All depends on it being solvent and able to pay its bills in the short, medium and long term. The firm must always have sufficient cash to pay for its operating expenses. Thus the policy of the firm for minimum cash is to have enough cash in any given month to pay for next month expenses. (more…)
Archive for January, 2017
We’ve already started the discussion about financial ratios in the article What Are Financial Ratios? and will now go further.
Financial ratios are calculated to analyse management effectiveness in employing capital, solvency and profitability. The information contained in the Income Statement and Balance Sheet is essential to obtain financial ratios.
Of course, it is crucial to know the nitty-gritty of these financial statements. Then you don’t have to read them from A to Z, rather look through several figures and this is it. It is not only “sales” value. And it is not only for one period.