Profit Answer Man: Scaling with Profit First & Beyond Ep 253 The 5 Numbers to Run Your Business Profitability with Edward Patton
The 5 Numbers to Run Your Business Profitability with Edward Patton
Welcome to another episode of The Profit Answer Man podcast! Today, we dive into a fascinating conversation with Ed Patton, a finance expert dedicated to helping privately owned businesses gain financial clarity. Ed’s unique approach simplifies business financials down to just five critical numbers, empowering leaders to understand their financial health without the overwhelming jargon.
Ed’s extensive experience, including roles in public accounting and investment banking, gives him a wealth of knowledge in improving financial performance for small and mid-sized businesses. If you've ever felt that understanding your financials is a daunting task, this episode is for you.
In this episode you will learn:
- The Five Key Numbers for Financial Clarity: Ed explains his proprietary method for breaking down complex financial data into five essential numbers that every business owner can easily comprehend.
- Why GAAP Cash Flow Statements Fall Short: Discover Ed’s custom cash flow statement and why it provides a clearer picture of a company’s liquidity than traditional methods.
- How to Gauge Financial Health with a Simple Metric: Ed shares how to assess your company’s financial well-being in dollar terms, making it easier for owners to act quickly and confidently.
- The Importance of Borrowing Capacity and Business Valuation: Learn how understanding your borrowing potential can open doors to growth opportunities and ensure long-term sustainability.
Key Takeaways:
- Simplicity is Power: By reducing financial reports to five key numbers—cash flow, operating earnings, financial health, value, and borrowing capacity—business owners can make informed decisions without getting bogged down in details.
- Custom Financial Reporting: Ed’s approach emphasizes actionable insights rather than traditional financial ratios, ensuring that business leaders can quickly grasp the financial state of their companies.
- Improving Borrowing Power: Knowing your exact borrowing capacity can give you leverage when negotiating with financial institutions or planning for growth.
- Focus on Value Creation: Understanding how your business creates value—and how to measure it—is essential for long-term success.
About Ed Patton:
Ed Patton is a seasoned finance professional with over 30 years of experience in accounting, investment banking, and financial advisory services. He has dedicated his career to helping small and mid-sized businesses improve profitability and increase their value. His firm offers a unique approach to financial management by simplifying complex financial data into easily digestible metrics.
Through his tailored services, Ed enables business leaders to gain confidence in their financial decision-making, ensuring that they can scale effectively while maintaining financial health. You can learn more about Ed’s work and connect with him via his website, Patton Trender.
Conclusion:
Understanding your business’s financials doesn’t have to be intimidating or complex. With experts like Ed Patton offering clear, actionable frameworks, you can gain the confidence needed to drive profitability and growth. Remember, mastering cash flow, profitability, and financial health is key to building a resilient business.
Links:
https://www.pattontrender.com/
Watch the full episode on YouTube: https://www.youtube.com/@profitanswerman
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Music provided by Junan from Junan Podcast
Any financial advice is for educational purposes only and you should consult with an expert for your specific needs.
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