Finance

The working capital budget is essential for its proper management and, more importantly, for reviewing how it will be financed if necessary. It is an indispensable input for cash flow management and the preparation of the cash budget. The vast majority of companies do not pay enough attention to it, and yet, spending more time […]

The culmination of the budgeting process for sales, cost of sales (COGS), and operating expenses (OPEX) —which we covered in previous articles of this series— allows us to build the Projected Income Statement, also known as the Budgeted Profit and Loss Statement. This document projects the company’s future profitability, presenting in a structured manner the

The Cost of Sales Budget (CMV) projects the cost of the goods or services that a company expects to sell, according to its sales budget. Its correct elaboration is essential to determine the budgeted gross margin and evaluate the operating profitability. The calculation methodology is adapted to the nature of the business and the implemented

The preparation of the Operating Expenses Budget (OPEX) is a fundamental analytical process for financial management. Its objective is to project in detail the resources necessary for the operational functioning of the organization, consistent with its income, its business model and its sources of financing. The allocation of these resources must align with the company’s

Before you frown when you hear the word “budget”, remember that the problem is almost never the budget itself, but the way it is built. Does it obey a collective construction or a small group disconnected from reality? Is it a flexible guide or a straitjacket that won’t let you breathe? A good financial planning

Accounting and financial planning are two of the most important functions of an organization: the axis of corporate finance. They are a marriage that must work hand in hand to fulfill its mission, especially since financial planning is nourished by accounting. What makes them different is their purpose, their temporality and their regulations. Accounting: Looking

Imagine buying the cheapest air ticket on the market and, already on board, discovering that no one calculated the fuel, that there is no flight plan and that the weather conditions were not reviewed. Would you take that flight? This is how, without knowing it, a company without financial planning operates. Financial planning is one

The indirect method is the most used in accounting and financial practice, especially by medium and large companies that prepare their financial statements under the principle of causation (accrual). Unlike the direct method —which shows the actual cash flows—, the indirect method starts from the accounting operating profit (EBIT) and adjusts it by returning non-monetary

Direct cash flow consists of chronologically registering all real cash transactions of a company during a specific period. This method separates cash inflows —sales, customer charges, interest received — and outflows —payments to suppliers, payroll, taxes, interest and other operating expenses—. There are no estimates or accounting adjustments: everything that appears there has passed through

‘We sell a lot, but we don’t see the money, we are always running to pay the payroll.’ — Testimony of a businessman Cash flow – or cash flow statement – is probably the most revealing financial statement of all, and at the same time, one of the least understood and used when it comes