Change one thing.
Watch what else moves.
Make a prediction, move an input, and trace the consequence through the numbers.
The earnings and cash bridge
Can EBITDA go up while free cash flow goes down?
Experiment 02The transaction machine
Which transactions change profit, and which only move things around the Snapshot?
Experiment 03One transaction, three statements
Does borrowing money improve net income?
Experiment 04The two-clock experiment
After three months, how much of a prepaid annual contract has been earned?
Experiment 05Follow the inventory layers
When input prices rise, which method reports more gross profit?
Experiment 06One machine, many years
Does a longer estimated life change what the machine cost?
Experiment 07What did the buyer pay for?
Does a higher fair value for the identifiable assets raise or lower goodwill?
Experiment 08Interest is not principal
What happens when the annual payment is smaller than the interest charge?
Experiment 09Slice the earnings
Can EPS rise while total earnings stand still?
Experiment 10The cash tied up in growth
Why can collecting ten days sooner release cash without a single new sale?
Experiment 11The book-to-tax bridge
If tax depreciation is faster, does total book tax expense have to fall?
Experiment 12The filing evidence desk
Where would you verify whether reported revenue includes an acquisition?
Experiment 13Make the periods comparable
How do you build last-twelve-month revenue without counting the latest six months twice?
Experiment 14The return engine
Can a low-margin business earn a high return on capital?
Experiment 15The break-even frontier
Can selling more units make the business lose more money?
Experiment 16Growth meets the cash constraint
Can faster growth need new funding even when the forecast profit is positive?
Experiment 17What is the future worth today?
How much of this enterprise value depends on the years after the forecast?
Experiment 18The standalone cost bridge
Why is adding back every corporate allocation usually too optimistic?
Experiment 19Challenge the adjusted earnings
Which exclusions explain performance, and which hide an ongoing cost?