Achieving growth is on every CFOs list of corporate goals, but many don’t know how much profit they’re actually missing out on. And because they don’t know about it, they don’t know it’s even a problem. A lot of this comes down to the way that CFOs look at financial data when it comes to advising on business decisions.
Back in May 2019, the market told us what Thomas Cook accountant’s and financial reports were not prepared to say, “According to Citigroup, Thomas Cook’s tour operations and airline are worth £738m, but its debt is around the same “and implies zero equity value”.
It was effectively worthless, and so were the financial reports that went with the “material uncertainty” statement and £1.5bn half year loss.
So is this the death knell for traditional financial reporting, or do we carry on regardless?
We’ve always wanted FP&A to work a certain way – taking the company’s strategy, putting in place a plan to deliver it, then continually reporting on progress and refining that plan. But in reality, it never quite worked that way – only at a base level.