Axile Talout, MBA’s Post

It’s fascinating to think that Microsoft’s market cap surpassed IBM’s a full 15 years before its revenue did the same. How did this happen? It boils down to a fundamental difference in how the market perceives value—and there’s a lesson here for anyone in finance or corporate strategy. In the late 1990s, Microsoft was riding high on the explosive growth of its Windows operating system and Office suite. These software products had extremely high margins and were deeply embedded in the daily operations of businesses and consumers alike. Even though IBM still had higher revenue, much of it came from lower-margin hardware and services, which the market valued less. Here’s the key: Investors bet on future growth and profitability, not just current earnings. Microsoft’s software business model was seen as scalable with lower incremental costs—every new Windows or Office license sold added directly to the bottom line with minimal additional expenses. IBM, on the other hand, was viewed as a more traditional, capital-intensive business. This disparity in business models and perceived growth potential led investors to value Microsoft much higher than IBM, even before it overtook IBM in revenue. Microsoft was seen as a company of the future, a tech leader with a business model that could generate enormous profits with high margins. For those of us in finance—whether in FP&A, corporate banking, or private equity—this is a vivid reminder of how important it is to look beyond the top line. The quality of revenue, the scalability of the business model, and the potential for future growth are what ultimately drive long-term value. 🔍 Takeaway: When evaluating a company, focus not just on the revenue it’s generating today, but on the quality of that revenue and its potential to grow profitably over time. The market rewards businesses that can do more with less and scale rapidly without a corresponding increase in costs. #Finance #CorporateStrategy #InvestmentBanking #PrivateEquity #Microsoft #IBM #ValueCreation #FPandA #MarketCap #GrowthStrategy

Today is my birthday and I get to treat myself to the Italian Dolce Vita 🇮🇹 in beautiful Palermo, but… today is not about me. It’s about the incredible people who surround me and make all the difference. Everyone has their own definition of success. For me, it starts with being grateful for what we already have and embracing the journey ahead. I’m a year older today (or maybe just a day older), and I feel happy with where I am in life and what I’ve achieved. But most of all, I’m grateful to the people who’ve made this possible. I’m grateful to the owners of #TT who believed in me—maybe even more than I believed in myself at times. Your trust has been a guiding light, and I’m fortunate to work with people whose deep human values shape every decision they make. This pushes me every single day to focus on creating value, to honor the sacrifices, risks, and hard work that built this amazing business. I’m also deeply thankful for my finance team, whose dedication fuels our mission to turn our department into a true value creation center. Your passion for what we do inspires me and makes me proud every day. And to everyone I collaborate with—inside and outside of our organization—thank you. We don’t always agree on everything, but we always work through it, and that’s where the magic happens. Finally, to my family, friends, and my two dogs 🐕 —you ground me, you lift me, and you remind me every day what truly matters. Your love and support are the foundation on which all my dreams are built. At the end of the day, happiness is all about perspective. Which one do you choose to adopt? Ciao from Palermo! 🌊🍝 #Gratitude #FinanceTeam #ValueCreation #Leadership #Success #Growth #BirthdayReflections #FPandA #CorporateStrategy

"This deal sounds too good to be true!" I remember sitting across from a young entrepreneur a few years ago, and he was buzzing with excitement. “We were offered $5 million cash, no strings attached! Isn’t that the best deal ever?” he exclaimed. I was stunned. I could hardly believe what I was hearing. If only he knew. “Have you seen The Fight Club?” I asked. “Sure,” he replied, “Great movie.” “Then you remember the first rule of Fight Club: ‘Never talk about Fight Club.’ Well, here’s the first rule of finance: Risk must always be proportional to reward.” The deal he was offered seemed too good, and that’s exactly what made it dangerous. His company had nailed the dream scenario: a nearly negative cash conversion cycle and zero debt on the balance sheet—a rarity in any industry. And yet, this fund was pushing a sub-debt product at them—high interest, high risk, and completely unnecessary given their position. I took out a piece of paper and drew the classic U-shaped graph: cost of capital on the Y-axis, proportion of debt and equity on the X-axis. “Equity,” I explained, “is the most expensive type of capital because shareholders take all the risk. Debt starts cheap but gets more expensive as you leverage up. If you don’t need to take on expensive debt, why would you?” It wasn’t just a bad deal—it was financial suicide disguised as an opportunity. He eventually walked away from the deal, and we structured something far more suited to his actual risk profile. The takeaway? Don’t be seduced by flashy offers. Always ensure the risk you’re taking on is justified by the potential reward. #FinanceStrategy #RiskManagement #PrivateEquity #InvestmentBanking #CorporateFinance #BusinessGrowth

I got a job at the top bank in the world in the most random way possible! It was July 2006, I just graduated from university with a bachelor degree in finance. I had zero network in the banking world and was wondering how to get my first job. At that point applying online was not a very common thing. Even if it was, my question was, how would I stand out? I went online, looked for the address of all major banks in the city. Then, I printed my CV, put it in an envelope and mailed it the old fashion way to all the banks in the city (yes, all of them). In one week, I got... Zero response! 😂 I was not expecting much and I was already thinking about a plan B. If the door is closed, try the window. 😉 But, when I expected it the least, I got a call from #Citibank (the #1bank in the world at that time). They asked me to come for an interview for an internship as a legal assistant in the compliance department (not what I expected, but the plan was to get a foot in the door). On the interview day, I had a chat with the head of the legal department. She made me feel very comfortable, so it went very well. Then, she did something I will never forget! 😯 At the end of the interview she said: "I would hire you right away for this position, but I would be doing you and the bank a disservice." She finished by saying: "You deserve better than this position, so I'm sending you back to HR for another round of interviews." Until today, I'm impressed by her integrity and selflessness. I did four other interviews in one day. I was exhausted! 😩 I went home and did not hear from them for what seemed to be...a century. It was probably less than a week now that I'm thinking about it. Then, I got a call from HR asking me to come for an interview with the General Manager (CCO) of Citibank. The interview was a very relaxed discussion about my background, my ambitions, and my hobbies. At the end of it, he told me: "You are hired, and you can pick any department you want to work for." I was 20 years old, but very decisive. Right away, I picked the corporate banking department. Done! You can start in 10 days. 🎉 This was exactly the job I did not know I wanted. From that moment, I never looked back. I've been blessed doing what I love. This story taught me that sometimes you just need to create your own luck and turn opportunities into gold. #CareerJourney #TakingInitiative #BankerLife #Banking #Citigroup #CorporateBanking

I’ve asked this simple question to countless FP&A candidates: “How do you analyze financial statements?” The responses often surprise me—not because of what they say, but because of what’s missing: a clear, structured thought process. Let’s face it: financial statements can be intimidating, with hundreds of lines of data demanding your attention. But finance doesn’t have to be complicated. In fact, it shouldn’t be. Here’s how I break it down into a simple, five-step framework that any finance professional can use to cut through the noise: 1 - Profitability and Drivers: Start by understanding where the company is making (or losing) money and why. 2 - Working Capital & Liquidity: Dive into the company’s ability to meet short-term obligations—cash flow is king. 3 - Debt Service Capacity: Assess whether the business can comfortably cover its debt payments, both now and in the future. 4 - Financial Structure: Look at the balance sheet—how is the company financing its operations, and what’s the risk? 5 - Refinancing Capacity: Consider the company’s ability to refinance or raise capital as needed. Think of this as checking the vital signs of a business—each step guiding you toward where to dig deeper. The key? Don’t let the data overwhelm you. Break it down, prioritize, and tackle one piece at a time. Just like a good doctor, focus on the critical indicators that matter most. Next time you're staring down a mountain of numbers, remember: simplify, structure, and execute. #Finance101 #FPandA #FinancialAnalysis #CorporateBanking #PrivateEquity #DataStrategy #InvestmentBanking #BusinessFinance #FinancialPlanning

How to solve business challenges like a consultant? This simple question filtered out many candidates during my recent FP&A interview process. A few months ago, I was hiring for an FP&A Manager position. When candidates made it to the second round of interviews, I threw this question at them: “If a company’s revenue increases over time but the gross profit margin decreases, what could be the cause?” While it seems straightforward, many candidates struggled to structure their thought process to deliver a clear, coherent answer. Some confused gross profit with gross margin, while others got lost in the weeds, throwing out random numbers instead of breaking down the problem. Here’s how I would approach this question: 1 - Understand the question: 90% of the answer lies in grasping the problem fully. 2 - Break it down: Simplify the concept into its basic components. 3 - Clarify assumptions: Don’t hesitate to ask questions to refine your understanding. For simplicity, let’s assume we’re dealing with a distribution company. Here’s how I’d dissect it: Gross Profit = Revenue - Cost of Goods Sold (COGS) Gross Profit Margin = Gross Profit / Revenue The issue could stem from either revenue or COGS. Let’s break these down: Revenue = Price x Volume COGS = Manufacturer Price x Volume Since volume cancels out on both sides, we focus on price: 1 - Price Factors: - FX rate - Product mix - Promotions and discounts - Sales channel mix 2 - COGS Factors: - Manufacturer prices - FX rate - Freight costs - Product returns (especially if scrapped) These are the main 8 reasons why there would be an increase/decrease in the GM. By following this structured approach, I ensure that I'm addressing all potential factors, minimizing the risk of overlooking something critical. #FPandA #Finance #ConsultingMindset #ProblemSolving #CFO #ECommerce #BusinessStrategy

"Why do you care so much about inventory levels?" Someone asked me this question last year. At first, I was surprised. It’s a common misconception about the role of a CFO. A CFO isn’t just a number-cruncher or a financial statement preparer. The CFO, along with the CEO, has a unique vantage point—a holistic view of the entire business. I smiled, took a deep breath, and delivered my passionate response: "Great question, and here’s why it matters so much." Inventory doesn’t immediately show up on your income statement. You could be sitting on a mountain of inventory and still appear profitable—for now. But here’s the catch: too much inventory brings hidden costs that quietly eat away at your bottom line. • Hefty warehousing fees start to pile up. • Insurance costs rise as you hold onto more inventory. • And if you’re stuck with the wrong stock, you’ll end up fire-selling it, decimating your EBITDA margin. As a CFO, my job is to constantly ask: What’s the best use of our cash? How much should we really tie up in inventory? Imagine having $5 million locked in inventory when you only need $2 million. That’s $3 million that could be reinvested, reducing interest expenses or boosting profits. What seemed like a simple question actually unveils a complex thought process. And if you're considering selling the company, inventory levels can make or break your adjusted net working capital. But that’s a story for another day. So, what balance sheet items keep you up at night? #CFO #InventoryManagement #BusinessStrategy #CashFlow #WorkingCapital #FinancialPlanning

I was on a plane 🛫 spending 14 hours going from Dubai to Montreal. So I decided to watch the movie about "Research In Motion" (the rise and fall of a Canadian tech giant). 🔥 Hot Take: BlackBerry, once the undisputed king of the smartphone jungle, plummeted to near obscurity. What went wrong? 1️⃣ Innovation Amnesia: #BlackBerry led the smartphone revolution with email and BBM, but then... they hit snooze. Enter iPhone and Android, flipping the script with touchscreens and apps. BlackBerry? Stuck in a time warp. 2️⃣ Tone-Deaf to Trends: Consumers wanted cool apps and slick interfaces. BlackBerry missed the memo, clinging to their keyboard and email like a security blanket. The world moved on to Instagram and WhatsApp, but BB stayed in the boardroom. 3️⃣ Snail-Paced Response: When BB finally woke up and smelled the coffee, it was too late. The Z10? A case of too little, too late. The market had bolted, and BlackBerry was left tying its shoelaces. The funny thing is that it's not a unique case. This happens to so many companies in different industries. As a banker, I met so many entrepreneurs in love with their company, their products, and their ideas that they were blind to the rapid changes happening around them. 🧠 So what are the lessons entrepreneurs can get from this story? 💡 Adapt or Die: The market waits for no one. Today's innovation is tomorrow's antique. Keep evolving. 💡 Listen to the Street, Not Just the Suite: Your consumers are your best innovators. Ignore them at your peril. 💡 Speed is Your Friend: In tech, time isn't just money; it's everything. React fast, pivot faster. 🚀 BlackBerry’s story isn’t just a tale of tech. It's a lesson in business survival. #BusinessStrategy #Innovation #Adaptation #Entrepreneurship #TechTales

This FP&A candidate's answer left me speechless. A few months ago, I was interviewing candidates for an FP&A manager position on my team. I’ve always approached interviews as conversations rather than interrogations—an opportunity for mutual learning. But this time, what unfolded was something I didn’t see coming. I posed a question I thought was straightforward: "You're trying to teach something to the associate in your team, and he shows no sign of interest. What would you do?" I had an answer in mind—what I considered the best answer. But his response? It completely flipped my perspective. He simply said: "Well, the first thing I’d do is ask myself: Is it really important for him to know this at this stage of his career?" I was floored. As someone who’s passionate about learning and sharing knowledge, I realized I often assume that others share the same eagerness to absorb new information. But this response made me rethink my approach. It opened my eyes to a critical insight: Not everyone is on the same path or at the same stage in their learning journey. It’s not just about what we teach, but about understanding when and why it’s relevant to the person we’re teaching. This experience was a powerful reminder: Interviews shouldn’t just be about assessing others—they can also be moments of profound learning for ourselves. #LeadershipLessons #CareerGrowth #FPandA #LearningJourney #MindsetShift

You’re running out of cash, and it’s only a matter of weeks before you hit a huge liquidity crisis, possibly even bankruptcy. This is the message I had to deliver to a CFO (let’s call him Andrew) who didn't want to face reality. The company had doubled in size over the past three years. It was still profitable, but cash was draining fast. Andrew’s face turned pale. “What do you mean we’re running out of cash? We’re still profitable,” he said. One of the biggest challenges I’ve seen is that people struggle to understand the balance sheet and cashflow statement. They look at their profit & loss (P&L) statement and think everything is fine. This company's story was a classic case of ego-driven growth. The owner focused on expanding the top line without considering the consequences. They added a few big clients over the past three years, but at the expense of their gross margin. Clients squeezed them every year, and they conceded to generous payment terms of 90 days while their suppliers demanded payment in 45 days. Want to hear something crazier? Their inventory levels skyrocketed from 60 days to 120 days. “I understand this isn’t what you wanted to hear today, but let’s do some quick math to show you the impact,” I said. - Supporting an additional 30-day worth of sales represents roughly $3 million. - An additional 60 days of inventory accounts for around $2 million. - All this while your gross margin decreased from 20% to 15%, and net profit dropped from 9% to 2%. This resulted in a negative free cash flow. Even without factoring in CAPEX, they wouldn't hit their magic number. The lesson here is that growth can be a double-edged sword. If you buy growth with discounts and reduce your margins, it could cripple the company. Here are some potential solutions to the problem this company was facing: 1. Review Profitability: Increase pricing or cut unprofitable clients. 2. Analyze Overtime: This was a manufacturing company, so production salaries were included in COGS. Investigate the cause of rising overtime costs. 3. Renegotiate Payment Terms: Shortening client payment terms can reduce operating line usage, lower interest paid, and boost net profit. 4. Supplier Negotiations: While tough, using financial instruments to make terms more attractive can positively impact cash flow. 5. Inventory Management: Reduce stock levels to essentials to lower the amount of cash tied up in working capital. 6. Capital Injection: Depending on the situation, a capital injection could support growth. These are preliminary thoughts, and there are obviously other aspects to consider. But the last thing to do is take a dividend. Depriving a growing business of cash is like depriving a growing child of food—it can harm, or even kill, the company. What about you? What balance sheet items keep you up at night? #Finance #CFO #FinancialManagement #CashFlow #BusinessStrategy #BusinessGrowth