#financial-analysis
Financial Analysis
Analyze financial data and metrics to evaluate business performance and health
Microsoft FY2026 Q3: Azure Hits 40% Growth as the $190 Billion Capex Bet Compounds
Microsoft's FY2026 Q3 revenue rose 18.3% to $82.9B with net income up 23.1% to $31.8B, while Azure re-accelerated to 40% growth — but gross margin compressed for a third straight quarter (69.1% → 68.0% → 67.6%) as capex tracks toward $190B for calendar 2026. Full income statement and balance sheet, FY2020–FY2026 Q3, in a public Beancount ledger.
SpaceX's First Public Earnings: Starlink's $11.4B Profit Machine Is Bankrolling a $6.4B AI Bet
SpaceX's IPO filing shows FY2025 revenue of $18.7B (+33%) and a $4.9B net loss — Starlink earned a $4.4B operating profit at a 38.8% margin while the AI segment (X and xAI) lost $6.4B on $3.2B of revenue and consumed $12.7B of capex. A bull-vs-bear analysis backed by an open double-entry Beancount ledger covering FY2023 through Q1 2026.
Menu Engineering 101: Stars, Plowhorses, Puzzles, and Dogs
Menu engineering classifies every dish by two numbers — contribution margin (menu price minus food cost) and popularity (sales mix) — into four quadrants, Stars, Plowhorses, Puzzles, and Dogs, revealing that a high-volume 32% food-cost burger can generate far more total profit than a "leaner" 38% food-cost entree that rarely sells.
The Altman Z-Score: A Five-Ratio Early Warning System for Business Failure
The Altman Z-Score combines five financial ratios into one number that predicted bankruptcy with 72% accuracy two years out. This guide covers the original formula, the Z' and Z'' versions for private and non-manufacturing firms, a worked example, and how to screen your own company, customers, and suppliers.
Common-Size and Trend Analysis: Turning Financial Statements Into Percentages to Catch Margin Erosion
Common-size analysis restates every line of a financial statement as a percentage of revenue or total assets; trend analysis indexes the same lines across years. Together they expose cost creep, margin erosion, and balance sheet drift that raw dollars hide, and they make a $2M business meaningfully comparable to a $50M peer.
Operating Leverage and the Degree of Operating Leverage (DOL): Why a 10% Revenue Drop Can Eat 30% of Your Profit
Two businesses with identical revenue and operating income can react very differently to the same 10% sales decline. This guide explains the three DOL formulas, walks through a worked SaaS example, identifies which industries carry the highest operating leverage, and lays out a five-step stress test for your own cost structure.
DuPont Analysis Demystified: How to Decompose Return on Equity Into the Three Levers Owners Actually Control
A practical guide to DuPont Analysis — how to split return on equity into net margin, asset turnover, and the equity multiplier (3-step), or further into tax and interest burdens (5-step), with worked examples, trade-offs, and the pitfalls that catch people who apply it mechanically.
WACC for Small Businesses: Calculating Your Hurdle Rate with the Build-Up Method
WACC blends the after-tax cost of debt and the build-up-method cost of equity into one hurdle rate. A worked example yields 15.5% for an equity-heavy small business, the minimum return a project must clear to create value.
Building a Three-Statement Financial Model: Linking Income, Balance Sheet, and Cash Flow
A three-statement financial model links the income statement, balance sheet, and cash flow statement so one set of assumptions flows through all three — answering whether a business is profitable and when it runs out of cash. This guide covers the seven-step build order, the three links that make the model balance, and the errors that quietly break it.
Quality of Earnings Reports: How Sellers Defend EBITDA, Survive Buyer Due Diligence, and Avoid Last-Minute Price Cuts
A Quality of Earnings (QoE) report decides whether a buyer accepts your EBITDA or re-trades the deal price. This guide breaks down the 12 add-backs buyers accept, the 8 they reject, and how the working capital peg quietly cuts seller proceeds at closing.
Break-Even Analysis and Contribution Margin: The Formula Every Small Business Should Run Monthly
A working guide to break-even analysis covering the contribution margin formula, multi-product weighted approach, margin of safety thresholds, and four pricing scenarios — with a candle-maker example showing why a 10% price cut can erase 25% of unit profit.
Activity-Based Costing and TDABC: A Practical Guide to Customer and SKU Profitability
Activity-Based Costing replaces volume-based overhead allocation with cause-and-effect cost drivers, revealing which customers and SKUs actually pay and which silently lose money. This guide explains how ABC and its modern successor TDABC work, the five implementation steps, and why roughly 20% of customers and 30–40% of SKUs often destroy value.