Tag: Working Capital
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A (Financial) Tale of Horror
The Curse of Growth “Control your own destiny or someone else will.” — Jack Welch Hope everyone had a Happy Halloween; in that spirit, how about a tale of horror? Imagine we’re running a business together (let’s say it’s a cleaning business) and we have ambitions for rapid growth over the next few years. Starting…
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Working Capital 301: Optimization Strategies
This is part 3 in a mini-series on working capital (check out part 1 here and part 2 here). Let’s recap the basics so far: With the basics covered, how do you spot warning signs in working capital? Let’s pull some real data from a real company here… what you’re seeing below is 22 quarters (5.5 years) of data highlighting days inventory…
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Working Capital 201: Profit vs. Cash Flow Drivers
Ever feel like your business is profitable, but you’re still struggling to pay bills and cover day-to-day expenses? Today we’ll build on the Working Capital 101 concepts we covered last week and drill deeper into the differences between profit and cash flow. Remember: Profit does not equal cash flow Here’s a basic formula/visual walking from revenue down to profit…
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Working Capital 101: The Small Business Owner’s Guide
You’re probably sick of hearing about working capital. Every business has working capital and next to cash, working capital is the lifeblood of every business. (If you think you don’t have working capital in your business, please send me a note, I want to hear about it!). First, what is working capital? Here’s a Net Working Capital…