Weekly Business Lessons @WeeklyMBA

🎓 Student at a top US business school, sharing weekly finance lessons from my courses. Simplifying the complex world of finance for all. #WeeklyMBA 📈✨ Joined February 2024

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Weekly Business Lessons @WeeklyMBA

2 years ago

Applying TVM, investors decide between receiving money now or later. It guides choices on loans, investments, and savings by forecasting a current cashflow's value into the future (or vice versa)! #Investments

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Weekly Business Lessons @WeeklyMBA

2 years ago

Interest rates play a huge role in TVM. They compensate for the risk of waiting and the potential of earning more elsewhere. An interest rate can be a required return, the discount rate of capital, or any other interest rate applicable. #InterestRates

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Weekly Business Lessons @WeeklyMBA

2 years ago

🕰️💰 Let's dive into a fundamental concept in finance: the Time Value of Money (TVM). It's all about the value of money now vs. the future. $100 today is worth more than $100 a year from now. Inflation, opportunity cost, and investment potential shift its value over time. #TVM

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Weekly Business Lessons @WeeklyMBA

3 years ago

Working capital is extremely important - it's a measure of a company's short-term/operational liquidity and is used to fund operations. Overall, its a snapshot of financial health and efficiency! #SimpleFinance

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Weekly Business Lessons @WeeklyMBA

3 years ago

🚦 Negative working capital could signal potential liquidity issues but isn't always bad – some businesses operate effectively with it due to fast inventory turnover or quick receivables collection. #NWC

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Weekly Business Lessons @WeeklyMBA

3 years ago

🔍 Working capital is the lifeblood of a company's day-to-day operations. It's a common term in the finance world but can be a bit tricky to understand. Let's break it down:

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Weekly Business Lessons @WeeklyMBA

3 years ago

@FluentInFinance Movies like The Big Short and Margin Call do a great job of simplifying complex finance topics. If you're looking for a good movie to help with finance education, go with one of those!

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Weekly Business Lessons @WeeklyMBA

3 years ago

These ratios are a powerful next step to apply our previous learning about financial statements. They unlock deeper insights into a company's health, beyond basic financial statements. DM me for a ratio cheat sheet!

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Weekly Business Lessons @WeeklyMBA

3 years ago

📈 Market Ratios give investors an understanding of a company's (stock) market value. Earnings Per Share (EPS) shows the profit allocated to each share of stock. The Price to Earnings (P/E) Ratio compares a company's share price to its EPS.

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Weekly Business Lessons @WeeklyMBA

3 years ago

Profitability Ratios measure a company's ability to generate profit from its operations. Net Profit Margin shows the percentage of revenue that turns into profit. Return on Assets (net income/total assets) indicates how effectively assets generate income. 📊

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Weekly Business Lessons @WeeklyMBA

3 years ago

Turnover (or efficiency) ratios are used to evaluate how well a company uses its assets/manages its operations. Asset Turnover (sales/avg total assets) shows how efficiently a company turns assets into revenue. Inventory Turnover measures how quickly inventory is sold & replaced.

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Weekly Business Lessons @WeeklyMBA

3 years ago

Up next is the leverage ratio - providing insights into the amount of debt a company uses to finance its assets. Debt to Equity compares a company's total liabilities to its shareholder equity. Debt to Asset shows the percentage of assets financed by debt.

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Weekly Business Lessons @WeeklyMBA

3 years ago

A liquidity ratio measures a company's ability to pay off its short-term obligations. Key ratios include the Current Ratio and Quick Ratio (current assets divided by liabilities). A higher number suggests better liquidity, indicating financial stability. #FinanceDaily

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Weekly Business Lessons @WeeklyMBA

3 years ago

Financial ratios are key tools for analyzing a company's financial health. 📈They allow for better comparison between companies - a thread (with examples):

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Weekly Business Lessons @WeeklyMBA

3 years ago

@thesamparr @ShaanVP Completely agree. Unless you’re specifically educated on investing (through higher ed), you WILL be better off investing in a professionally picked index fund. If you want to invest in individual stocks, you should take a predetermined budget and do it with that!

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Weekly Business Lessons @WeeklyMBA

3 years ago

@FluentInFinance Having a good knowledge of personal finance is one of the most important steps you can take to control your life. There are so many resources out there to not only learn about personal finance, but finance in general!

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Weekly Business Lessons @WeeklyMBA

3 years ago

@FluentInFinance Another great read: Barbarians at the Gate, The Fall of RJR Nabisco. An amazing book with some decent business/finance lessons in there too.