SIB Fixed Cost Reduction’s Post

#81. Characteristics of a winning investment? Look for companies that have historically compounded value per share at high rates, businesses that can reinvest their free cash flow to earn above-average returns and highly skilled managers who treat shareholders as partners. From a financial statement perspective, sales growth and return on capital employed (ROCE = operating margins * asset turns) are key. While both higher operating margins and asset turns help ROCE, if you must choose between the two metrics, businesses with higher asset turns are preferred. Why? Because companies with higher operating margins are better at attracting competition! Are there any other factors that make good investments? #investment #finance #ROCE ----- If you liked this post, follow me at Sarvjit Singh Bedi

Growth is hard. Growing in a manner that fuels future growth and efficiency is even harder. Start by documenting your long-term strategy. Lay a clear path to achieving that vision, always keeping full-scale operations in mind. Ask yourself constantly, "Can we do it this way at 10x our current volume?" BR Messer can help chart your path to sustainable growth and help you identify and obtain the resources needed to get there. #brmesser #growth #futuregrowth #sustainablegrowth #resources #finance #financialresources #financialgrowth #cfo #cfoservices

What's your exit strategy? If it doesn't involve creating streams of RMR to ensure a profitable exit you may be leaving money on the table. Let me explain. Generally speaking, businesses sell for between three and six times their EBITDA. On the other hand, businesses who have built profitable service agreement programs recieve a multiplier of 5, 10 or even 20 + times of every dollar of RMR coming in the door. Are you interested in learning how Service Level Advisers can help your business become more profitable now and in the future? DM me for a free initial consultation. #RMR #serviceagreements #exitstrategy #profitability #ebitda

No company in the world has ever gone bankrupt due to a lack of Revenue ⤵ Instead, they failed to pay off the Expenses So, understanding the cost center of any business is super important. You will meet those expenses from the revenue the company will generate, which is the profit center of the business. So, you must learn how, where, and in which process the company powers up its profit centers. This infographic is the beginning point.... Take any business, figure out the top 5 revenue drivers and cost drivers.  This will give you a better sense of where to focus... That's all for now. Hope you will be able to read the text from the image. #businessanalysis #expenses #revenues #investing #finance #valuations

This is Part Three of our series ‘How CFOs can add value through uncertain times’ – focused on accessing capital. During times of economic uncertainty, CFOs and finance teams play a crucial role in adding value to their organisations. Access to capital through debt or equity is pivotal for a company to withstand external impacts during uncertain times. Difficult economic conditions often lead to financial distress and consolidation in specific industries. Strong balance sheets and reasonable cash reserves enable organisations to manage negative impacts and empower them to create and pursue opportunities in downturns. #FinanceManagement #CFOs #BusinessStrategy

@BusinessSaleBasics - When does it make sense to just sell the assets in the business? Most profitable businesses are sold for future cash flow. Technically the net present value of that cash flow (with an appropriate rate or return) or adjusted EBITDA * a multiple. The analogy we use is that mathematically you are paying for the future milk of the cow. The question then comes up, do we add the assets of the business on top of that? The answer is no because the assets of the business are needed to produce that cash flow, you can't have both. But what if the market value of the assets is more than the cash flow? Sometimes a business is at break-even or very low profit but the market value of the machines, etc. would be significant. In this case, the analogy would be that the cow would have more value as steak than producing milk...but you can have both. For the full video on business valuation, please see the link in the comments below. #businesssales #mergersandacquisitions #businessvaluation

Growth or value creation? During an economic downturn, CFOs must shift their focus towards the latter. Operational improvement is key to achieving higher ROIC in a recession. Reducing CAPEX and improving gross margins can lead to high ROIC while maintaining fixed costs. Keep an eye on capital structure and reduce WACC by increasing leverage to reach the optimum capital structure ( ROIC>WACC). #CFO #ValueCreation #ROIC #CapitalStructure #OperationalImprovement #EconomicDownturn

Good reminder of the power of maintaining EBITDA even in an economic downturn. Not easy, but most SMBs have not exploited all their capabilities, pricing being a key one, business strategy and portfolio management another. Can’t cost cut your way to success! #profitablegrowth #growthstrategy #smallbusinessowners

High capital investment is the primary driver for rapid productivity growth, accounting for at least 70-80 percent of the observed increase as per @McKinsey_MGI research. More in a new report here: https://lnkd.in/eGTP27rd #FutureofAsia #FoA #Productivity

Day 3 of the Financial Challenges Series! Question: How can small businesses effectively manage cash flow during slow seasons? Managing cash flow during slow seasons is crucial for small businesses to stay afloat: 1/ Forecast Wisely: Predict seasonal dips in sales and plan your expenses accordingly. Build a cash reserve during peak seasons to cover slow periods. 2/ Control Expenses: Review and cut non-essential costs during slow times. Negotiate better terms with suppliers or seek discounts for early payments. 3/ Boost Sales: Offer promotions or discounts to stimulate sales during slow periods. Explore new revenue streams or diversify your product offerings. 4/ Monitor and Adjust: Regularly track your cash flow and adjust forecasts as needed. Stay flexible with budgets and be prepared to adapt to changing conditions. Have any questions about managing cash flow? Drop them in the comments below! P.S. - Follow CA Amit Jagwani for more such IPO and Finance-driven updates. #finance #series #challenge #investing #IPO #research #investmenttips #IPO #financialnews #postipo