14. June 2024.
Most companies have a structurally POSITIVE working capital. This means that the amount of their inventories, receivables, and prepayments exceeds the amount of liabilities towards suppliers […]
13. June 2024.
(Lessons we can learn from FTI Touristik’s failure – part 2) Doing business in countries with volatile currencies is risky. Yes, your business can grow its […]
11. June 2024.
(Lessons we can learn from FTI Touristik’s failure – part 1) Sales >4bn €. 15% market share in Germany. #3 position in Europe. Failed. _____ What?! […]
6. June 2024.
I am happy to have supported a client from the engineering / energy sector in obtaining EUR 3m 10-year bank loan to finance its solar power […]
2. June 2024.
Cash flow analysis is an excellent tool to spot a company in trouble. But arriving to meaningful conclusions requires a bit of cash flow gymnastics. We […]
17. February 2024.
Is a negative operating cash flow (OCF) a sign of trouble? Most finance textbooks will highlight companies with a negative OCF as companies having some difficulties […]
17. February 2024.
1) Increased interest expenses and outflows If a business is financed through debt with variable interest rates, it will see an increased interest expense in the […]
9. February 2024.
Equity ratio is often used to assess a company’s financial strength, and it is often used as a financial covenant in loan agreements, so it is […]
4. October 2023.
* The first financial statement presented in the Amazon’s (AMZN) annual report is…the cash flow statement. Are they trying to tell us something or is it […]
3. October 2023.
Here is the formula: Opening Cash + Free Cash Flow (FCF) = Cash Available for Debt Service – Debt Service = Closing Cash Most CFOs are […]
2. October 2023.
Advances received are a fantastic source of financing – interest-free and received prior to the provision of services or delivering products. Many companies rely on them […]
21. September 2023.
HOW TO CALCULATE PAYABLES DAYS / DPO? The flaws of the standard formula and some potential solutions
The standard textbook formula: Payables days = 365 * Trade payables / COGS (You might also see average trade payables, but for the sake of simplicity […]
16. August 2023.
What we normally think when we see the term EBITDA: 1) Revenue – Operating expenses + Depreciation and Amortization or 2) Net Income + (Net) Interest […]
14. August 2023.
Recently I came across a loan agreement which included a Debt Service Cover Ratio (DSCR) as a maintenance financial covenant. While it is a common covenant […]
11. August 2023.
Let’s look at the example of the recently bankrupted US-based trucking company Yellow Corp. Its EBITDA Interest cover ratio was as follows: 2019: 1,4x 2020: 1,1x […]
2. August 2023.
How and when should we use EBITDA and EBIT? How to decide which one is better suited in a given situation? Here are the four main […]
6. July 2023.
Limitation on dividend distributions is one of the clauses that often creates a friction between a bank and a company. The ideal position for the bank […]
3. July 2023.
ICR is often used as a financial covenant in loan documentation. Sometimes as a part of a wider fin. covenant package, but sometimes also as the […]
25. May 2023.
Here are real-life examples I have been working on recently (some are still ongoing), and how financial statements analysis is helping my clients: A niche manufacturer […]
13. April 2023.
Several examples have already shown that the opportunistic usage of EU funds has not brought the desired results. Moreover, some companies have increased their leverage beyond […]
13. April 2023.
Does this mean that EBITDA is a better metric than cash flow metrics? No. But when these are paired, we get a more complete picture. Here […]
5. April 2023.
Oftentimes companies’ reported figures point to a low credit risk, while the truth is completely the opposite. One is at risk of making a wrong decision, […]
2. April 2023.
Preliminary FY2022 accounts of the Končar Group (hereinafter: “Končar” or „the Group”) show a significant sales growth of 51,6% (+17% in 2021), driven by: (i) organic […]
5. March 2023.
Access to revolving credit lines (RCF) is vital to many companies, so it is for Just Eat Takeaway(.)com (JET), a food delivery platform. Luckily, JET has […]
5. March 2023.
After the recent announcement that the Düsseldorf-based Peek & Cloppenburg’s initiated pre-bankruptcy proceedings, Wirtschaftswoche summarized a list of all German fashion retailers which have recently undergone […]
28. February 2023.
One of the most common EBITDA adjustments is an adjustment for non-cash transactions. This means that EBITDA is reduced for inventories and trade receivables write-offs. Theoretically, […]
11. January 2023.
Last Thursday Bed Bath and Beyond (BBBY) warned it’s running out of cash and is considering bankruptcy. (For those not familiar with the company, BBBY is […]
