FINANCE
IS
NOT
Oana Labes MBA, CPA ACCOUNTING
Founder and President
at Financiario.com
https://www.linkedin.com/in/oanalabes/
Accounting Vs.
Finance
How are they different?
Follow @Oana Labes for more Finance, Business and Cash Flow Insights
Accounting
Approach: Historical & Current
Financial Information
Focus: Compliance
Direction: Backward
Verb: Report
Follow @Oana Labes for more Finance, Business and Cash Flow Insights
Finance
Approach: Current & Future Cash
Flows
Focus: Value creation through
capital allocation
Direction: Forward
Verb: Invest
Follow @Oana Labes for more Finance, Business and Cash Flow Insights
Accounting...
evolved through accounting
principles:
1. To smooth out the results of
economic activity over time to
match revenues and expenses.
2. To be conservative in the recording
and reporting of the results of
economic activity.
Follow @Oana Labes for more Finance, Business and Cash Flow Insights
Finance...
evolved in response to accounting
principles:
1. To transition from accounting profits
to cash through EBITDA, operating
cash flow, and free cash flow.
2. To distribute and invest financial
resources with the goal of increasing
efficiency and maximizing profits.
Follow @Oana Labes for more Finance, Business and Cash Flow Insights
Key Soft Skills
in Accounting
1. Detail Oriented
2. Conservative thinking
3. Organized
4. Analytical
5. Efficient
6. Process driven
7. Business acumen
8. Communication
9. Problem solving
10. Critical thinking
Follow @Oana Labes for more Finance, Business and Cash Flow Insights
Key Soft Skills
in Finance
1. Research Oriented
2. Analytical
3. Risk-taking
4. Innovative thinking
5. Results driven
6. Business acumen
7. Collaboration
8. Communication
9. Problem solving
10. Negotiation
Follow @Oana Labes for more Finance, Business and Cash Flow Insights
Specialized
Technical
Knowledge in
Accounting
1. Financial Accounting
2. Audit
3. Tax
4. Business Law
5. Management Accounting
Follow @Oana Labes for more Finance, Business and Cash Flow Insights
Specialized
Technical
Knowledge in
Finance
1. Corporate Finance
2. Capital Budgeting
3. Capital Markets
4. Portfolio Management
5. Financial Modelling
10
Follow @Oana Labes for more Finance, Business and Cash Flow Insights
Value in
Accounting...
is driven by the conservatism
principle:
1. It is the lower of projected asset
values and higher of estimated
liability values
2. When value isn't known it's recorded
as $0 to ensure the business doesn't
overestimate assets and
underestimate liabilities.
11
Follow @Oana Labes for more Finance, Business and Cash Flow Insights
Value in
Finance...
is driven by the valuation process:
1. Future cash flows are projected
over a period of time.
2. A discount rate is applied to the
stream of cash flow values to bring
their value into the present.
3. The discount rate is reflective of
opportunity cost, inflation, and risk.
12
Follow @Oana Labes for more Finance, Business and Cash Flow Insights
Accounting
vs. Finance
How do they work together?
1. Both are invested in the
profitability and success of the
company
2. Reliable accounting data is critical
for financial investing decisions
3. To grow a business they need to
partner and coordinate efforts
13
Follow @Oana Labes for more Finance, Business and Cash Flow Insights
Ring the bell
to never miss a post
I am a financial strategist with over 20 years of business
experience across several industries, 8 of which spent directly
building companies as an entrepreneur, and 12 others advising
and financing hundreds of companies as a senior lender.
Follow me at
https://www.linkedin.com/in/oanalabes/
