A company can grow revenue indefinitely while destroying value with every additional customer. Contribution margin, CAC, LTV and payback period — and the ways each is routinely manipulated.
How an IPO Actually Works, Step by Step
An IPO is reported as an event and is actually a year-long process in which the listing is nearly the last step. What happens at each stage, and what to read before forming a view.
Reading a Cash Flow Statement: What the Income Statement Hides
The income statement is the easiest financial statement to flatter. The cash flow statement records only what actually moved — and reading the two together reveals most of what a company would rather you missed.
Six Red Flags in a Quarterly Report
Most of what goes wrong at a public company is visible in its filings before it is visible in its share price. The informative parts sit in the notes.
Segment Disclosures: Where Companies Hide the Weak Division
A consolidated income statement shows a company as a single entity. Most companies are several businesses averaged into a figure that describes none of them.
Why Inventory Write-Downs Cluster at Quarter End
The timing of a write-down involves considerable judgment, and judgment reveals things audited figures do not. It is also a candid demand signal.
Working Capital Is Where Growing Companies Quietly Fail
The most counter-intuitive fact in corporate finance is that growth consumes cash. A business winning more orders and expanding margins can run out of money doing it.
Operating Leverage: Why Some Companies Fall Apart Faster Than Others
Two companies with identical revenue, profit and growth can differ by several times in how dangerous they are to own. The difference is what share of costs is fixed.
Earnings Season Begins: What Company Guidance Actually Signals
A company beats expectations and the shares fall. To anyone treating the reported quarter as the news this looks irrational. It is not.
Buybacks vs Dividends: Why Companies Choose One Over the Other
The financial effect is nearly identical. The signalling, the tax treatment and the incentives are not, which is why the choice says more about management than about the business.