Your Business Needs a Flux Analysis

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 such changes in both monetary […]

Understand the Market Value of Equity

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 mostly use the Market Value […]

Seasonality and Trend Forecast with Regression in Excel

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 revenue of the electronic cameras […]

Introduction to Seasonality in Financial Analysis and Modeling

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 term from cyclical data, as […]

Forecast Sales Performance and Seasonality

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 performance of the business for […]

Quick Ratio in Financial Analysis and Modeling

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 to set credit terms and […]

Economic Value Added (EVA) Case Study: Nestlé S.A.

If you haven’t read the article on the Economic Value Added (EVA) metric, please, take a look here, before you read on. Introduction In today’s post, we are doing a short case study, trying to calculate the Economic Value Added (EVA) for Nestlé for FY 2018, using actual data available in the public domain. Nestlé […]

Breaking down the Economic Value Added (EVA) Calculation

Introduction to the Economic Value Added (EVA) The EVA (Economic Value Added) is an indicator of profitability and a measure of financial performance, based on residual wealth. It is the excess profit above the cost of capital, generated by the business, adjusted for taxes, and presented on a cash basis. The consulting firm Stern Value […]