2 Excel Templates

1) Projection of Debt Levels​​

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2) Stock Investment Analysis​​​​​​​​

​​This is my selection of company indicators when investing in the stock market. I monitor when companies publish their reports to timely track the trends of these indicators and decide whether to make additional investments or possibly sell shares. The selection of companies has been made as an example of company tracking and does not constitute investment advice.​​

​Click here to get your Excel template​

Here are 2 Infographics for Today:

1) Top 10 CF Formulas

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2) How to build WACC

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Here’s today’s “How to” guide:

How to Prepare a Perfect Executive Summary for Management​​​​

This is about interpreting what truly matters.

When preparing a summary, it’s crucial to understand the needs of the report’s end user.

Personally, I believe this is one of the most important parts of this system.

Whether the end user is a CFO, COO, or Owner, one thing is sure: they don’t have the time, patience, or willingness to go through complex reports.

That’s why the focus should be on the key aspects.

Typically, a summary is a very brief, one-page report with simple and essential data.

For instance, it should include information such as revenue, expenses, EBITDA, net income, assets, equity, cash flow, and so on.

For the selected key categories, the report should show growth compared to the previous period and how the results compare to the budget.

To give a full-year perspective, the report usually presents a full-year forecast, which combines actual results with forecasts for the remainder of the year.

From a technical point of view, here are a few instructions for creating such a report:

-Choose reporting period,

-Input actual figures, last period figures, budget and forecast column

-Create charts and visuals.

The next step is preparing highlights:

These are insights, explanations, and action plans for significant findings in the summary.

For example, regarding revenue:

  • Is revenue better than before or not? Why?
  • What is the trend, and what is causing it?
  • How are we progressing toward our goals?
  • How much do we deviate from the plan when it comes to specific segments?
  • What is the action plan to achieve the goals?

All findings in this report should be very clear and concise, with an emphasis on the main business reasons and causes of specific trends.

The focus should be on driving improvement through concrete action steps.

Here are a few examples of effective highlights:

Revenue

The actual revenue for April 2024 is $6.0 billion, surpassing the budgeted $5.5 billion and last year’s $5.2 billion.

The increase is driven by the expansion of the company’s product portfolio into new international markets and the successful launch of a premium subscription service.

Additionally, a strong performance during key seasonal sales periods boosted overall revenue.

The revenue growth shows that the company’s diversification efforts and market expansion strategy are effective.

The performance in international markets is especially promising, suggesting potential for even more robust growth in the future.

Margin

The actual margin for April 2024 is 30%, higher than the budgeted 28% and last year’s 29%.

The improvement in margin is primarily attributed to the company’s shift toward higher-margin products, as well as a decrease in raw material prices due to favorable global supply chain conditions.

By focusing on premium products and optimizing procurement, the company has been able to enhance its profitability without increasing operational costs.

This indicates a solid long-term strategy for margin improvement.

EBITDA

EBITDA for April 2024 stands at $1.85 billion, which is slightly lower than the budgeted $2.0 billion and last year’s $2.1 billion.

The decrease in EBITDA is due to temporary disruptions in the supply chain caused by global logistics challenges and increased costs related to new regulatory compliance requirements in several key markets.

While the supply chain issues have negatively impacted short-term profitability, the company is actively working on mitigating these risks through diversification of suppliers and process optimization.

The higher compliance costs are expected to be one-off and should stabilize in the coming months.

Free Cash Flow

Free cash flow for April 2024 is $500 million, exceeding the budgeted $450 million but slightly down from last year’s $550 million.

The increase over budget is mainly due to improved working capital management, including faster collections of accounts receivable and optimized inventory levels.

However, the decline from last year’s figure is due to higher capital expenditures (CapEx) related to the ongoing expansion of manufacturing facilities.

The positive free cash flow performance shows strong operational efficiency and financial discipline.

While the increase in CapEx is expected to temporarily reduce cash flow, it is a necessary investment for future capacity and growth, which should drive even stronger cash flow in the coming years.