Turnarounds were attempted when organizations were failing by many measures, not
just financial metrics.
Not exact matches
But when
financial management - and by that we mean not
just closing the books, but managing the entire business by
metrics, truly understanding unit economics, and having a strategic view toward future capital raises - is left unattended, cracks in a startup's foundation inevitably start to show.
In fact,
just about all
financial metrics have a positive trend over the past 10 years including margins, revenue, return on capital, and free cash flow
just to name a few.
The objective of this ongoing educational series of blog posts is to sort through, explain, and organize all of the various performance
metrics that are available to the
financial analyst, but most investors really want
just two things:
Just like every other
financial metric we've talked about so far, Buffett looks to maximize this number when making investments.
Company management love this type of sucker —
just focus on that lovely / steady dividend... why not ignore the actual
financial performance &
metrics of the company?
Earnest looks at your full
financial history, ensuring that no one is left behind
just because one
metric shows you as not trustworthy.
We next asked the managing partners, «If you had to select
just one
metric to measure your firm's
financial health, what would it be?»
So the participants were asked: «If you had to pick
just one
metric, what do you believe to be the best barometer of your firm's overall
financial health?»
Just like you detail in your book (which I highly recommend), there are little details that most investors don't pick up on without some experience using these
financial metrics.
CAP rates are a crummy way to value residential real estate and an equally crummy measure of
financial performance for all of the reasons mentioned above and more... you may disagree, but since the only other person out there that regularly disagreed with you on this was kicked off this site for doing so, and
just about every other turnkey operator seem to be in the business of perpetuating it as a
metric to try to artificially pump up the attractiveness of their offerings and scam newbies, please forgive me if I try to offer some counterbalance and perspective to other new investors who would otherwise not have any other exposure to such radical ideas as using CAP rates the way they were designed to be used by the professionals who use them.