Marjanul Islam’s Post

🔍 Why Operating Margins Matter for Businesses Operating margins are a key metric for evaluating the financial health and long-term sustainability of a business. They help investors and analysts dig deeper into the company's ability to generate profits from its core operations. #finance #investmentbanking #linkedin

What are retained earnings and why do they matter? Retained earnings represent the profits your business has kept over time instead of distributing to owners or shareholders. Here’s why understanding retained earnings is valuable: 1. Fund growth: Retained earnings allow you to reinvest in your business, covering expenses like new equipment, marketing, or expanding operations. 2. Improve financial stability: Keeping earnings within the business builds financial reserves, helping your company weather tough times without taking on debt. 3. Attract investors: Investors often view healthy retained earnings as a sign of stability and growth potential. 4. Measure performance over time: Retained earnings provide a long-term picture of your business’s financial health, showing how much profit has been reinvested back into the business. Tip: Review your retained earnings regularly to see how much profit is available for reinvestment or growth. Do you reinvest your profits back into your business? #RetainedEarnings #Bookkeeping #BusinessGrowth #SmallBusinessFinance #FinancialStability #Reinvestment

🤔What is the concept of EBITDA and its significance in determining the earnings potential of a business? Here’s what I break down in this video: 1️⃣ Understanding EBITDA: EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a crucial metric used to assess a company's profitability and cash flow generation potential. By looking at EBITDA, investors can get a clearer picture of how much cash a business can generate (it’s not perfect, but it’s a good start). 2️⃣ Adding Back Non-Cash Expenses: When calculating EBITDA, it's essential to add back non-cash expenses like depreciation and amortization, as well as interest and tax payments. By doing so, we can focus on the operating income and free cash flow of the business without being influenced by the company's capital structure or debt levels. 3️⃣ Calculating EBITDA: The easiest way to calculate EBITDA is to start with the company's Profit & Loss statement and add back those key line items such as interest, depreciation, and taxes. This will give you a rough estimate of the company's EBITDA and help you understand its earnings potential. Ultimately, EBITDA provides a way to assess a company's financial performance without being influenced by its capital structure or debt levels. Want to know more about utilizing this information? Leave a question in the comments and let’s discuss it!  #businessmotivation #investingtips #investinghacks #7figurebusinessowner #EBITDA

Income statement is a an illustrative and an easy understandable repot that  testifies: ·      Whether a chosen business concept is  financially efficient or not; ·      Business progress and its performance. ·      What makes profit lost and how to optimize expenditures; ·      To compare business with industry benchmarks; ·      Serves as a  reference to make an investment decision. P&L report is a source  to compute margin rates and  dividend  #finance #income #profit #P&L #investmentdecision

💡 Ever Wonder What EBITDA Means? 💡 If you're running a business or analyzing companies, you’ve probably heard of EBITDA. But what exactly is it, and why does it matter? EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It's a fancy way of measuring how well a company makes money from its core operations—without getting bogged down by things like taxes, loan payments, or asset wear and tear. Why is it important? 📊 It helps you understand a company’s real performance. 🔍 It allows for easy comparisons between companies, even if they’re in different industries or have different financing. 💼 Investors use it to gauge a company’s profitability and value. But remember, EBITDA isn’t everything! It doesn’t account for things like capital investments or cash flow. Use it as a tool, not the full story. #finance #businessstrategy #EBITDAexplained #financialliteracy #investmentinsights #businesstips

Dealing with financial constraints affecting your cash flow? Many successful businesses encounter challenges in various situations. We comprehend the factors contributing to this issue and offer tailored solutions to assist you in navigating through it while sustaining growth. Reach out to us for further insights on our cash flow management strategies: 👉🏻 https://buff.ly/4dQiU5G #exitplanning #exitstrategy #founder #businessowner #CapitalConceptsUSA #Profitability #revenue

📊 EBITDA : A Key Metric for Business Success Ever heard of EBITDA and wondered what it means for businesses? What is EBITDA? EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It's a measure of a company's operating performance, excluding certain expenses like interest, taxes, and non-cash items like depreciation and amortization. EBITDA = Net Income + Interest + Taxes + Depreciation + Amortization Why is EBITDA Important in Business? EBITDA provides a clear picture of a company's operational profitability, making it easier for investors, lenders, and stakeholders to assess its financial health and compare performance across industries. How Can Companies Increase EBITDA? 1. Revenue Growth : Increasing sales and expanding customer base can boost EBITDA. 2. Cost Control : Managing expenses effectively, including operating costs and overheads, can improve EBITDA margins. 3. Operational Efficiency: Streamlining processes and improving productivity can enhance profitability. 4. Asset Management : Maximizing the utilization of assets and reducing unnecessary capital expenditures can positively impact EBITDA. By focusing on these strategies, businesses can work towards increasing their EBITDA and driving sustainable growth. #EBITDA #FinancialAnalysis #BusinessStrategy #DataAnalysis #business #growth #development #share

The top mistake I see companies make is not building their Balance Sheet. Instead most focus only on growing the Income Statement. However this can be myopic. Looking longer term is critical for financial security of your business. Building a strong Balance Sheet will make you more competitive: 1. Better able to weather negative business cycle 2. Better able to take advantage of unexpected opportunities 3. Better able to attract investors 4. Better able to secure financing Aim to build a fortress of a Balance Sheet by: ✔ Build up cash reserves- minimum of 6+ months of operating expenses ✔ Keep cash outflows less than inflows ✔ Less debt relative to assets ✔ Increase efficiency of collecting Account Receivables Can you guess where this 🏰 is?

What’s EBITDA and Why Should You Care? 🤔💼 Okay, let’s talk about EBITDA—the financial term that sounds complex but is actually your best friend when figuring out how profitable a company really is. 📈 EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. Yeah, I know, that’s a mouthful! But here's the cool part: it helps you understand how a business is doing at its core, without getting tangled in financial jargon like loans or tax bills. 🎯 🌟 Why should YOU care about EBITDA? It cuts through the noise. Think of EBITDA as the company’s “pure” earnings before those extra costs like interest or taxes come into play. It helps you see how well a company is running its day-to-day business. It’s great for comparing companies. Want to know which company is performing better? EBITDA is like a financial equalizer—it levels the playing field, no matter how companies are financed. It helps with valuations. This is key for anyone thinking of investing or acquiring businesses. For instance, if a company has an EBITDA of $2 million and you multiply that by the industry average of 5x, the company could be valued at $10 million. 💰 But remember, EBITDA isn’t the whole story! It’s one piece of the puzzle. Always consider other metrics like cash flow and net income to get the full picture. 💡 Final thought: Next time you hear EBITDA, don’t roll your eyes. It’s a handy tool for spotting a company’s true earning potential. And now, you know why it matters! Have you ever used EBITDA in your business analysis? I’d love to hear your thoughts. Let’s chat below! 👇 Image Credit : Nicolas Boucher #BusinessMadeSimple #EBITDAExplained #ProfitabilityMatters #FinancialInsight #ValuationMadeEasy #InvestmentTips

What is Retained Profit? Retained profit is the portion of business earnings kept in the company instead of being distributed to shareholders. Advantages: 💸 Cost-Effective: No repayment or interest like loans. 🔄 Flexibility: Freely used for any project. 📊 Financial Stability: Enhances equity and credit rating. 🛡️ Easy Financing: Acts as a safety cushion during tough times. 🔒 Ownership Retention: Maintains control over resources. Disadvantages: 📉 Opportunity Cost: Shareholders may want immediate returns. 🔍 Limited Funds: Only available profits can be reinvested. ⚠️ Potential Misuse: Risk of ineffective use without external oversight. 📉 Shareholder Expectations: Underutilized profits can impact stock value. 💼 Tax Implications: Higher taxes if not reinvested efficiently. Conclusion Retained profit is essential for long-term growth and stability but must be managed wisely to balance immediate shareholder returns and future business needs. #BusinessTips #FinancialManagement #RetainedProfit #PaySaxas