Long Term Mindset

Demystifying Transfer Pricing. Credit post: Bojan Radojicic - give him a follow! All essential Transfer pricing facts and insights in one place. Let’s your TP knowledge begin here. 🚀 𝗛𝗲𝗹𝗽 𝗺𝗲 𝘀𝗵𝗮𝗿𝗲 𝘁𝗵𝗶𝘀 𝗲𝘀𝘀𝗲𝗻𝘁𝗶𝗮𝗹 𝗶𝗻𝘀𝗶𝗴𝗵𝘁𝘀 𝘄𝗶𝘁𝗵 𝘁𝗵𝗶𝘀 𝗙𝗥𝗘𝗘 𝗖𝗵𝗲𝗮𝘁 𝗦𝗵𝗲𝗲𝘁. 🧿 𝗛𝗲𝗿𝗲 𝗶𝘀 𝘄𝗵𝗮𝘁 𝘁𝗵𝗲 𝗧𝗿𝗮𝗻𝘀𝗳𝗲𝗿 𝗣𝗿𝗶𝗰𝗶𝗻𝗴 𝗖𝗵𝗲𝗮𝘁 𝗦𝗵𝗲𝗲𝘁 𝗜𝗻𝗰𝗹𝘂𝗱𝗲𝘀: ▶️ Related parties’ determination ▶️ Local TP file content ▶️ Master TP file content ▶️ Arm’s length principle explained ▶️ Example of related parties’ transaction list and table ▶️ TP value chain ▶️ Comparability factors ▶️ TP risk indicators by OECD ▶️ Functional analysis example ▶️ Comparability analysis example ▶️ TP methods list ▶️ TP methods explained ▶️ List of criterion for application and selection appropriate method ▶️ TP databases ▶️ TP & Statistics ▶️ Interquartile range and median calculator example ▶️ How to apply database filter ▶️ 14Steps to perform TP benchmarking analysis ▶️ Profit level indicators and formulas Follow Long Term Mindset for more content like this. *** P.S. Want to master the basics of accounting (for free)? I created a 5-day, email-based course that explains the Balance Sheet, Income Statement, and Cash Flow Statement in plain English. Check it out here (It's free) → https://lnkd.in/eKbRV7g6 If you found this post useful, please repost ♻️ to share with your audience

How to read an Income Statement: The Income Statement shows a company's profitability at multiple levels over a period of time using ACCRUAL ACCOUNTING. 👉 PURPOSE: Track Income & Expenses 🔀 SIMILAR TO: Your Monthly Budget ⏰ TIME: Period of Time 🔢 ACCOUNTING: Accrual ⏩ STARTS WITH: Revenue Main sections: 💰 REVENUE: Total Sales ➖ COST OF GOODS SOLD: The cost to deliver the product or service 💰 GROSS PROFIT: Revenue - Cost of Goods Sold ➖ OPERATING EXPENSES: All Overhead Costs 💰 OPERATING INCOME: Gross Profit - Operating Expenses ➖ OTHER INCOME: Money earned that is not core to the business 💰 PRE-TAX INCOME: Operating Income - Other Income ➖ INCOME TAX: Taxes paid to Governments 💰 NET INCOME: Pre-Tax Income - Income Tax 🔢 SHARES OUTSTANDING: The total number of shares a company has ➗ EARNINGS PER SHARE: Net Income / Shares Outstanding While this is the "standard" layout for income statements, management teams have discretion over the terms & layout of the income statement. *** ➕ Follow Long Term Mindset for more content like this. Want to master the basics of accounting (for free)? Enroll in our email-based course: Financial Statements School Get started here (It's free) → https://lnkd.in/eKbRV7g6 If this post was helpful, repost it ♻️ to share with your audience.

10 Crucial Investing Ratios by Pieter Slegers - Give him a follow! 1️⃣ Gross margin (GM) 🎯 What? Company's gross profit compared to its revenue 💡 Formula? Sales - COGS / Sales 2️⃣ EBIT Margin 🎯What? What percentage of sales remains as profit before tax and interest 💡 Formula? EBIT / Sales 3️⃣ Debt-to-Assets 🎯What? The total amount of debt a company has relative to its assets 💡 Formula? Debt / Assets 4️⃣ Debt-to-Equity 🎯What? Ratio used to calculate a company's financial leverage 💡Formula? Debt / Equity 5️⃣ CAPEX/Sales 🎯What? Measures the capital intensity of a company 💡 Formula? Capital Expenditures / Sales 6️⃣ Return On Equity (ROE) 🎯What? Indicates how profitable a company is in relation to its equity 💡 Formula? Net Income / Equity 7️⃣ Return On Invested Capital (ROIC) 🎯What? Shows you how efficiently a company is allocating capital 💡 Formula? NOPAT / Total Inv. Capital 8️⃣ Earnings Per Share (EPS) 🎯What? How much money a company makes for each share outstanding 💡 Formula? Net Income / Shares Outstanding 9️⃣ Free Cash Flow Realization 🎯What? Measures how much earnings are translated into free cash flow 💡 Formula? Free Cash Flow / Net Income 🔟 Price-to-Earnings Ratio (P/E) 🎯What? Ratio that compares a company's share price to its earnings per share 💡Formula? Price Per Share / Earnings Per Share Follow Long Term Mindset for more content like this. *** P.S. Want to master the basics of accounting (for free)? I created a 5-day, email-based course that explains the Balance Sheet, Income Statement, and Cash Flow Statement in plain English. Check it out here (It's free) → https://lnkd.in/eKbRV7g6 If you found this post useful, please repost ♻️ to share with your audience

10 Ways To Measure Profit Not all profit is created equally.... Here are 10 different ways to measure how much profit a company is generating: 1: Gross Profit: Explanation: Profit after subtracting the cost to produce the product / service Financial Statement: Income Statement Formula: Revenue - COGS 2: Operating Profit: Explanation: Profits generated from running the business Financial Statement: Income Statement Formula: Gross Profit - Operating Expenses 3: Pre-Tax Profit: Explanation: Total profits before taxes are deducted Financial Statement: Income Statement Formula: Operating Profit ± Non-Operating Income/Expenses 4: Net Profit: Explanation: Final profit after deducting all expenses, including taxes Financial Statement: Income Statement Formula: Pre-Tax Profit - Taxes 5: EBITDA : Explanation: Earnings Before Interest, Taxes, Depreciation, and Amortization Financial Statement: Income Statement Formula: Operating Profit + Depreciation + Amortization 6: EBIT (Earnings before interest and taxes): Explanation: A measure of operating performance. Financial Statement: Income Statement Formula: Net Profit + Taxes + Interest Expense 7: Free Cash Flow (FCF): Explanation: Cash generated by the business after accounting for capital expenditures. Financial Statement: Cash Flow Statement Formula: Operating Cash Flow - Capital Expenditures 8: NOPAT (Net Operating Profit After Tax): Explanation: Operating profit adjusted for taxes, reflecting the profitability of core operations. Financial Statement: Income Statement Formula: Operating Profit × (1 - Tax Rate) 9: CFFO (Cash Flow From Operations): Explanation: Cash generated by regular business operations. Financial Statement: Cash Flow Statement Formula: Net Income + Non-Cash Expenses ± Changes in Working Capital 10: Owner's Earnings: Explanation: Warren Buffett's measure of a company's ability to generate cash. Financial Statement: Income Statement & Cash Flow Statement Formula: Net Income + Depreciation, Depletion, Amortization - Capital Expenditures - Additional Working Capital Which is your favorite? *** ➕ Follow Long Term Mindset for more content like this. Want to master the basics of accounting (for free)? Enroll in our email-based course: Financial Statements School Get started here (It's free) → https://lnkd.in/eKbRV7g6 If this post was helpful, repost it ♻️ to share with your audience.

Your goal is to become a CFO? This post is for you. Full credit to Nicolas Boucher - Give him a follow! 1️⃣ First, you need to understand that there are many types of CFO: - CFO of a listed company: focus will be to manage the shareholders and launch strategic plans within the group. - - CFO of a division: the role here is to drive the performance of the business and make sure you apply the group strategy. - - CFO of a medium size company: the tasks are more diverse within finance (accounting, tax, treasury, compliance, analysis, M&A), and the role can sometimes be extended to an additional function like operations or human resources. - - CFO of a small company: here the role is more hands on and the CFO needs to master the doing of many topics as the team is smaller and there are less experts. - - CFO of a start-up: the main goal will be to help finance the growth through external shareholders or banks. On the operational side, the CFO of a start-up needs to focus on implementing tools and processes which can scale with the growth. 2️⃣ Which skills you need to become a CFO? - Leadership You will be a leader in the company and you need to inspire the people. - Business partnering You need to work hand in hand with the other departments to bring value to the company. - Technical skills Depending on the role (see above) you need more or less deep knowledge in accounting, corporate finance, FP&A, tax, treasury, and systems. However, you always need to demonstrate that your understanding covers all the topics. And when you don’t have deep knowledge in a given area, you need to bring internal or external resources to help you make the right decisions. 3️⃣ Experience - You need a proven track record of where you have demonstrated the skills listed above. - You can acquire the experience by navigating between technical and analytical jobs, which gives you a broader profile. - To help you in your career, make sure that you always have one job which was close to operations. That helps with building business acumen. - Start with a smaller team and get more and more responsibilities along your career and get diverse roles to build breadth and depth in your skills. Follow Long Term Mindset for more content like this. *** P.S. Want to master the basics of accounting (for free)? I created a 5-day, email-based course that explains the Balance Sheet, Income Statement, and Cash Flow Statement in plain English. Check it out here (It's free) → https://lnkd.in/eKbRV7g6 If you found this post useful, please repost ♻️ to share with your audience

Cash Flow Statement Yellow Flags 🇳🇺 Watch out for these 8 warning signs when analyzing the Cash Flow Statement: 1️⃣ NEGATIVE NET INCOME 🇳🇺 → Rule of Thumb: Net income should be positive, especially for mature businesses. If it's a negative number, there better be a good reason. 2️⃣ STOCK-BASED COMPENSATION > 10% OF NET INCOME 🇳🇺 → Formula: Stock-Based Compensation Expense / Net Income → Rule of Thumb: Stock-based compensation dilutes shareholders. If a company is mature, it should spend less than 10% of its net income on stock-based compensation. If it exceeds this number, investigate! 3️⃣ OPERATING CASH FLOW < NET INCOME 🇳🇺 → Rule of Thumb: Operating cash flow should always exceed net income. If operating cash flow is consistently below net income, investigate! 4️⃣ FREE CASH FLOW < NET INCOME 🇳🇺 → Rule of Thumb: Strong companies produce more free cash flow than net income. If free cash flow is consistently below net income, investigate! 5️⃣ CAPITAL EXPENDITURES > 25% OF NET INCOME 🇳🇺 → Formula: CAPEX / Net Income → Rule of Thumb: If a company consistently spends more than 25% of its net income on CAPEX then it is a capital-heavy business. 6️⃣ EXCESSIVE DEBT ISSUANCE 🇳🇺 → Rule of Thumb: Strong companies do not need to use debt to grow. If a company is issuing a lot of debt, investigate! 7️⃣ EXCESSIVE STOCK ISSUANCE 🇳🇺 → Rule of Thumb: Once a company is beyond the self-funding phase, it shouldn't need to issue a lot of equity. If it is, investigate! 8️⃣ CASH BALANCE DECLINING 🇳🇺 → Rule of Thumb: Good companies produce so much cash that they can fund growth, reward shareholders, and still produce excess cash. If the cash balance is declining, investigate! IMPORTANT: I labeled these as "Yellow" flags for a reason. Lots of companies have GOOD REASONS to violate these "rules." The point is that if you see one of these yellow flags, you should investigate further. Accounting is filled with nuance. What Yellow Flags 🇳🇺 did I miss? Let me know below! *** ➕ Follow Long Term Mindset for more content like this. Want to master the basics of accounting (for free)? Enroll in our email-based course: Financial Statements School Get started here (It's free) → https://lnkd.in/eKbRV7g6 If this post was helpful, repost it ♻️ to share with your audience.

The 4-Hour Work Week book by: Tim Ferriss Post credit goes to Karina Viola Stolz - follow her! Follow Long Term Mindset for more content like this. *** P.S. Want to master the basics of accounting (for free)? I created a 5-day, email-based course that explains the Balance Sheet, Income Statement, and Cash Flow Statement in plain English. Check it out here (It's free) → https://lnkd.in/eKbRV7g6 If you found this post useful, please repost ♻️ to share with your audience

Mutual Funds VS Index Funds VS Individual Stocks. Which is the "best" way to invest in the stock market? Here are the pros and cons of each: 📜 MUTUAL FUNDS THE GOOD: ✅ Diversified ✅ Professionally managed ✅ Opportunity to outperform THE BAD: ❌ High cost ❌ Tax inefficient ❌ Most underperform the market 📜 INDEX FUNDS THE GOOD: ✅ Diversified ✅ Low cost ✅ Tax efficient ✅ Time efficient ✅ Outperform most mutual Funds THE BAD: ❌ No chance to outperform the market ❌ Not professionally managed 📜 INDIVIDUAL STOCKS THE GOOD: ✅ Low cost ✅ Maximum Control ✅ Tax efficient ✅ Opportunity to outperform THE BAD: ❌ Time intensive ❌ High volatility ❌ Not professionally managed ❌ Hard to outperform Personally, I use index funds & individual stocks. My retirement funds are all in index funds for simplicity. My taxable funds are all in individual stocks. That's because I love THE PROCESS of investing. 99% of individual investors should invest in index funds and call it a day. How do you invest? Let me know below! *** ➕ Follow Long Term Mindset for more content like this. Want to master the basics of accounting (for free)? Enroll in our email-based course: Financial Statements School Get started here (It's free) → https://lnkd.in/eKbRV7g6 If this post was helpful, repost it ♻️ to share with your audience.

How to avoid burnout Post credit: Ben Meer Get 7 types of rest: Have you ever slept 8+ hours but still felt EXHAUSTED? Me too. While sleeping is physical rest, you actually need 7 types of rest to avoid burnout (according to Dr. Saundra Dalton-Smith). So stay at your best with these 7 types of rest… — 1. Physical Rest Lack of sleep and overtraining deplete your body's energy. Get two types of physical rest, passive and active: Passive • Sleep 7+ hrs nightly • Take power naps (as needed) Active • Stretch • Get a massage • Use an ergonomic chair + desk — 2. Mental Rest Mental rest deficit is caused by overtaxing your thinking. • Write down your to-dos • Reference checklists (packing, groceries, etc.) • Create a shutdown ritual to separate work and life • Take a break from problem-solving • Meditate — 3. Social Rest Evaluate your relationships. • Spend more time with people who give you energy • Spend less time with people who steal your energy • If you're an introvert, block out time to be alone — 4. Spiritual Rest Be part of something bigger than yourself. • Volunteer • Work a job that feels purpose-driven • Participate in faith-based activities (if aligned to your belief system) — 5. Sensory Rest The modern individual is overstimulated. • Take a break from social media • Turn off notifications (sounds and visual alerts) • Limit video meetings • Set a relaxing evening ambiance (soothing music, candles, etc.) — 6. Emotional Rest Emotional rest deficit occurs when you feel like you can't be authentic. Ex: An airline attendant who must always smile, despite rude passengers. • Spend time with people you can be authentic around • Try speaking with a therapist to release emotional labor — 7. Creative Rest Appreciate beauty in any form, whether natural or human-created: Natural • Take in a sunrise or sunset • Go for a walk in nature Human-created • Visit a museum or art festival • Engage with inspiring music, books, documentaries, etc.    Follow Long Term Mindset for more content like this. *** P.S. Want to master the basics of accounting (for free)? I created a 5-day, email-based course that explains the Balance Sheet, Income Statement, and Cash Flow Statement in plain English. Check it out here (It's free) → https://lnkd.in/eKbRV7g6 If you found this post useful, please repost ♻️ to share with your audience

What is CAPEX? CAPEX is short for "Capital Expenditures." 🔹 CAPEX refers to investments in assets with a useful life of more than 1 year. 🔹 It's money spent on acquiring or upgrading long-term fixed assets, which will either boost business capacity or efficiency. CAPEX SYNONYMS: - Plant, Property, and Equipment (PP&E) - Capital Investments - Fixed Assets - Infrastructure Spending - Facilities Capital CAPEX SPENDING CATEGORIES: 🏢 Property: Office buildings, land, retail stores. 🏭 Plant: Manufacturing facility, equipment. 💻 Equipment: Vehicles, computers, technology. ACCOUNTING: 📈 CAPEX is capitalized, meaning it is depreciated over the asset's life. 💼 CAPEX accumulates on the Balance Sheet as Fixed Assets. 💰 Depreciation is expensed on the income statement. ANALYZING CAPEX: 📊 High CAPEX signals expansion or modernization. 📉 Low CAPEX suggests optimization for cash flow. FUNDING SOURCES: 💵 Cash reserves 💼 Raising capital (debt or equity) 💸 Reinvesting earnings CASH FLOW IMPACT: 💡 Large CAPEX spending can lead to significant cash outflows, impacting free cash flow. *** ➕ Follow Long Term Mindset for more content like this. Want to master the basics of accounting (for free)? Enroll in our email-based course: Financial Statements School Get started here (It's free) → https://lnkd.in/eKbRV7g6 If this post was helpful, repost it ♻️ to share with your audience.