Profit First: Reverse Engineer Your Way To Financial Success

Terry Starbucker

Michalowicz now operates his third million dollar venture, is a former small business columnist for The Wall Street Journal; the former MSNBC business make-over expert; is a keynote speaker on entrepreneurship; and is the author of Profit First , The Pumpkin Plan and The Toilet Paper Entrepreneur, which BusinessWeek deemed “the entrepreneur’s cult classic.”. What’s wrong with the traditional “GAAP” accounting formula. “Profit is not an event, it’s a habit.

Why We Need to Update Financial Reporting for the Digital Era

Harvard Business

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. Furthermore, the operating managers cannot take their eyes off day-to-day operations to focus on innovation. Analysts increasingly rely on non-GAAP metrics. Martin Konopka/EyeEm/Getty Images.

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A Blueprint for Digital Companies’ Financial Reporting

Harvard Business

Investors, therefore, look not just for reported revenues but for drivers behind the revenues, especially because digital companies’ operating activities often differ from their revenue-generating activities. The first category should describe the amount spent on supporting current operations. The company should then leave it to investors’ judgement whether those outlays should be treated as investments, premiums for purchasing call options, or as operating expenses.

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5 Reasons CFOs Struggle with Financial Reporting (and How to Overcome the Challenges)

The Kini Group

Recent updates to laws concerning finance include updates to the Financial Accounting Standards Board (FASB) US GAAP financial reporting standards and tight 10-Q and 10-K deadlines. Operate at the highest standards possible, and commit thoroughly. No one likes financial reporting. There, I said it. Analysis, now sometimes that’s fun. But reporting? Always a chore.

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Teaching an Algorithm to Understand Right and Wrong

Harvard Business

For some tasks, algorithms will need to be coded differently according to what jurisdiction they operate in. For example, firms operating in the U.S. need to abide by GAAP accounting standards, which rely on strict rules, while those operating in Europe follow IFRS accounting standards, which are driven by broad principles.

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Keep Your Sarbanes-Oxley Off My CFO

Harvard Business Review

If a CFO is operating outside the bounds of policy or law or GAAP and is willing to lie to the board about it, I doubt that he or she would be overly concerned about whether the line being crossed is dotted or solid. Boards OperationsSelf-proclaimed shareholder advocates have extended Sarbanes-Oxley reforms deeper and deeper into the business. Now some are going too far, pushing those regulations into areas that intrude on effective corporate administration.

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5 Reasons CFOs Struggle with Financial Reporting and Analysis (and How to Overcome the Challenges)

The Kini Group

Recent updates to laws concerning finance include updates to the Financial Accounting Standards Board (FASB) US GAAP financial reporting standards and tight 10-Q and 10-K deadlines. Operate at the highest standards possible, and commit thoroughly. No one likes financial reporting and analysis. There, I said it. Analysis, now sometimes that’s fun. But reporting? Always a chore.

TCO 32

How B2B Software Vendors Can Help Their Customers Benchmark

Harvard Business

Those analyses rely on publicly available data sources, but software providers have accumulated growing amounts of private data on almost every aspect of their customers’ technology, operations, people, and strategies. The appeal of widespread nonfinancial performance measures for assessing companies has been discussed for several decades, but never achieved—despite continuing growth in assets and priorities poorly measured by GAAP accounting.

You Can't Impress Stock Analysts.and Shouldn't Try

Harvard Business Review

It's a strategic and operational straight-jacket. In essence, they'll report their results to GAAP standards and as the SEC, FASB, and other quasi-regulatory bodies require.but they won't answer to analysts. ExxonMobil reported last week that its net income reached $10.3 billion.in just the third quarter. The oil giant is arguably the most profitable corporation in history. Ten billion in three months is historic, but as the New York Times reported, " analysts were not impressed.".

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Midsized Firms Can Survive a Cash Crisis

Harvard Business Review

Operational meltdowns can devour a midsized company’s cash. Cash revenues were indeed $200 million for the year, but the correct GAAP net revenues were only $30 million and profit was $2 million. Without adequate outside capital, a financial hemorrhage can escalate to a liquidity crash, an ugly moment when no one gets paid. At such a time, company leaders must relentlessly focus on one thing: unearthing cash and holding onto it. Not growth, or even profits.

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