How we measure financial performance

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The Complete Finance Manager Course 2021

Financial Management, ERP systems, Accounting, Capital budgeting, Presentation design, Management, and Negotiation

12:50:06 of on-demand video • Updated January 2021

  • Understand how companies measure financial performance
  • Determine why ERP systems facilitate business process
  • Employ best practices when working on the implementation of an ERP system
  • Learn basic accounting principles
  • Specialize in advanced accounting topics (revenue recognition, invoicing mechanics, cost flow methods, capitalized costs, fair value accounting, revaluation, etc.)
  • Secure financing and understand debt covenants
  • Perform leasing calculations
  • Perform pension liabilities calculations
  • Know how to optimize a company's working capital
  • Perform inventory, trade receivables, and trade payables management
  • Recognize when a company is inefficient in its working capital management
  • Understand the time value of money
  • Be able to calculate cost of debt, cost of equity, and WACC
  • Forecast future cash flows
  • Discount future cash flows to obtain their present value
  • Know how to raise equity
  • Understand the treatment of dividend payments, share repurchases, and stock splits
  • Perform financial statement analysis
  • Assess investment opportunities
  • Apply capital budgeting techniques such as: NPV, IRR, and ROI
  • Build capital budgeting financial models from scratch
  • Perform sensitivity analysis
  • Create interactive Excel dashboards
  • Use Excel slicers for financial reporting
  • Create professional and attractive corporate presentations - in line with ones prepared by top tier investment banks
  • Study the ten key principles of presentation creation
  • Learn how to create company profile, key financials, share price, group structure, waterfall, geographical presence, and other types of slides used in finance
  • Calculate a company's net cash flow
  • Be able to create a company valuation model from scratch
  • Calculate a firm's enterprise and equity value using DCF
  • Learn how to become an effective and respected manager
  • Be able to recruit, select, onboard, train, develop, and retain talented employees
  • Provide employee feedback
  • Organize performance review meetings
  • Negotiate effectively
  • Apply negotiation tactics that will ensure your success in the long run
English [Auto] The topic we'll discuss in this lesson is prosaic how do we measure financial performance. All of us will agree that typically accounting collects information and then this information can be used to analyze how well or how poorly we've performed financially in the old days. Accountants used books that were filled manually and contained information about every transaction when revenues came in they were marked as credit when costs were sustained they were marked as debit. And back then companies had a balance sheet journal to containing information about the assets and the liabilities of the business about what the company owns and owns. So the way we measure financial performance is by collecting information about revenues and expenses and about assets we have acquired and liabilities we have. Right. That's straightforward. Yet it is the key to understanding how we measure financial performance. We must consider every transaction and account for it in our books. As we said in the old days these were actual books. Nowadays we are talking about computer files containing the necessary information. The difference between the two ways to organize data is substantial. A person can only fill this much information in a book and then analyze it. It used to be impractical to perform multiple types of analysis as often the time and effort to do it was not worth the findings. Today we can measure financial performance from all angles. All we need is an open mind and knowledge of how a business functions and which drivers we should look at. That's exciting. We live in an age of data. Not sure if you have heard about it but the amount of data collected in the last two years is higher than the amount of data collected in all the years before that. Can you imagine. So companies can study the way they make and spend money and scrutinize how they can optimize these processes. And when a topic directly affects a firm's bottom line it's profit. Then CEOs and CFOs are slightly interested in how things can be improved. They want to use the information at their disposal in the best way possible and achieve higher sales with new and existing clients while taking costs under control. In our next lesson we'll discuss how companies can gather so much more information nowadays and what needs to be done to do it effectively.