#264: THE DEBATE: Getting Corporate Finance & FP&A Back to Basics

with ROB TRIPPE & LANCE RUBIN

 A couple of commentators were suggesting that FP&A and Corporate Finance were losing their way, so to find out why we invited them onto the show 

 In this week’s episode we are joined on #sitn by two panelistsLance Rubin and Rob Trippe, and together we discuss: 

Three steps we can take to get back to basics and not take particularly avoiding a family P&L 

Where FP&A need to hold the fort down to make things easier and more valuable. 

What Mediterranean sailors and EBITDA can teach us about common language in FP&A to communicate effectively. 

Why data analytics is good but not right now and why it’s important to get more stuck into Excel  

Why heatmaps and gauges will not fascinate CFOs. 

Our Guest Mentors:

ROB TRIPPE is a corporate finance executive, lecturer and writer. Rob started his career in investment banking as well as holding senior finance roles at large blue chips like Hertz and GE Capital. During his career Rob has developed financial models and managed projects spanning every balance sheet asset and capitalisation class, numerous industries and for a variety of decision-making and regulatory purposes and applications. He is even the former MD of a private equity group which purchased a coveted professional minor league sports team.  

Rob also holds an MBA in Finance from Boston College and lives in the greater New York City area. 

LANCE RUBIN is founder and CEO of Model Citizn and over the last two decades has built a strong reputation throughout the industry of being a highly accomplished and lateral thinking financial modeler. Lance was even referred to by one of the global industry leaders in financial modelling as one of the most tech savvy financial modellers. Lance qualified as a chartered accountant in South Africa & Australia, is an ex-Investment Banker, ex-CFO of a fintech start-up, currently Group CTO of SequelCFO, partner of the accounting & finance careers platform The Outperformer, as well as the Director of BGC Consultants.  

Lance is currently based out of Melbourne, Australia although is a regular traveller working with clients and conducting data analytics visualisation and financial modelling training worldwide. He is also an approved trainer with the Financial Modeling Institute (FMI) 

Key Quotes From the Episode: 

[On getting back to basics with financial modelling of cash flow] A number of people are struggling at the moment because their planning systems don’t do what they need to do and that’s model cash flow, navigate the uncertainty, understand scenarios and get back to basics.”[02:02] 

[On the importance of core strengths] What’s going to get you through the last 5 minutes of your football game, you’re core strengths, and you’re going to focus on back to the basics. [06:30] 

[On the fundamentals] It’s all about cash, that’s the fundamentals. The only reason you go into business and get out of business is for cash, everything else in the middle is noise.” [07:40] 

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Key Points From the Episode:

Three steps we can take to get back to basics and not take particularly avoiding a family P&L 

– Where FP&A need to hold the fort down to make things easier and more valuable. 

– What Mediterranean sailors and EBITDA can teach us about common language in FP&A to communicate effectively. 

– Why data analytics is good but not right now and why it’s important to get more stuck into Excel  

– Why heatmaps and gauges will not fascinate CFOs. 

Time Stamped Show Notes 

[01:10 Lance introduces what prompted his post, that we’ve lost our way with financial modelling and that we’re going back to excel from expensive systems, to navigate uncertainty and model cashflow. 

[02:45] – Why data analytics is good but not right now and why it’s important to get more stuck into Excel. 

[04:55] – Why FP&A needs to have its house in order and why this starts with the fundamentals. Where we’re having internal and external stress and the higher expectations and collaborative nature with the rest of our organisations 

[06:30] – The importance of FP&A’s core strengths. Why returning to the core will allow us to take on further responsibilities. 

[07:30] – Why cash is fundamental, accounting’s role but its key weakness. Getting your financial statements in sync that are based on drivers. 

[09:57] – Why large enterprises cannot zero base budget and the importance of history keeping us out of trouble 

[12:00] – Three steps we can take to get back to basics and not take particularly avoiding a family P&L. 

  • Three-way modelling 
  • Intense focus on cashflow (not income) 
  • Common language & terminology 

[16:44] – What Mediterranean sailors and EBITDA can teach us about common language in FP&A to communicate effectively. 

[18:10] – Will we ever get rid of EBITDA as a valuation metric and some other vanity metrics? 

[21:21] – Where FP&A need to hold the fort down to make things easier and more valuable. 

[25:04] – Are we guilty of chasing the latest productivity ‘shiny objects’ without focussing on improving cash flow. 

[26:45] – A discussion of using tools like PowerBI and HP10Bs for the right purposes. 

[29:00] – Why heatmaps and gauges will not fascinate CFOs. 

[31:15] – Guests give their closing thoughts. 

  • FP&A, Corporate Finance & Modelling Data Dictionary, Terminology & App 
  • Getting in sync 
  • Community initiative 

Connect with today’s guests: 

LinkedIn Profiles: ﷟HYPERLINK “https://www.linkedin.com/in/karlhkern/”  

Lancehttps://www.linkedin.com/in/financial-modelling/ 

Robhttps://www.linkedin.com/in/rob-trippe-9a62254/ 

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