Posts Tagged ‘assets’
How your statement balance, can help you run your business (part II)
Financial ratios are useful to evaluate the strength of your business. The liquidity ratio (current assets less current liability) shows the amount of cash without your having. A current ratio greater than one indicates that you have enough current assets to meet its current obligations when due.
The debt ratio (total liabilities divided by total equity) indicates the amount of money from their creditors, compared with the amount of their money is supporting its assets. A debt-equity ratio greater than one is a strong indicator that you have used too much. Too much debt is a problem in good times, but can wreak havoc when the business falls.
So take a few minutes and see your balance . Compared to last year and see how your business is progressing. Compare your current ratio and debt to equity ratio last year and see if your business is becoming stronger or weaker. You will be amazed at the amount of valuable information contained in the balance .
Tags: Accounts Payable, Accounts receivable, Asset, assets, Balance sheet, Debt ratio, Debt-equity ratio, Equity, Financial ratio, Inventory, Liabilities, Statement balance | No Comments »
How your statement balance, can help you run your business (part1)
The Profit and Loss which describes how your business is doing at the time and the balance is the statement that tells you about the long-term health and strength of your business. The balance shows if it can meet its obligations when due, the amount you owe to others and your prospects for staying in business.
Assets = your stuff. Liabilities and equity = how to pay for your stuff. Liabilities indicate the amount of your stuff that you have paid with money from other people. Equity shows how much of your stuff that you have paid with their own money. Retained earnings are exactly what it sounds like: how much of the gains of previous years have been in the business. Read the rest of this entry »
Tags: Accounts Payable, Accounts receivable, Asset, assets, Balance sheet, Equity, Inventory, Liabilities, Statement balance | No Comments »
Finance Strategy And Financing Option
It represents a very effective source of fresh resources to become, as well as mean funding increases the productivity of businesses by disposing of movable or immovable property not used and that could mean an unnecessary expense.
You can also rent capacity on the company, for example, in the stores. Ideally, employers who make use of this strategy using the funds as working capital, for example to buy inventory and make prompt payment discounts with suppliers.
The advantages of using this type of credit: the company becomes more productive and saves storage costs and maintenance of essential assets, the financing is cheaper, has no financial costs, are obtained fresh funds in an asset that is not used and therefore it is not essential for the company to update our obsolete assets. Read the rest of this entry »