Archive for August 2025

Understanding how cash moves through a business is essential for operational stability, growth, and valuation. Two common approaches to presenting a company’s cash flow are the direct and indirect methods. Each reveals different insights, serves different audiences, and carries distinct advantages and trade-offs. This article breaks down both methods, compares their strengths and weaknesses, and…

Understanding net cash flow from operating activities is fundamental for anyone evaluating a company’s short-term health and long-term viability. While accrual-based net income captures profitability on paper, operating cash flow reveals whether a business is actually generating the liquidity needed to pay bills, invest, and grow. This article explains the concept, walks through a clear…

Understanding cash flow is the backbone of sound financial management. While income statements and balance sheets tell important stories, the cash flow statement shows how cash actually moves through a business, where it comes from, where it goes, and how quickly it converts. Two standard approaches exist for preparing that statement: the direct method and…

Levered free cash flow (LFCF) is a critical financial metric for owners, investors, and advisors who need a realistic picture of how much cash a company can return to shareholders after meeting all obligations, including debt service. Unlike unlevered cash flow, which ignores the impact of debt, levered free cash flow accounts for interest and principal…

Understanding how money actually moves through a business is one of the most practical skills an owner, manager, or advisor can have. Net cash flow, the difference between cash coming in and cash going out during a period, is the number that reveals whether a business can pay its bills, invest in growth, or return…

Building a balance sheet from the ground up is a foundational skill for anyone involved in business finance, including accountants, bookkeepers, advisors, and business owners. A well-prepared balance sheet not only captures a company’s financial position at a point in time but also serves as the starting point for cash flow forecasting, valuation, and meaningful…

Helping clients understand their numbers often starts with a simple conversation: What do the Balance Sheet and Profit & Loss (P&L) actually tell you, and why do both matter? This article lays out a visual, practical comparison that accountants and bookkeepers can use during client meetings. It also highlights tools and training, like those offered…