Understanding Leverage in Finance: Operating, Financial, and Combined

3 Ways to Improve Cash Flow Without Cutting Costs Cash flow isn’t just about spending less — it’s about timing better. Here are 3 levers I often adjust for clients: 1️⃣ Shorten payment terms or offer early-payment incentives. 2️⃣ Delay non-critical expenses until after key receivables. 3️⃣ Use rolling 13-week forecasts to anticipate dips, not react to them. Cash flow issues aren’t always about profit — they’re about visibility. 👉 When was the last time you reviewed your cash flow forecast?

In U.S. business sales, buyers expect transparency, and a Quality of Earnings (QoE) report delivers just that. Here’s the typical process we follow at Aspen Valuations: 1. Data Request – Gathering financials, tax records, and customer contracts. 2. Adjustments & Normalization – Removing one-time events and accounting quirks. 3. Earnings Analysis – Evaluating recurring revenue, customer mix, and expense sustainability. 4. Risk Identification – Spotting liabilities or red flags early. 5. Report Delivery – A professional QoE report that buyers can trust. ✅ Seller’s Checklist: Have ready your last 3 years of financials, tax returns, accounts receivable/payable reports, debt schedules, and key agreements. Being prepared not only speeds up the process, it can also increase your final sale value. Schedule a free consultation today at https://aspenval.com/ to discuss your valuation needs. #BusinessValuation #QoE #USABusiness #MergersAndAcquisitions #ExitStrategy #AspenValuations #CompanyValue

💡 “It’s a buyer’s market — the vendor can’t improve the price offered.” That’s a myth worth challenging. Accountants can play a vital role in helping clients maximize business sale value — even in a buyer’s market. Start by reviewing the business metrics, understanding the “valuation gap,” and implementing the right systems to lift profitability and value. ✅ It’s not luck — it’s strategy. #ESSBIZTOOLS #BusinessAdvisory #SMEAdvisory #SellingABusiness #AccountingFirms #BusinessGrowth #Valuation #FinancialAdvisory #AustraliaBusiness

This year I reviewed our company's results: a strong annual P&L with reliable forecasts. We know our revenues. We know our costs. But then comes the big question when I compare profit with the bank account balance: Where is the money? A very small amount of money appears on the cash balance compared to the stated profit?? Profit seems to serve as a taxable base for paying taxes, while cash is what I take home. Therefore, next year, I am entering with new superpowers, and that is to build a powerful model for easily tracking future cash flows. Here are some examples that impact on lower CF vs Profit: Sales are recognized in profit, but cash is not yet received. Cash is spent on inventory, while the cost is not yet expensed. Cash is used to pay suppliers but the expense was already recorded in a prior period. High non-cash expenses Prepaid expenses Too much Capex Dividend distribution

EBITDA is one of the most widely used measures of financial performance, but what does it really show? It stands for Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), and helps assess how much money a company generates from its core operations before non-cash or financing costs. Analysts often use EBITDA to: 🔹 Compare profitability between companies 🔹 Evaluate performance without capital structure bias 🔹 Estimate cash flow potential for valuation In short, EBITDA provides a clearer picture of operational profitability, a key metric in financial analysis, valuation, and decision-making.

📈 What’s shaping the future of equipment finance in 2025? From shifting portfolio risk to rising interest rate sensitivity, our latest Trends Brief reveals how market dynamics are evolving—and what they mean for lenders, captives, and lessors in the year ahead. 🔍 This download offers actionable insights backed by industry data and field-level observations. 💡 Key takeaways include: Market volume trends across the U.S. and Canada Emerging customer behaviors and financing models Sector-level insights in construction, transportation, medical, and IT equipment Regulatory themes to watch 📥 Download the full brief now: https://lnkd.in/g884uJS8 Let’s stay ahead of what’s next. #EquipmentFinance #Leasing #Fintech #AssetFinance #ConstellationFinancialSoftware #CommercialLending #ESGFinance #DigitalTransformation #ELFA #CFLA #NEFA

No Real-Time Visibility. No Real Control. Only 22% of manufacturers have real-time visibility into cost performance. — (McKinsey, Future of Smart Manufacturing 2024) Manufacturing moves fast — but your financial visibility doesn’t. When your reporting cycle lags by weeks, decisions are made blind. The consequence? Missed cost anomalies, outdated forecasts, and reactive management. Here’s how leading CFOs are solving it: 1. Move from static reporting to live data feeds. 2. Integrate finance and operations for real-time cost tracking. 3. Use dashboards that show current margin leakage — not last month’s. Dayda enables CFOs to see where profits are slipping today, not weeks later. Discover your real-time cost blind spots using our Cost Leakage Calculator: https://lnkd.in/dyU_KKdV #SmartManufacturing #FinancialVisibility #OperationalExcellence #Dayda

Getting the valuation right starts with one essential element: EBITDA. It is the foundation on which the entire evaluation process is built, and even small adjustments can make a significant difference. Before starting, it is crucial to understand the details behind the numbers. In particular, you need to look closely at: Whether all expenses truly belong to the company. Whether the expenses are recurring and operational. Whether investments are correctly classified and reflected in the accounting. Whether items recorded as expenses should in fact be treated as investments. These are some of the basic points that determine how accurate your EBITDA really is. A clear understanding at this stage ensures that the valuation reflects the true performance of the business.

Uses of the Income Statement The income statement provides critical information about a company’s profitability, financial performance, and operational efficiency over a specific reporting period. Its key uses include: - Assessing historical operating performance to determine how effectively management has generated earnings. - Analyzing trends in revenues, expenses, and net profit across different periods to identify patterns and performance consistency. - Benchmarking profitability by comparing net income and margins with industry peers and competitors. -Supporting dividend policy decisions by evaluating net earnings and retained profits. - Forecasting future performance based on historical financial results and performance indicators. - Computing financial ratios—such as profitability, liquidity, and efficiency ratios—for investment and valuation analysis. - Evaluating management performance in revenue generation, cost control, and overall operational effectiveness.

Built a basic financial forecast model for a hypothetical company, projecting monthly revenue, cost structure, monthly P&L statement tracking gross profit margins, contribution margins, and net profitability trends.