Meet the Expert
Principal, GPChan Consulting
- More than 15 years overseeing financial analysis, planning, reporting and strategy in industries including technology, biotech, manufacturing, retail and ecommerce.
- Effectively managed diverse transitions, including mergers and acquisitions, for well-established corporations such as VantagePoint Capital Partners, Gilead Sciences, Gap and Pepsi-Cola and startups like Tesla Motors, Reachlocal Corporation.
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Cross-Functional Transparency in Operational and Financial Reporting
Principal, GPChan Consulting
- Actual-to-budget variances are the differences between the company's actual revenues and expenses versus the budgeted amounts. Companies generally create reports on a monthly basis showing the amounts of those variances and analyze the reasons for them.
- Actual-to-forecast variances are the differences between the company's actual revenues and expenses versus the forecasted amounts. Companies generally create reports on a monthly basis showing the amounts of those variances and analyze the reasons for them.
- Balance sheet
- A balance sheet is also known as a statement of financial position. A balance sheet has three parts: assets, liability and equity. Assets represents things that a company owns, liabilities are obligations of the company, and equity is assets minus the liabilities.
- Bridge loan
- A bridge loan is a short-term loan providing funds until permanent financing or the next round of financing can become available. It allows a company to meet current obligations by providing immediate cash flow. It is short term and can serve several purposes: to bridge the gap between major rounds of financing; to provide cash resources while searching for an investor or acquirer; or provide cash resources to sustain the company prior to an initial public offering or acquisition.
- Burn rate
- The rate at which a company consumes cash, generally stated on a monthly basis.
- Cash flow
- A cash flow statement reflects a company's liquidity and how much cash is on hand. The purpose of a cash flow statement is to understand the uses and sources of cash for a given period and it reflects three types of financial activities: operating, investing and financing activities.
- Operating activities convert the items reported on the income statement from an accrual basis of accounting to cash basis.
- Investing activities report the purchase and sale of property, plant and equipment and other long-term investments.
- Financing activities report the issuance and repurchase of the company's own stock and bonds and the payment of dividends.
- Cash runway
- The amount of time before your startup runs out of cash assuming all your income and expenses stay the same. A quick calculation is to take the current cash position and divide it by the current burn rate.
- Cross-functional transparency
- The clarity and integrity that is achieved when there are established and ongoing clear, open channels of communication present across all functions and departments within an organization and its stakeholders.
- P & L
- A statement of income also referred to as the "profit and loss statement," a P & L statement shows the company's revenue and expenses for a specified period. It begins by reporting revenue, then subtracts from revenue the cost of running the business, including the cost of goods sold, operating expenses, taxes and interest expense, This gets you to the bottom line of net income or net loss. The net income or net loss is the starting point for your cash flow statement.
- Real-time financial reporting
- Real-time reporting allows access to critical information on an ongoing basis and when an event occurs. Reporting information in real-time means providing company information in a continuous manner, rather than at set time intervals like monthly, quarterly, etc.
Cross-Functional Transparency in Operational and Financial Reporting: Defined Terms