We are approaching the second half of the year, and before we know it, it will be the time of year to start working on our projections for next year and the company’s annual budget. There are many complex and detailed models that we can utilize to forecast the sales Read more…
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 Read more…
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, Read more…
Let’s start by looking at why businesses need rolling forecasts. When running a business, we need to have a full view of what’s happening so that we can make the proper decisions. The best way to achieve this is to implement a budgeting and planning process. We create an expected Read more…
With a reach in e-commerce, cloud computing, digital streaming, and artificial intelligence, Amazon is now one of the largest corporations in the world. Analysts often refer to it as one of the most influential economic forces in the world. Alongside Google, Microsoft, and Apple, Amazon is considered one of the Read more…
The primary purpose of any business is to produce goods or provide services in a way that they have a higher value for the customers than the original cost for the firm. Companies engage in numerous activities while converting inputs to outputs. Porter’s Value Chain helps us create a clear Read more…
Introduction Opportunity cost represents the benefits the business misses out on when picking between alternatives. When we have two desirable options, the benefit from the one not chosen is our opportunity cost. These costs are usually the result of bottlenecks in business processes. Therefore, finance professionals use Opportunity Cost analysis Read more…
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 Read more…
Introduction We perform a liquidity ratio analysis to evaluate the ability of the company to settle its obligations on time. The most common use case is when lenders and creditors want to gain a better understanding of the financial health of a borrower or customer. Analysts use the gained insights Read more…
Introduction Investors are continually evaluating different investments, trying to identify the ones that will maximize their returns and wealth. Analysts consider the Compound Annual Growth Rate (CAGR) as one of the most accurate ways to calculate the return for any investment with a value that changes over time. CAGR represents Read more…
