prices form. It followed the idea that the main driver for goods’ value is the labor necessary to produce them. Under the theory, the labor hours it takes workers to produce a commodity is the source of its value. The […]
When we are trying to optimize the experience for our customers, there are many metrics we can track and aim to improve. The Customer Lifetime Value (CLV) shows us how much money a customer will bring to the business on average over the entire time they remain a paying client. Whether we decide to refer […]
Explore common Excel formula errors in finance and learn effective solutions to avoid costly mistakes in your financial models.
