FMWC

FINANCIAL
COMPARISONS
HANDBOOK
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TABLE OF CONTENTS www.fmworldcup.com

1. Accounting vs Finance

2. EBIT vs EBITDA

3. VLOOKUP vs XLOOKUP

4. CapEx vs OpEx

5. Cash flow vs Profit

6. Market value vs Book value

7. Debt vs Equity

8. Assets vs Liabilities

9. ROI vs ROE

10. Business Analyst vs Data Analyst

 FMWC

ACCOUNTING VS FINANCE www.fmworldcup.com

Focuses on recording, classifying, and Concentrates on managing assets and liabilities,

interpreting financial transactions. Definition making investment decisions, andstudying
market trends.

Prepares financial statements. Manages budgets and financial planning.

Core Evaluates investment opportunities, conducts
Manages bookkeeping, accounts payable/ Functions risk analysis, & makes strategic financial
receivable, and financial record-keeping.
decisions.

Forward-looking, concentrating on future

Historical in nature, dealing with past Focus
financial planning, investment, and risk
transactions and financial events. on Time
management

Broad, covering all financial transactions Strategic, focusing on optimizing the financial
Scope
within an organization. health and wealth of the organization.

Generates reports for internal and external Produces reports for management, investors,
stakeholders, ensuring accuracy & Reporting and regulatory bodies, focusing on financial
compliance. strategy and decision-making.

Uses standardized principles and Tools and Involves financial modeling, forecasting, and
accounting standards. Techniques various valuation techniques.

Careers include roles such as CPA, Career Careers span financial analyst, investment
auditor, or forensic accountant. Paths banker, financial planner, and risk manager.

Governed by accounting standards like Adheres to regulatory frameworks and financial

Regulation
GAAP. market rules.

Provides accurate and reliable financial Maximizes shareholder value, manages

information for decision-making. Main Goal risks, and ensures financial sustainability.
 EBIT VS EBITDA www.fmworldcup.com

Earnings Before Interest, Taxes,

Earnings Before Interest and Taxes
Depreciation, and Amortization

Represents a company's operating Measures a company's operating

profit, excluding interest and taxes. Definition performance, excluding interest, taxes,
depreciation, and amortization.

EBITDA = Net Income + Interest +

EBIT = Net Income + Interest + Taxes. Formula
Taxes + Depreciation + Amortization.

Measures a company's profitability based Provides a broader view of a company's

on its core operations without the impact Focus profitability by excluding non-cash expenses
of financing decisions or tax considerations. (depreciation and amortization).

Investors and analysts use EBIT to Often used to evaluate a company's cash-
assess operational efficiency and Use generating ability and overall operational
performance. performance.

Reflects profit generated from core Cash Flow Emphasizes cash-generating ability
operations but includes non-cash vs. by excluding both non-cash expenses
Profitability
expenses. and financial costs.

Provides a clearer view of operating

Used to assess operating profitability, Financial
performance by excluding all financial and
considering financial structure. Structure
non-cash elements.

Commonly used in capital-intensive Popular in industries with heavy asset use

Industries
industries. and significant depreciation.

More sensitive to changes in Less sensitive to changes in non-operating

depreciation, amortization, and Sensitivity factors due to its exclusion of certain
non-operating items. expenses.
 VLOOKUP VS XLOOKUP
Stands for Vertical Lookup. It's a function used
to search for a value in the first column of a
range and return a value in the same row from
another column.
VLOOKUP(lookup_value, table_array,
col_index_num, [range_lookup])
Searches for a value in the leftmost column of
a table and returns a value in the same row
from a column you specify.
Supports only approximate match (TRUE)
or exact match (FALSE).
Requires specifying the column index number
where the return value is located.
May return errors if the lookup value is not found
or if the table is not sorted (for approximate
matches).
Available in older versions of Excel and widely
used in legacy spreadsheets.
Known to be slower, especially with large
datasets, due to its limitations and the need
for sorted data.
Suitable for simple vertical lookups where data
is sorted and the lookup value is in the leftmost
column.
Retrieve the name of the employee with ID "1003"
This formula searches for the value
"1003" in column B, returns the corre-
sponding value from column C (the
second column of the range B2:C5), and
uses an exact match (FALSE).
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A newer function introduced in Excel that stands for
Extended Lookup. It's designed to overcome some
Definition limitations of VLOOKUP and offers more flexibility
and capabilities.
XLOOKUP(lookup_value, lookup_array, return_array,
Syntax [if_not_found], [match_mode], [search_mode])
More versatile and can perform lookups in any direction
Functionality (horizontal or vertical). It also allows for approximate
and exact matches without sorting data.
Supports four search modes: exact match, exact
Lookup match with wildcard characters, approximate match,
Mode and the ability to return the last matching item.
Column Automatically returns values based on their
Indexing position in the lookup and return arrays, eliminating
the need for a separate column index number.
Allows for customizable error handling with the
Handling [if_not_found] parameter, providing more control over
Errors error messages.
Available in Excel 365 and Excel 2021, so compatibility
Compatibility may be limited to newer versions unless using the
XLOOKUP function backport.
Generally faster and more efficient, especially for
Performance
unsorted data and complex lookup scenarios.
Ideal for more complex lookup scenarios, unsorted
Use Cases data, and when flexibility and efficiency are
paramount.
This formula searches for the value
"1003" in the range B2:B5 (lookup_array),
and returns the corresponding value from
Example the range C2:C5 (return_array). XLOOKUP
automatically performs an exact match.
 CapEx VS OpEx www.fmworldcup.com

Capital Expenditure Operating Expenses

Capital expenditure refers to investments
made by a company in long-term assets Operating expenses represent ongoing
or projects that are expected to provide Definition costs incurred by a company in its
benefits over multiple accounting periods. day-to-day operations to generate revenue.

Purchases of property, plant, equipment Salaries, rent, utilities, marketing expenses,

(PP&E), infrastructure improvements, Examples administrative costs, and maintenance
and software development costs. expenses.

CapEx is aimed at enhancing the produc- OpEx is necessary for sustaining regular
tive capacity or efficiency of a company, Purpose business activities and supporting
thereby generating future benefits. revenue-generating operations.

Capital expenditures are typically recorded Operating expenses are expensed in the period
Accounting they are incurred and directly impact a company's
on the balance sheet as assets and
depreciated over their useful lives. Treatment income statement.

CapEx affects a company's cash flow in

the period of purchase but has long-term Financial OpEx affects a company's profitability and cash
implications for future cash flows and Impact flow in the current period.
profitability.

Companies assess CapEx decisions

Companies manage OpEx to optimize efficiency,
based on factors like potential return on
investment (ROI), strategic importance,
Evaluation reduce costs, and improve profitability without
compromising operational effectiveness.
and alignment with long-term goals.

Common in industries requiring significant

OpEx is pervasive across all industries and
infrastructure, technology, or equipment
investments like manufacturing,
Industries is a key component of day-to-day business
operations.
construction, and technology.
CASH FLOW VS PROFIT FMWC

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Cash flow refers to the actual cash generated
and spent by a business during a specific
Definition
period, including cash from operations,
investments, and financing activities.
Profit, also known as net income or earnings, is
the amount of money a business earns after
deducting all expenses from its total revenue
over a certain period.

Focuses on the timing of cash movements, Reflects the overall profitability of a business
reflecting when cash is received and Timing over a specific period, regardless of when cash
paid out. transactions occur.

Measured in terms of accounting principles,

Measured in terms of actual cash inflows Measurement considering revenues earned and expenses
and outflows. incurred, regardless of cash movements.

Helps assess a company's liquidity, ability Indicates the financial performance and
to meet short-term obligations, and cash Purpose profitability of a business, reflecting its
management practices. ability to generate income.

Provides insights into a company's ability Reflects the long-term sustainability and
to sustain its operations and invest in Predictive success of a business, impacting its valuation
Ability and investment attractiveness.
growth opportunities in the short term.

Includes non-cash items, which may impact

Does not consider non-cash items such as Non-Cash reported profitability but not actual cash
depreciation and amortization. Items position.

Use in Important for assessing overall financial health,

Critical for short-term operational decisions,
Decision shareholder returns, and long-term strategic
budgeting, and cash flow forecasting.
Making planning.

Investors may view positive cash flow as Investor Investors often focus on profit as a key measure
a sign of financial health and stability, Perspective of a company's success and potential for growth
indicating the ability to meet obligations. and return on investment.

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 MARKET VALUE VS BOOK VALUE FMWC
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The market value of a company or asset represents its current

price in the open market. It is determined by the supply and
demand dynamics of the market and reflects investor sentiment Definition
and expectations about the company's future performance.
The book value, also known as the carrying value,
represents the value of a company's assets as reported
on its balance sheet.

Market value is determined by the prevailing market price of

the company's shares in the stock market. It is calculated by
multiplying the current market price per share by the total Calculation
number of outstanding shares.
Book value is calculated by subtracting the total liabilities
of a company from its total assets, as reported on the
balance sheet.

Market Value = Current Market Price per Share × Total Number Book Value = Total Assets - Total Liabilities
Formula
of Outstanding Shares

Market value is used by investors to assess the attractiveness of

a company's stock and to make investment decisions. It reflects Book value is used to assess the financial health and
Purpose stability of a company. It provides insight into the company's
the market's perception of the company's future growth potential
and profitability. net worth based on its historical financial records.

Subject to frequent fluctuations due to changes in market Generally less volatile compared to market value, as it is
Volatility &
sentiment, investor behavior, economic conditions, and other based on historical cost and does not account for market
Fluctuations
external factors. dynamics.

Typically reflects the market's assessment of both tangible and Inclusion Primarily focuses on tangible assets and liabilities recorded
intangible assets, including brand value, intellectual property, of Intangible on the balance sheet, often excluding intangible assets
goodwill, and reputation. Assets unless they are separately identified and recognized.

While important for understanding the historical cost and

Considered more relevant by investors as it reflects the current Relevance asset composition, book value may be less relevant for
market sentiment and perceived value of the company or its for investors seeking to assess the company's current market
assets. Investors worth and growth potential.

Frequently used in valuation methods such as comparable Use in
company analysis (CCA), precedent transactions, and Valuation
discounted cash flow (DCF), which rely on market-based
Methods
metrics to determine the fair value of a company.
Utilized in valuation methods like the asset-based approach,
which assesses the value of a company based on its net
assets as reported on the balance sheet.

Implications Guides decisions related to asset management, capital

Influences decisions related to capital allocation, mergers and
for Financial structure, dividend policies, and financial reporting,
acquisitions, fundraising, and strategic initiatives, as it reflects
Decision- providing insights into the historical cost and financial
investor perceptions and market trends.
Making position of the company.

Reflects the market's assessment of the company's risk Helps assess the company's financial stability and
Role in Risk solvency, providing a baseline for evaluating risk and
exposure, including factors such as volatility, liquidity, and
market sentiment.
Assessment leverage ratios.

Long-Term vs. Typically viewed from a long-term perspective,

Often associated with a short-term perspective, focusing
Short-Term considering the historical cost and asset accumulation
on immediate market conditions and investor sentiment.
Perspective over time.
 DEBT VS EQUITY www.fmworldcup.com

Represents funds borrowed by a company Refers to ownership in a company, represented

that must be repaid over time, typically with Definition by shares or stocks, providing investors with a
interest. claim on the company's assets and earnings.

Obtained through loans, bonds, or lines of Source of Raised by issuing shares of stock to investors,
credit from lenders who expect repayment. Funds who become partial owners of the company.

Requires regular repayment of principal and Does not require repayment, but shareholders
Repayment
interest according to a predetermined expect returns in the form of dividends or capi-
Obligation
schedule. tal appreciation.

Carries fixed obligations and interest Shares risk with investors, as shareholders may
payments, increasing financial risk if not Risk lose their investment if the company performs
managed properly. poorly.

Does not dilute ownership or control of the Dilutes ownership as more shares are issued,
company, but lenders may impose restric- Control potentially reducing control of existing sharehold-
tions on operations. ers.

Involves paying interest on borrowed funds, Does not involve interest payments but may
which can be tax-deductible, making it Cost require sharing profits with shareholders through
cheaper than equity financing. dividends or stock appreciation.

Offers more flexibility in terms of returns to

Provides fixed repayment terms, allowing for
Flexibility investors and does not impose immediate
predictable cash flow management.
repayment obligations.

Increases leverage ratios, potentially Provides a buffer against financial distress since
amplifying returns but also magnifying risks, Leverage shareholders are not entitled to fixed payments and
especially during economic downturns. can absorb losses.

Appears as liabilities on the balance sheet, Impact on

Reflects as shareholders' equity on the balance
affecting debt-to-equity ratios and interest Financial
sheet, impacting earnings per share and dividends.
expenses on the income statement. Statements

Ideal for raising capital without incurring debt,

Suitable for financing specific projects or Decision maintaining flexibility, and sharing risks with
assets with predictable cash flows. Factors
investors.
 FMWC ASSETS VS LIABILITIES www.fmworldcup.com

DEFINITION DEFINITION

Assets are resources owned by an individual or a Liabilities are financial obligations or debts owed by an
company that have economic value and can provide individual or a company to others.
future benefits.

TYPES OF ASSETS TYPES OF LIABILITIES

Current Assets Current Liabilities

Short-term assets that can be converted
into cash within a year.
Short-term debts to be paid within a year.
Cash and cash equivalents Accounts receivable

Inventory Marketable securities Accounts payable Short-term loans

Fixed Assets Accrued expenses Taxes payable

Long-term resources used in operations, not
Long-Term Liabilities
easily converted to cash.

Property Machinery Vehicles Debts and obligations due after one year.
Plant and equipment (PPE)

Intangible Assets Long-term loans Bonds payable

Non-physical assets that have value Mortgages Deferred tax liabilities

Patents Trademarks
Notes payable
Goodwill Brand recognition

BENEFITS OF ASSETS IMPACT OF LIABILITIES

Generate revenue Improve company value Increase financial risk Affect creditworthiness

Enhance liquidity Provide security for loans Require cash outflows for repayment

KEY DIFFERENCES

Add value and provide future economic Obligations that need to be settled
Nature
benefits

LEFT SIDE Balance

Sheet
RIGHT SIDE

INCREASE Net Worth DECREASE

ASSET MANAGEMENT LIABILITY MANAGEMENT

Focus on acquiring high-value, revenue-generating Prioritize paying down high-interest and short-term debt.
assets. Regularly evaluate asset performance and Maintain a balance between debt and equity financing.
liquidity.
 ROI VS ROE
Return on Investment
ROI measures the profitability of an
investment relative to its cost. It calculates
the percentage return on a specific
investment over a period.
Helps investors and businesses evaluate the
efficiency and profitability of individual
investments or compare the profitability of
multiple investments.
Commonly used to assess the performance
of various investments like stocks, projects,
marketing campaigns, and more.
Focuses on the return generated on
a specific investment.
Can be applied to individual projects,
investments, or business units.
Useful for both internal and external
stakeholders evaluating specific
investments.
If you invest $10,000 in a marketing campaign and it
generates $15,000 in net profit, the ROI would be:
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Return on Equity
ROE measures the profitability of a company in
generating profit from shareholders' equity. It
Definition reflects how effectively management is using a
company’s assets to create profits.
Formula
Indicates how well a company is using the
investors' capital to generate income. Higher
Purpose
ROE values generally indicate more efficient
use of equity.
Typically used by shareholders and potential
Usage investors to gauge the profitability and
management efficiency of a company.
Looks at the overall profitability generated
Scope from the shareholders' equity of the entire
company.
Provides a holistic view of a company’s
Perspective profitability from the shareholders'
perspective.
Primarily of interest to shareholders and
Stakeholders
investors analyzing company performance.
If a company has a net income of $200,000 and shareholders'
equity of $1,000,000, the ROE would be:
Example
BUSINESS ANALYST VS DATA ANALYST www.fmworldcup.com

Focuses on understanding and improving Concentrates on analyzing data to

business processes and ensuring the extract actionable insights and
Focus
alignment of IT solutions with business support data-driven decision-making.
goals.

• Identify business needs and opportunities for improvement.
• Gather and document requirements from stakeholders.
• Develop business cases and project plans.
• Analyze and design business processes.
• Facilitate communication between business units and technical
teams.
• Ensure solutions meet business requirements and deliver value.
• Collect, clean, and preprocess data from various sources.
• Use statistical tools and software to analyze data.
• Create reports, dashboards, and data visualizations.
Responsibilities • Identify trends, patterns, and correlations in data.
• Provide insights and recommendations based on data analysis.
• Communicate findings to stakeholders.

• Proficiency in data analysis tools (e.g., Excel, SQL, Python, R).

• Strong communication and interpersonal skills. • Strong analytical and statistical skills.
• Proficiency in requirements gathering and documentation. • Experience with data visualization tools (e.g., Tableau, Power
•
•
Analytical thinking and problem-solving.
Knowledge of business processes and operations.
Skills •
BI).
Ability to interpret complex data and communicate insights
• Familiarity with project management methodologies. clearly.
• Attention to detail and accuracy.

Works on a broader scope involving Works on a narrower scope focused

business strategy, process optimization, Scope specifically on data collection, analysis,
and project management. and reporting.

Utilizes tools like flowcharts, UML Uses statistical software, programming

diagrams, project management software, Tools and languages (e.g., Python, R), and data
and requirements management tools. Techniques visualization tools.

Provides data-driven insights and

Delivers solutions that enhance business
Outcome recommendations to inform business
processes and meet strategic objectives.
decisions.

Junior Business Analyst Business Analyst Junior Data Analyst Data Analyst 
Senior Business Analyst Business Career Path Senior Data Analyst Data Scientist Data
Architect Business Analysis Manager Analytics Manager

Business Analysts can move into roles Data Analysts can transition to roles
such as Project Manager, Product Opportunities like Data Scientist, Data Engineer, or
Manager, or Business Consultant. Business Intelligence Analyst.
 DEBT VS EQUITY www.fmworldcup.com

Represents funds borrowed by a company Refers to ownership in a company, represented

that must be repaid over time, typically with Definition by shares or stocks, providing investors with a
interest. claim on the company's assets and earnings.

Obtained through loans, bonds, or lines of Source of Raised by issuing shares of stock to investors,
credit from lenders who expect repayment. Funds who become partial owners of the company.

Requires regular repayment of principal and Does not require repayment, but shareholders
Repayment
interest according to a predetermined expect returns in the form of dividends or capi-
Obligation
schedule. tal appreciation.

Carries fixed obligations and interest Shares risk with investors, as shareholders may
payments, increasing financial risk if not Risk lose their investment if the company performs
managed properly. poorly.

Does not dilute ownership or control of the Dilutes ownership as more shares are issued,
company, but lenders may impose restric- Control potentially reducing control of existing sharehold-
tions on operations. ers.

Involves paying interest on borrowed funds, Does not involve interest payments but may
which can be tax-deductible, making it Cost require sharing profits with shareholders through
cheaper than equity financing. dividends or stock appreciation.

Offers more flexibility in terms of returns to

Provides fixed repayment terms, allowing for
Flexibility investors and does not impose immediate
predictable cash flow management.
repayment obligations.

Increases leverage ratios, potentially Provides a buffer against financial distress since
amplifying returns but also magnifying risks, Leverage shareholders are not entitled to fixed payments and
especially during economic downturns. can absorb losses.

Appears as liabilities on the balance sheet, Impact on

Reflects as shareholders' equity on the balance
affecting debt-to-equity ratios and interest Financial
sheet, impacting earnings per share and dividends.
expenses on the income statement. Statements

Ideal for raising capital without incurring debt,

Suitable for financing specific projects or Decision maintaining flexibility, and sharing risks with
assets with predictable cash flows. Factors
investors.