Question

Based on the information provided in the article, (article name: CFOs To Watch 2017, value drivers) what are the three most significant insights you learned about a company, CFO, and/or financial analysis that you didn’t realize before? Would this influence how you make investment decisions in the future?

I cant share the link for the article but if you search for the article '' CFOs to watch 2017 you would be able to access it easily.

Answer 1

The three most significant insights that I have learned about a company, CFO, and/or financial analysis that I had not realized before are:

(1): Being a disruptive force in any industry is a double edged sword for a company. This was pointed out by Netflix’s CFO Mr. David Wells. From the insights provided by Mr. Wells I learned that an innovative company that brings along a disruptive force in the industry faces its own set of financial challenges like funding, raising capital, attaining profitability and generating free cash flows. I learned that being a disruptive force in any industry is not always a positive in case of financial analysis of a company.

(2): The second insight that I learned is that many a times one should not be too concerned with quarterly earnings and cost control and should be more concerned with the business itself. This thought was echoed by Amazon’s CFO Mr. Brian Olsavsky. He rightly says that for a company to succeed it is important to aim for operational success. Other success factors will follow naturally.

(3): The third insight that I learned is that once in a while a company has to transform its culture so that its overall fitness to compete improves. When this happens then revenue maximization and increase in ROI will automatically happen says Ford’s CFO Mr. Robert Shanks.

Yes, the above insights will certainly and definitely influence how I make investment decisions in the future. I will now be sure not only to focus merely on numbers but also will look out for qualitative aspects like level of internal controls, leadership’s ability to stimulate the culture of the company and ability to better engage the customers.