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Bank Profitability: Decoding the Income Statement

Tom Spencer

A bank’s income statement can be simplified into five main line items: Net interest income Non-interest income Operating expenses Provision for credit losses (PCL) Tax Image 1: Illustrative example of a bank’s income statement Source: CIBC’s 2022 Annual Report 1. The biggest swing in operating expenses is likely to be variable compensation.

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Boosting Business Profitability

Business Consulting Agency

This includes scrutinizing income statements, balance sheets, and cash flow statements. Cost Reduction and Efficiency Improvements Consultants are adept at pinpointing areas where a company can trim unnecessary costs and enhance operational efficiency.

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Unlocking Business Profit Potential

Business Consulting Agency

Review income statements, balance sheets, and cash flow to identify areas that impact profitability. It might involve cost reduction, pricing optimization, revenue growth, or operational efficiency. This might involve optimizing supply chains, renegotiating contracts, or streamlining operations.

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Overcoming Data Collection Challenges in Consulting

Tom Spencer

I was assigned to a typical strategy engagement – should client X selling product Y increase sales in market Z? Our hypothesis was that increased sales volume would be associated with increased profitability due to economies of scale. We repeated our request a week later, but they only provided a balance sheet from the previous year.

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The Challenges of Buying (and Selling) a Business

Martinka Consulting

There’s no MLS, the seller doesn’t want anybody to know the business is for sale, there’s a lot more information to verify, and comparable sales information is limited. When taking over a business you have to deal with customers, employees, operations, culture, cashflow, and more. Run it as a business, not a lifestyle.

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M&A deals – benefits and drawbacks

Tom Spencer

Depending on the firm and specific role this case could be very strategic and operational like doing a market entry/growth-type case or very technical (i.e. Acquisitions occur when one company buys another company and folds it into its operations. building financial models like DCF, accretion/dilution, LBO, etc.).

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Customers are your ‘ace in the hole’ during uncertain times

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Before the economy shifts too much, now is the time to act carefully and build stronger ties with your customers, who are the most important assets in your balance sheets. For example, brands are finding success by outsourcing functions beyond basic customer-facing support—including inside sales, back-office, and fraud.