EBITDA Explained: Cash Profit, Risks, and Real Business Insights
What is EBITDA? Simply put: Earnings Before Interest, Tax, Depreciation & Amortisation. It will often be referred to as the ‘cash profit’ of a business as it reflects the core financial performance of a business, excluding non-cash items and costs related to financing or tax. Components of EBITDA Tangible vs Intangible Assets Defined Both amortisation […]
Understanding Productivity Factor
What is Productivity Factor? In simple terms, your Productivity Factor measures how much gross profit your business generates for every $1 spent on administration wages and associated costs. The formula is straightforward: Productivity Factor = Gross Profit Dollars ÷ Admin Wages (plus super and related costs) Gross Profit Dollars = Revenue – Cost of Goods Sold (COGS) […]
Linear vs Stepped Expenses Explained
Most businesses think about costs too simply. They split them into fixed and variable, direct and overhead. That’s fine for your accountant’s ledger — but it’s not enough if you actually run a business. If you want to control costs like a real CFO, you need to understand how they behave as your business grows.That’s […]
Current Year Earnings vs Retained Earnings vs Dividends
Earnings & Dividends Explained Simply “When it comes to earnings and dividends, there are three different terms that are important. They are current year earnings, retained earnings, and then dividends. Current earnings and dividends for non-companies Firstly, if you are not running a company – so if you are running your business either as a […]
How Foreign Exchange Currency Transactions Impact Your Business
Have you ever looked at a foreign invoice and wondered how shifting exchange rates might affect your business’s bottom line?
When Equity is More Important Than Profit
The Learnable Skill Every Business Owner Needs
Understanding your business’s financial health is crucial for growth and success. But what if you not only knew what was happening with your finances but also understood exactly what to do with that information?
Return on Capital Employed (ROCE)
Return on capital employed (ROCE) sounds like a fancy phrase but like most financial metrics it is a simple formula that can provide powerful insights. In this video we share how to ROCE, what it means and how to take advantage of this information for your business’ investment decisions.