Business financial analysis
Free Cash Flow: Why the Definition Must Travel with the Number
Compare common free-cash-flow constructions and distinguish operating cash less capital spending from cash remaining after contractual commitments.
Financial education
L.G
Financial education & practical analysis. Publication desk.
Published articles
352 articles
Business financial analysis
Maintenance and Growth Capital Spending: Testing an Unobservable Split
Evaluate the judgment involved in splitting capital spending between maintenance and growth, and use sensitivities instead of assuming depreciation is a proxy.
Business financial analysis
Debt-to-Equity Ratios: Choosing the Numerator and Interpreting the Denominator
Compare interest-bearing debt and total-liability leverage ratios, then examine how buybacks and negative equity can make a familiar ratio misleading.
Business financial analysis
Interest Coverage: Testing the Cushion Before Financing Costs
Compare EBIT-based interest coverage under hypothetical earnings and interest changes, while distinguishing accounting coverage from actual debt-service cash.
Business financial analysis
Net Debt: Deciding Which Cash Can Really Offset Borrowing
Calculate gross and net debt under different cash-availability assumptions, and examine why netting does not remove maturity or contractual risk.
Business financial analysis
Return on Equity: Understanding Profitability with a Changing Capital Base
Analyze return on equity using average book capital, and see how distributions, losses, and asset recognition can alter the ratio without changing profit.
Business financial analysis
DuPont Analysis: Separating Margin, Asset Use, and Financial Leverage
Decompose hypothetical return on equity into margin, asset turnover, and the equity multiplier, and distinguish operational improvement from added leverage.
Business financial analysis
Return on Invested Capital: Matching Operating Profit to the Capital That Produces It
Construct a hypothetical ROIC with clearly defined operating earnings and capital, then test the impact of goodwill, excess cash, and tax assumptions.
Business financial analysis
Share Dilution: Distinguishing Smaller Ownership from Changes in Economic Value
Analyze new-share issuance through ownership percentages and hypothetical value, showing why dilution of ownership does not always mean destruction of value.
Business financial analysis
Basic and Diluted EPS: Matching Earnings with the Shares That Claim Them
Explain weighted-average shares and potential dilution using hypothetical EPS calculations, while avoiding the assumption that EPS equals a cash distribution.
Business financial analysis
Share Buybacks and EPS: Separating Denominator Gains from Business Growth
Trace a hypothetical repurchase through EPS, earnings, and cash, and see why per-share growth alone cannot establish that a buyback created value.
Business financial analysis
Price-to-Earnings Ratios: Matching Price with the Right Earnings Question
Compare hypothetical P/E ratios using reported and normalized earnings, and examine why low multiples, losses, and cyclical profits require caution.