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corporatefinanceinstitute.com

9 resources from corporatefinanceinstitute.com we point founders to, and the questions each answers.

📄 Article
✓ Link checked Free Beginner

A worked guide to the break-even formula in units and in sales, with the contribution margin behind it.

Break-Even Analysis

From corporatefinanceinstitute.com by Corporate Finance Institute Guide

  • Break-even units = fixed costs / (price minus variable cost per unit).
  • Break-even sales = fixed costs / contribution margin ratio.
  • Rerun it whenever price or costs change.
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Answers How do I calculate my break-even point?
📄 Article
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A concise definition with examples of each quadrant and the framework's limits, useful for writing the SWOT section of a business plan.

SWOT Analysis

From corporatefinanceinstitute.com by Corporate Finance Institute Guide

  • Strengths and weaknesses describe your business relative to competitors.
  • Opportunities and threats come from the market, regulation and technology.
  • A SWOT is an input to strategy, not a strategy itself.
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Answers How do I do a SWOT analysis for my business?
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A line-by-line guide to how an income statement (P&L) is built: revenue, cost of goods sold, gross profit, operating expenses, depreciation, interest, tax and net profit.

Income Statement

From corporatefinanceinstitute.com by Corporate Finance Institute Guide

  • Gross profit is revenue minus cost of goods sold.
  • Operating expenses come next, then depreciation, interest and tax.
  • Lay it out in the same order every month so periods can be compared.
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Answers How do I make a profit and loss statement for my business?
📄 Article
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Explains the cash conversion cycle as days inventory outstanding plus days sales outstanding minus days payable outstanding: how long your own cash is tied up between paying for stock and collecting from customers.

Cash Conversion Cycle

From corporatefinanceinstitute.com by Corporate Finance Institute ~8 min read

  • CCC = DIO + DSO - DPO.
  • Each day you cut from the cycle frees cash without borrowing.
  • Compare your cycle with peers in the same industry.
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Answers What is working capital, and how do I manage it?
📄 Article
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Sets out the three margins with their formulas (gross profit margin, operating profit margin and net profit margin, each as profit divided by revenue times 100), works an example and offers an Excel template.

Profit Margin: Definition, Formula, Types and Examples

From corporatefinanceinstitute.com by Corporate Finance Institute ~10 min read

  • Gross margin = gross profit / revenue x 100; net margin = net income / revenue x 100.
  • The gap between gross and net margin is your operating costs, interest and tax.
  • Download the template to compute all three from your own P&L.
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Answers How do I calculate profit margin and ROI?
📄 Article
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Explains the ROI formula, works an example, shows how to annualise ROI so investments of different lengths compare fairly, and lists its limits.

Return on Investment: Formula, Meaning, and How to Calculate It

From corporatefinanceinstitute.com by Corporate Finance Institute ~10 min read

  • ROI = (gain from investment - cost of investment) / cost of investment x 100.
  • Annualise ROI when comparing investments held for different lengths of time.
  • ROI ignores risk and timing, so use it with payback period for marketing spend.
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Answers How do I calculate profit margin and ROI?
📄 Article
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A clear explainer of working capital as current assets minus current liabilities, with a worked example, what positive and negative working capital mean and a free template.

Working Capital Formula

From corporatefinanceinstitute.com by Corporate Finance Institute ~10 min read

  • Negative working capital is not always bad (some businesses collect before they pay), but it is a warning sign for most.
  • Track it monthly alongside cash, not just at year end.
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Answers What is working capital, and how do I manage it?
Answers How do I calculate gross margin?
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A complete EBITDA reference: both ways to calculate it, why analysts use it, its limits (it is not cash flow) and how the EV/EBITDA multiple is used in valuation.

What Is EBITDA? Definition, Formula and Examples

From corporatefinanceinstitute.com by Corporate Finance Institute 10 min read

  • EBITDA = net income + interest + taxes + depreciation + amortisation.
  • EBITDA ignores capital spending and changes in working capital, so it is not cash flow.
  • EV/EBITDA is the common multiple for valuing a business with stable operations.
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Answers What is EBITDA, and how do I calculate it?
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