ClearFinancials® empowers senior management with a fully integrated Budgeting, Analysis and Reporting software application that provides a comprehensive framework for on-going assessment of corporate financial performance. In support of a holistic, closed loop methodology of continual performance improvement, ClearFinancials® compliments legacy business systems and provides an affordable solution from which to develop, deploy and maintain your company’s strategic financial objectives.

In recent years, academics and management consultants have argued the merit of the strategic management plan that is based upon the intelligent use of company performance data. New technologies have evolved to support the growing need for data that supports intelligent management decision making. Corporate performance management systems clearly provide a distinct competitive advantage to those with the ability to execute strategy based upon the data. However, while vigorous data analysis and reporting makes sense, the effort may be fruitless if causal factors and metrics to measure those same factors are not linked to corporate strategy. If the goal is to increase economic value, management energy must be purposefully directed toward activities that exhibit the greatest potential to influence the outcome of economic value in a positive way.

Objective – Automate the monthly financial consolidation process across a diverse, multinational organization.

ClearFinancials® empowers senior management with a fully integrated Budgeting, Analysis and Reporting software application that provides a comprehensive framework for on-going assessment of corporate financial performance. In support of a holistic, closed loop methodology of continual performance improvement, ClearFinancials® compliments legacy business systems and provides an affordable solution from which to develop, deploy and maintain your company’s strategic financial objectives.

In perhaps one of the most rigorous academic research projects ever undertaken to test the validity and effectiveness of a wide universe of financial metrics, Carton and Hofer, 2006 make the following concluding remark, “Very few non-public companies monitor the change in their Altman’s Z-score. However, the findings of this research indicate that this is the single most powerful measure for monitoring shareholder returns for both annual and three year time frames. Since this is a survival measure that is also important to creditors, management should pay particular attention to this financial performance metric”. Indeed, it only makes sense that this important measure once again outperforms every metric that it is compared against for the Z-score touches nearly every critical dimension of financial performance. While leveraging the benefits of this important metric makes perfect sense, it is the notion of capturing its change that is most meaningful. This article examines the challenges associated with capturing change and puts forth one solution to help make the process of measuring change useful from a practical perspective.

This paper offers a fresh perspective from which to gauge the ongoing viability of a firm. While investors, lending institutions and trade creditors share common concern with respect to risk, they differ according to both the time horizon and their interest in the ongoing viability of the firm. Using a synthetic credit score and the time tested Altman’s Z-score, this paper presents both measures along a simple X, Y axis plot that aims to provide a perspective of risk that is both straightforward and intuitive.

Much can be done to improve the process of managing risk in the commercial lending environment. Recent advances in technology, continuous academic progress and a groundswell of practitioners motivated by the state of the economy create the ideal atmosphere for change. While pessimists remain paralyzed in the midst of what many refer to as the ‘perfect economic storm’, tomorrow’s leaders are busy retooling processes that will make them stronger and better able to compete. This paper puts forth one change-opportunity that vastly improves the commercial lender’s insight into loan-portfolio risk and opens the door to a new era of better risk management.

Understanding the intrinsic relationship between operating cash-flow and net-income may provide important insight into the performance and economic well being of the firm. Expansion in working capital account balances that place downward pressure on operating cash flow will often precede increases in net income. In contrast, increases in operating cash flow will oftentimes provide a false sense of security to company managers that are flush with cash as net working capital requirements decline. Most financial managers keenly follow both measures separately. However, this paper will demonstrate that the relationship and timing between the two measures may provide the most meaningful insight of all.

Individual companies exhibit substantial differences with respect to operating cash to net income. Steady, but not overwhelming pressure on operational cash flow compared to net income normally indicates a healthy, growing company. To be sure, astute financial managers that understand the proper tension between operating cash flow and net income are better equipped to respond to signals that foretell the story that lie ahead.

A review of the academic paper titled, “Information Provided by Accrual and Cash-Flow Measures of Operating Activities” by Ingram and Lee, (1997) is used as the backdrop for this paper and provides substantial evidence and support for the use of operating cash-flow to net-income as a management tool. Accordingly, this paper will draw heavily from the article and will therefore acknowledge the author’s important contribution to this subject.

Providing transparent and accurate financial performance data to investors, partners and auditors is becoming increasingly important, if not critical for those engaged in the business of private equity and venture capital. In the recent past, this complex environment was tied together with a myriad of Excel® spreadsheets that served to aggregate, consolidate and report portfolio-company performance, making this task extraordinarily inefficient, costly and fraught with error. This paper will frame the problem in some detail and will offer several solutions designed to meet the needs of capital providers that seek to provide more accurate and consistent financial reporting to those that depend on it most.