China Faces "Minsky Moment" on Ponzi Financing

MishTalk

Inquiring minds are tuning into a report on the Ponzi finance setup in China. Our analysis indicates that China’s economy has arrived at that unstable state where speculative and Ponzi finance appear to dominate. Most assume China can grow at 7% a year, a notion that I have challenged on many occasions. Morgan Stanley agrees. Please consider Morgan Stanley: China''s Minsky Moment is Here.

How to Improve Your Finance Skills (Even If You Hate Numbers)

Harvard Business

If you’re not a numbers person, finance is daunting. Even if you don’t need to know a lot about finance to do your day-to-day job, the more conversant you are on the subject, the better off you’ll be, according to Richard Ruback, a professor at Harvard Business School and the coauthor of the HBR Guide to Buying a Small Business. “The decision-makers will want to see a simple model that shows revenue, costs, overhead, and cash flow,” he says.

Do you have assets?

Tom Spencer

These might include things like cash, inventory, property, plant and equipment. Looking at it this way, assets will be resources that increase in value or generate cash flow. (Source: Flickr ). When can you consider something that you have to be an asset?

Do you have assets?

Tom Spencer

These might include things like cash, inventory, property, plant and equipment. Looking at it this way, assets will be resources that increase in value or generate cash flow. (Source: Flickr ). When can you consider something that you have to be an asset?

Why Life Insurers and Asset Managers Must Join Forces to Win

BCG

Increasingly, managers find themselves in sometimes heated debate, pitted against their companies’ actuaries, product managers, risk and finance executives, and boards of directors. Article Thursday, December 15, 2016 Life insurers are feeling the squeeze.

Consultant, what are you doing to get retired?

Consultants Mind

Dividend paying stocks, rental properties, cash-flowing businesses. We do all kinds of complicated business cases, and financial models for our clients, yet, when is the last time you applied that level of rigor to your finances? I look forward to retirement. Who doesn’t?

Due Diligence by Management Consulting Firms

Tom Spencer

These are outsourced by PE firms or corporate acquirers to a specialist adviser: lawyers for legal issues, accountants for auditing, and investment bankers for carrying out due diligence from a financing perspective.

The Debate on Corporate Tax Reform Just Started for Real

Harvard Business

The Brady-Ryan plan is based on a “destination-based cash flow tax” (DBCFT) that is also mistakenly labeled a “border-adjustment tax” and has five critical features: A reduced rate, down to 20%. But it uses corporate cash flows to do it, rather than the way the VAT works around the world: through the so-called credit invoice method , where businesses are taxed on sales but deduct taxes paid on inputs.

Taking Greater Risks to Enjoy Greater Rewards with David Baker: Podcast #14

Consulting Success

David focuses on finances, benchmarking, performance, and positioning of firms, as well as PR, advertising, and more. Consulting success will be yours when you start taking greater risks and stop reinventing the wheel with every new client that comes along.

Pandora – great music, pretty terrible business

Consultants Mind

Lots of places online to look at financial statements (yes, I am sure banker-types would go to Bloomberg), but I like Google Finance. Pandora Cash flow here. I listen to Pandora every day. On my computer, on my Roku, on my Amazon Echo, in my car, basically everywhere.

Greece Will Default in May Without Another Bailout or Change in Terms

MishTalk

Cash flow analysis shows Greece is in serious trouble again in spite of having a current account surplus. Greece Bailout Cash Flow Even this game is in trouble now as Greek Cash Flow Charts show.

2008 Financial Crisis – Causes and historical context

Tom Spencer

Many an economics and finance course later, I see that the layers of complexities to the 2008 financial crisis are innumerable. The senior slices of a CDO were considered to be safer because they had first priority on cash flows received from the pool of mortgages in the event of default.

CFO Branding 101

Free Agent CFO

I cannot deny it, but I’d prefer to be the guy that people say, “Man, he’s super creative for a finance geek.” You read far too many business and finance books (ouch!). You are completely unresponsive to issues beyond the discipline of finance.

How Banks Can Compete Against an Army of Fintech Startups

Harvard Business

Moreover, in instances where borrowers want to shop and compare myriad options in one place, they turn to online credit brokers like Fundera or Intuit’s QuickBooks Financing for a one-stop shopping experience. Though the new underwriting is fast and uses intriguing new data, such as current bank transaction and cash flows, it’s still early days for these new credit scoring methods, and they have largely not been tested through an economic downturn.

A Blueprint for Digital Companies’ Financial Reporting

Harvard Business

Based on disclosures following this blueprint, a smart analyst can project a firm’s future revenues, estimate outlays required to sustain the firm’s business model, and calculate the present value of future cash flows. We assume that the current reporting per GAAP is unlikely to change soon, so investors can obtain information on items such as tax expenses, liabilities, and cash assets from the GAAP reporting. Dorling Kindersley/Getty Images.

Frameworks for the Case Interview (Part II: Mergers and Acquisitions Framework)

Tom Spencer

Yes, M&A is not all about finance! There are three main valuation methods you can use to estimate the value of the company: Discounted Cash Flow , Comparable Companies , and. Another framework you should know is the Mergers & Acquisitions framework (M&A framework).

A Refresher on Payback Method

Harvard Business

” And that’s exactly what the method shows you, says Knight: “The time it takes for the cash flow from the project to return the original investment.” Say, for example, the cash flow for the project was actually $3,000/year in Year 1 and nothing thereafter.

Breaking Down Case Interview Frameworks – M&A (Mergers and Acquisitions)

Management Consulted

These cases can be some of the scariest, because they test things like finance principles, but on the other hand, they’re really easy to recognize. All acquirers will want to increase cash flow, but the length of their investment in the company will differ, depending on the type. They will often just want to rapidly decrease costs and increase top-line revenues and profits with cash injections. Once again, it all comes down to finances.

The Case for Stock Buybacks

Harvard Business

If they have spare cash left over after taking all value-creating investment opportunities then they may use it for buybacks. A comprehensive survey of financial executives concluded that “repurchases are made out of the residual cash flow after investment spending.” Repurchases are much more flexible than dividends, the alternative way in which companies return cash to their investors, which attract less ire. Laura Schneider for HBR.

Subscription Businesses Are Booming. Here’s How to Value Them

Harvard Business

Moving from “top-down” valuation to “bottom-up” The default valuation method for finance professionals is “top-down” in nature. ” It is specifically suited for subscription businesses, driving revenue off of the flow of incoming customers over time, their retention patterns as they stay with (or abandon) their subscriptions, and the average revenue per customer (ARPU). Finance & Accounting Digital ArticlePhilippe Marion/Getty Images.

Which MBAs Make More: Consultants or Small-Business Owners?

Harvard Business

So, we begin by assuming that the traditional path offers cash compensation equal to the average starting salary. (It The chart below shows that over the first 10 years of employment, the cash compensation from the traditional job dominates. In this example, the annual cash flow is $1.5

Imagination Sets In

MishTalk

Negative Flow My friend Don Campbell pinged me with this comment the other day: " Nearly all public pension funds have a negative cash flow, meaning they pay out in benefits each year more than they receive in contributions.

SBA Acquisition Loans – A Win-Win-Win Especially for the Seller

Martinka Consulting

And, SBA loans are much safer than many other kinds of loans and, because SBA loans are considered “cash flow loans” (not requiring full collateral), they have better approval considerations. Sellers are getting prices they would never dream of under any other circumstances and with more cash at closing. Buyer cash for downpayment – $500,000. Financing with a conventional. Financing with an SBA.

Housing Starts in China Plunge 25%; Did China's Property Bubble Finally Burst?

MishTalk

A national survey released in March by the Southwestern University of Finance and Economics in Chengdu, China, found that households across the country had 66 percent of their assets in their homes, a figure that rises to 84 percent in Beijing.

Forget Startups – Buy a Business

Martinka Consulting

It’s faster, cheaper, and easier to finance. You trade your capital for immediate cash flow, i.e. you get a paycheck on payday just like everybody else. Fast Company recently had an article titled, “ Forget Startups Just Buy a Small Business from a Retiring Entrepreneur.” ” The first sentence was, “Sure, you may want to found the next “Uber for [insert service here],” but that’s not the only entrepreneurial path you can walk.”.

Research: Writing a Business Plan Makes Your Startup More Likely to Succeed

Harvard Business

This includes everything from past entrepreneurial experience to the need for external finance and the urge to grow the business or to innovate. Better-financed startups are more likely to succeed. It details the full range of activities undertaken to get the business off the ground and, crucially, whether it reaches a key measure of viability: reaching cash flow positive. Jennifer Maravillas for HBR.

What GE’s Board Could Have Done Differently

Harvard Business

Since Immelt’s departure, GE’s stock is down another 30%, as its new CEO, John Flannery, has struggled to cope with the cash flow drain from years of problematic acquisitions, divestitures, and buybacks. The Board Had No Finance Committee. GE’s board had another major structural defect: It lacked a finance committee. These are the types of mistakes that an effective finance committee should have been able to prevent.

What We Lose When Giant Investment Funds Run All Our Companies

Harvard Business

They mean that I can have the rights to the cash flows from a company’s shares without owning the share itself. True enough, but trivial relative to the other costs of the finance industry, and certainly not relative to benefit to be gained.

$550 Billion Energy Junk Bond Bubble Busts; "Whac-A-Mole" Distortions in Multiple Markets

MishTalk

Energy production is extremely capital intense, and often accompanied by negative free cash flow. The Fed’s decision to keep benchmark interest rates at record lows for six years has encouraged investors to funnel cash into speculative-grade securities to generate returns, raising concern that risks were being overlooked. CJES), postponed financings this month as sentiment soured. The energy junk bond bubble has finally popped. Falling crude prices were the catalyst.

Why We Need to Update Financial Reporting for the Digital Era

Harvard Business

This notion, that risk is a desirable feature, can seem like sacrilege to anyone who’s taken an introductory finance course. However, many investors seem to have concluded that the most successful companies with tens of billions of dollars of valuation today could never have justified their valuation at the start of their operation based on discounted cash flow. Martin Konopka/EyeEm/Getty Images.

Hospital Budget Systems Are Holding Back Innovation

Harvard Business

Instead, the finance office can allow the department to keep some of the savings it created, in excess of the original acquisition cost, in future year budgets. But they should also allow the acquisition of software technology to be determined by performance considerations and discounted-cash-flow calculations, not whether the acquisition fits within predetermined capital and operating budgets. Gillian Blease/Getty Images.

Shockingly Bad Fiscal Health of Chicago (and the Financial Engineering Chicago Uses to Hide that Fact)

MishTalk

Chicago finances are even worse than I thought which is saying quite a bit because I have written about the sorry state of Chicago finances on numerous occasion. Many of these uses of bond proceeds are not eligible for tax-exempt financing under the federal tax code."

Use Data to Fix the Small Business Lending Gap

Harvard Business

Online lending platforms like OnDeck have been using information on cash flows and direct deposits from small businesses’ bank accounts as a key indicator of credit health since 2006. After all, isn’t the customer’s voice relevant if you are going to finance a plumber or restaurant? Access to credit is a key constraint for entrepreneurs. And limited credit is in part caused by the difficulty of predicting which small businesses will and won’t succeed.

How Freelancers Can Make Sure They Get Paid on Time

Harvard Business

One of the most stressful things about being self-employed is managing your cash flow. This information helps you better manage your monthly cash flow. Another tip: “Make sure you have the name and contact details of the person in finance with whom you’ll be dealing with,” says Pearce. ” Milestone payments not only help you manage your cash flow, they are “also a tool for communication,” she says.

3 Things Driving Entrepreneurial Growth in Africa

Harvard Business

Firms are realizing what microfinance has known for a while: Local self-policing groups, or village headmen who police honor codes, can hedge cash flows in far-flung places. In Kenya six would-be bikers jointly enter Toyota’s Crux Finance scheme, pay down Sh8,000 ($94) each, and start riding for as little as Sh355 ($4.20) a day, often as boda boda taxis.

Subscription Business Models Are Great for Some Businesses and Terrible for Others

Harvard Business

For finance, short-term revenue gains do not justify poor treatment of members. Today it seems like everyone is rushing to join the digital membership economy. Two of the most popular tactics are online communities and subscriptions.

Stop Focusing on Profitability and Go for Growth

Harvard Business

The global financial crisis prompted many companies to pull in their horns, hoard cash, trim costs, and take a wary view of large investments. So, in real terms, debt financing is essentially free. See More Videos > See More Videos > To elaborate, a company’s intrinsic equity value reflects the long-term cash flows that shareholders expect to receive over time, discounted at the appropriate risk-adjusted cost of equity capital.

Small and Young Businesses Are Especially Vulnerable to Extreme Weather

Harvard Business

Firms applied for credit to finance recovery. Despite the need for credit to finance recovery, disasters can also constrain the capacity of lenders to supply it because so many households and businesses are affected at once. In essence, the fortunate firms took on more debt, committing the business to a stream of cash flows and expenses far into the future to pay for their losses. Challenge risk financing conventions.

BitGold Now Available in US! Why BitGold?

MishTalk

BitGold just completed a financing for C$18 million, which included some top name institutional investors. After this financing, BitGold’s two main owners are the shareholders of GoldMoney and Roy Sebag, whose understanding of gold is as deep as anyone I have ever met. With its IT expertise, C$35 million of cash in the bank and other resources, the combined BitGold/GoldMoney has resources far beyond what GoldMoney alone was able to put together.

How to Become a Successful Freelancer

Harvard Business

” If you’re moving from a full-time job, Goel suggests this calculation: Take your cash compensation and divide by 250 (which is the number of billable days after factoring in vacations, sick time, and typical downtime) and then add 25%–50%.