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How to Spot Red Flags in an Income Statement in 7 Steps. Most people think a strong net income means a business is financially healthy. But here’s the truth: your income statement can hide serious financial red flags. Here are 7 warning signs every CEO and CFO should watch for: 1️⃣ Revenue is growing, but net income isn’t This signals rising costs, pricing pressures, or lower-margin sales—indicating an inability to scale profitably. 2️⃣ Shrinking gross margins Higher production costs, inefficient pricing, or poor cost control can erode profitability. If margins are declining, investigate further. 3️⃣ Unexplained surges in SG&A expenses A sudden spike in selling, general & administrative (SG&A) costs could mean excessive executive compensation, poor cost management, or unnecessary spending. 4️⃣ A sharp rise in interest expense Higher interest costs could indicate excessive debt, deteriorating credit ratings, or an over-reliance on borrowed capital. 5️⃣ Unusual “Other Income” gains Large non-operating income from asset sales, litigation settlements, or one-time government grants may inflate earnings but don’t reflect sustainable profits. 6️⃣ Significant variations in tax expense Big swings in tax provisions could signal aggressive tax strategies, disputes with regulators, or potential future liabilities. 7️⃣ Strong net income but weak operating cash flow If a company reports high profits but struggles to generate cash from operations, it could be relying on accounting tricks rather than true financial strength. Final Takeaway: Real financial intelligence comes from digging deeper into the numbers. Because a healthy bottom line doesn’t always mean a strong business. What do you think? ----------------------  ❌ Frustrated by Short-Sighted Financial Plans? Financiario can help.   ➡️➡️➡️➡️ Transform your strategic financial planning with long term forecasts ➡️➡️➡️ Anticipate the future with automated reports & dashboards. ➡️➡️ Align your operating plans with your financial strategy. ➡️ Solve your most critical strategic planning problems.

CEOs need Strategic Finance. But here’s the problem: Most CFOs focus on Budgets. If your finance team is just budgeting and forecasting… You’re at best tracking where you'll end up. Not engineering where you need to be. Reactive finance is holding everyone back. Let’s break it down. What Most CFO Offices Provide vs. What CEOs Actually Need For SMBs (<$50M in revenue): ↳ Controllership (compliance, reporting, closing the books) For Growing Mid-Market ($50M–$100M): ↳ Controllership + FP&A (budgeting, forecasting, variance analysis) For Large Mid-Market ($100M–$500M): ↳ Controllership + Treasury + FP&A (cash management, debt, liquidity strategy) What’s missing? 📌 Strategic finance. The expertise that ensures a business doesn’t just react to financial results— but actually engineers them. Most companies don’t reach $500M+ because they waited too long to adopt strategic finance. Here’s what Strategic Finance does differently: 1️⃣ Capital readiness—always. You should never be scrambling for capital. Strategic finance optimizes capital structure at every step, ensuring you’re 12–18 months ahead of funding needs. 2️⃣ Board-ready, lender-ready, investor-ready. Deep analysis and financial storytelling condition performance before you get in the room—not after the numbers are locked in. 3️⃣ From reactive finance to financial leadership. Instead of reporting what happened, strategic finance shapes the outcome to align with business objectives. And that’s the difference between companies that plateau… And those that scale to $500M+ without missing a beat. What do you think? ----------------------  ❌ Frustrated by Short-Sighted Financial Plans? Financiario can help.   ➡️➡️➡️➡️ Transform your strategic financial planning with long term forecasts ➡️➡️➡️ Anticipate the future with automated reports & dashboards. ➡️➡️ Align your operating plans with your financial strategy. ➡️ Solve your most critical strategic planning problems.

Accounting isn’t finance. Yet, too many CEOs treat them as the same. Here’s why that’s a costly mistake. Accounting only tells you where you’ve been. It’s finance that maps out where you’re going—and shows you how to get there. Accounting is about recording what happened. Finance is about planning what’s going to happen. Both are critical, but they serve entirely different purposes. Here’s why it matters: ↳ Accounting focuses on compliance. Taxes filed? Books closed? Great. But none of this tells you how to drive strategic growth. ↳ Finance focuses on strategy. Where should you invest? How do you improve margins? What’s the long-term roadmap for sustainable growth? Without a strong financial strategy tied to long-range planning, your accounting efforts are just data collection. What to do instead: ✓ Tie finance to strategy. Finance shouldn’t just report results—it should shape decisions. ✓ Use forward-looking tools. Cash flow forecasts, scenario planning, and financial models should guide long-term moves. ✓ Make finance the driver of business decisions. Finance should align KPIs with every department’s goals. ✓ Shift from short-term wins to long-term value. Stop celebrating last quarter’s EBITDA. Start asking how today’s investments increase enterprise value over the next decade. Here’s the takeaway: ↳ Accounting gives you hindsight. ↳ Finance gives you foresight. ↳ Accounting ensures you’re compliant. ↳ Finance ensures you’re competitive. Both are essential—but it’s finance that drives sustainable growth. If you’re not using finance to drive strategy, you’re managing your business with one eye closed. What do you think? ----------------------  ❌ Frustrated by Short-Sighted Financial Plans? Financiario can help.   ➡️➡️➡️➡️ Transform your strategic financial planning with long term forecasts ➡️➡️➡️ Anticipate the future with automated reports & dashboards. ➡️➡️ Align your operating plans with your financial strategy. ➡️ Solve your most critical strategic planning problems.

Cash flow doesn’t lie. But tracking cash flow isn’t enough. Because knowing your numbers is one thing... ↴ Knowing what to do with them is another. Cash flow cuts through the noise. It shows what’s working, what’s broken, And how long you can keep running. But real cash flow intelligence means asking the right questions— So you don’t just see the numbers, you understand the story behind them. And operating cash flow is only part of the picture. ➡️ Learn to analyze a cash flow statement in 10 steps and never miss another red flag again: https://lnkd.in/e2JXiUK6 Let’s break it down. 1️⃣ Are we generating cash from core operations? KPI: Operating Cash Flow If your business isn’t funding itself, it’s not sustainable. 2️⃣ Can we meet short-term obligations comfortably? KPI: Short-Term Liquidity Liquidity is confidence—knowing you can pay the bills without scrambling. 3️⃣ Are our assets pulling their weight? KPI: Asset Turnover Your assets should work as hard as you do. This metric measures how efficiently they generate revenue. 4️⃣ How much of our profits turn into cash? KPI: Operating Cash Flow to Net Income Revenue looks great on paper, but cash is the reality. 5️⃣ Can we fund growth without outside help? KPI: CapEx Coverage Growth demands cash. This KPI measures whether your operations can cover expansion costs. 6️⃣ How much cash is left for our investors? KPI: Free Cash Flow After Debt This shows what’s left after covering obligations—true value for stakeholders. 7️⃣ Are we managing our cash conversion efficiently? KPI: Cash Conversion Cycle Cash stuck in inventory or receivables can cripple growth. 8️⃣ Is our debt helping or hurting us? KPI: Debt-to-Cash Flow Debt fuels growth—but only if it’s manageable. 9️⃣ Are we making smart investments? KPI: Return on Invested Capital (ROIC) This tells you if your capital is driving meaningful profits. 🔟 Are we delivering shareholder value? KPI: Cash Flow Per Share (CFPS) For shareholders, this is the ultimate metric of trust and performance. The Takeaway: Cash flow KPIs don’t just measure performance. They reveal the health of your business. They tell you: 🔹 Where you’re thriving. 🔹 Where you’re exposed. 🔹 Where to focus next. But metrics mean nothing without the right questions. Start here. Make better decisions. Build a stronger business. Make 2025 your best year yet and master financial leadership ↴ ▷ Enroll in my 5 on-demand video courses: https://bit.ly/3RlTCDD and save with the bundle: https://bit.ly/4bTdu8T ▷ Join the waitlist for the April cohort of my 6-week Financial Intelligence Program: https://bit.ly/3ZCI0kr ▷ Get my popular infographics: https://bit.ly/3K2B5Jc ♻️ Like, Comment, Repost if this was helpful. And follow Oana Labes, MBA, CPA for more.

Revenue is up. Profits look good. But is your business actually financially healthy? Too many companies look strong on paper—until they crumble. Here’s how to spot the real story in 4 simple steps: 1️⃣ Analyze the Balance Sheet Why it matters: The balance sheet is where financial strength (or weakness) is exposed. It shows whether a business can survive tough times, manage debt, and fund growth. Key focus areas: ↳ Liquidity (Can the company pay its short-term obligations?) ↳ Solvency (Is it over-leveraged or financially stable?) ↳ Asset efficiency (Are assets being used effectively?) 2️⃣ Analyze the Income Statement Why it matters: Profitability isn’t just about net income—it’s about the company’s ability to generate sustainable earnings. Key focus areas: ↳ Operating leverage (How much fixed vs. variable cost risk does the business carry?) ↳ Profitability trends (Gross margin, Operating margin, Net margin) ↳ Cost structure (Is the company efficient in managing expenses?) 3️⃣ Analyze the Cash Flow Statement Why it matters: Profit is an accounting number. Cash flow is survival. A profitable business can still fail if it runs out of cash. Key focus areas: ↳ Operating cash flow (Is the company generating cash from core operations?) ↳ Investing cash flow (How much is being reinvested for growth?) ↳ Financing cash flow (Is debt being used wisely or creating financial risk?) 4️⃣ Perform a Full Ratio Analysis Why it matters: Ratios provide benchmarks and trends, helping you understand the bigger picture. Key focus areas: ↳ Profitability (Margins, ROE, ROA) ↳ Liquidity (Current ratio, quick ratio, CCC) ↳ Solvency (Debt-to-equity, debt service coverage) ↳ Efficiency (Asset turnover, inventory turnover) ✓ Final Thought: Context is Everything Numbers don’t tell the full story unless you interpret them correctly for your objectives. ↳ Identify the right financial metrics for your goals. ↳ Consider industry, size, and economic conditions. ↳ Track trends over time to guide better decision-making. What do you think? ----------------------  ❌ Frustrated by Short-Sighted Financial Plans? Financiario can help.   ➡️➡️➡️➡️ Transform your strategic financial planning with long term forecasts ➡️➡️➡️ Anticipate the future with automated reports & dashboards. ➡️➡️ Align your operating plans with your financial strategy. ➡️ Solve your most critical strategic planning problems.

Knowing your numbers is one thing.. Knowing what to do with them is another.

Profitability KPIs set the goal and measure your success. But Cost KPIs define constraints and evaluate efficiency. Your Performance depends on both. So don’t just manage Profitability. Analyze and Manage Costs. 🎯🎯🎯Here’s an invaluable Performance Checklist covering 36 Essential Profitability and Cost KPIs to choose from, monitor, analyze, and manage. ➡️➡️ Profitability Management: 1. Assess your revenue streams to identify the most lucrative ones. 2. Optimize pricing strategies to ensure maximum profit margins. 3. Diversify sources of income to spread risk. 4. Leverage high-performing assets to capitalize on profitable opportunities. 5. Analyze profitability trends to foresee potential future growth areas. 6. Reinvest profits wisely to fuel sustainable growth. 7. Benchmark against industry standards to ensure competitive positioning. ➡️ How to select Profitability KPIS: 1. Prioritize KPIs that align with your business's strategic goals. 2. Segment your profitability metrics to address different revenue streams 3. Simplify your selection to focus on key drivers rather than all possible metrics. 4. Review the selected KPIs regularly to ensure their continued relevance. ➡️➡️ Cost Management: 1. Scrutinize all expenditures to identify any wastage or redundancies. 2. Negotiate with suppliers to secure the best prices without compromising on quality. 3. Streamline processes to increase operational efficiency. 4. Monitor overheads closely to avoid unnecessary expenses. 5. Investigate any sudden spikes in costs. 6. Implement cost-saving technologies and practices. 7. Benchmark costs against industry averages to identify areas of improvement. ➡️ How to select your Cost KPIs: 1. Highlight KPIs that directly impact your bottom line. 2. Categorize cost metrics into fixed, variable, and semi-variable to target cost-saving initiatives effectively. 3. Prioritize KPIs that offer actionable insights rather than generic information. 4. Re-evaluate and adjust cost KPIs based on changing business conditions and goals. Use this Checklist to help you set up a Performance KPIs framework that works for you and your organization. What do you think? ----------------------  ❌ Frustrated by Short-Sighted Financial Plans? Financiario can help.   ➡️➡️➡️➡️ Transform your strategic financial planning with long term forecasts ➡️➡️➡️ Anticipate the future with automated reports & dashboards. ➡️➡️ Align your operating plans with your financial strategy. ➡️ Solve your most critical strategic planning problems.

CEOs want to achieve peak performance. But… → They struggle to align goals across their organizations. → They struggle to implement effective performance management systems. → They struggle to make informed decisions based on data, diverse perspectives, and risk assessments. 🎯 Here’s a 15 point checklist with 140+ check points to help CEOs overcome these challenges and achieve performance excellence: 1. Align Organizational Goals 2. Develop and Implement Effective Performance Management Systems 3. Enhance Data-Driven Decision Making 4. Create Balanced Incentive Structures 5. Foster a Culture of Continuous Improvement 6. Improve Risk Management Strategies 7. Enhance Leadership Communication Skills 8. Build Resilience and Adaptability 9. Invest in Employee Development and Succession Planning 10. Promote Ethical Leadership and Corporate Governance 11. Adopt a Global Perspective and Cultural Sensitivity 12. Focus on Personal CEO Development 13. Leverage Technology for Efficiency 14. Build Strong Stakeholder Relationships 15. Ensure Sustainability and Social Responsibility What do you think? ----------------------  ❌ Frustrated by Short-Sighted Financial Plans? Financiario can help.   ➡️➡️➡️➡️ Transform your strategic financial planning with long term forecasts ➡️➡️➡️ Anticipate the future with automated reports & dashboards. ➡️➡️ Align your operating plans with your financial strategy. ➡️ Solve your most critical strategic planning problems.

EBITDA is just Marketing. A clever way to make a business look more profitable than it really is. But here’s the reality: Even if people fall for it all the time… EBITDA isn’t cash flow. It’s not profit. And it’s definitely not reality. ↳ Download my free guide to analyzing a Cash Flow Statement in 10 simple steps and never miss a red flag again: https://lnkd.in/e2JXiUK6 So what happens when companies rely on EBITDA? Nothing but trouble ↴ 1. Businesses overestimate their financial strength. They think they have more cash than they do. Then they overspend, over hire, or take on too much debt. 2. Investors get burned. They buy into a company based on inflated EBITDA multiples—only to realize later that the actual cash flow doesn’t support the valuation. 3. CEOs make short-sighted decisions. They chase EBITDA growth instead of sustainable cash flow. And when the bills and dept repayments come due, they scramble. 4. Companies run out of cash. At the end of the day, you don’t pay salaries, suppliers, or investors with EBITDA. You pay them with real money. And when the cash runs out? The game is over. If you want the truth, stop looking at EBITDA. Focus on: ✓ Operating Cash Flow ✓ Real Free Cash Flow ✓ Return on Invested Capital (ROIC) ✓ Economic Value Added (EVA) Forget the marketing. Look at the cash flow. 📌 Make 2025 your best year yet and master financial leadership: ▷ Save 50% with The Masterclass Bundle: https://bit.ly/3RlTCDD ▷ Join the next cohort of the CEO Financial Intelligence Program: https://bit.ly/3ZCI0kr ▷ Get my viral infographics: https://bit.ly/3K2B5Jc ♻️ Like, Comment, Repost if this was helpful. And follow Oana Labes, MBA, CPA for more insights on financial leadership.

The wrong rate could cancel your project. Here are 10 strategic tips to negotiate the right rate. -------- 1// Risk vs. Reward: ➡️ Understand that a higher discount rate suggests higher risk, reducing NPV and IRR. ➡️ Tailor the rate to the project's unique risk profile. 2// Strategic Perspective: ➡️ Prioritize long-term strategic benefits that may warrant accepting a lower NPV. ➡️ Look beyond immediate financial returns. 3// Accurate Cash Flows: ➡️ Present realistic cash flow projections. ➡️ Clear and credible forecasts can mitigate the effects of a higher discount rate. 4// Cost of Capital: ➡️ Ensure the discount rate reflects your company's actual cost of capital. ➡️ Overstated rates can unfairly disadvantage good projects. 5// Opportunity Cost: ➡️ Consider what might be lost by not pursuing the project. ➡️ Sometimes, the benefits outweigh the risks suggested by a high discount rate. 6// Sensitivity Analysis: ➡️ Use this tool to show how various discount rates affect project viability. ➡️ Demonstrating robustness under different scenarios. 7// Risk-Adjusted Phases: ➡️ Propose varying discount rates for different project stages. ➡️ Align rates with the varying risk levels of each phase. 8// Historical Data Utilization: ➡️ Leverage past project data to argue for a realistic rate. ➡️ Especially relevant when previous projects have shown success. 9// Non-Financial Value: ➡️ Account for intangible benefits like brand enhancement or sustainability impacts. ➡️ These benefits don't directly figure into NPV calculations but are valuable. 10// Flexible Rate Review: ➡️ Advocate for periodic reassessments of the discount rate. ➡️ Adjust as the project advances and uncertainties diminish. What do you think? ----------------------  ❌ Frustrated by Short-Sighted Financial Plans? Financiario can help.   ➡️➡️➡️➡️ Transform your strategic financial planning with long term forecasts ➡️➡️➡️ Anticipate the future with automated reports & dashboards. ➡️➡️ Align your operating plans with your financial strategy. ➡️ Solve your most critical strategic planning problems.