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Archive for Business matters

How financial skills guarantee long-term success

Are you passionate about your own business and feel that it can grow rapidly?

Startup Concept

You too can be a success, but there are important things to consider before becoming an entrepreneur.

Let’s discuss some important success factors.

For starters, take the business plan. A plan helps you get to market faster by having everything clearly laid out, on paper, focused. It puts your goals, strategies and actions in black & white, there for you to tweak, refine and perfect. An important part of the business plan is ‘financials’.
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Why Financial Analysis is Vital for Managers?

We’ve already started the discussion about financial ratios in the article What Are Financial Ratios? and will now go further.

Assests-Liabilities

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.
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Understanding Financial Statements In 5 Easy Steps

1. Why is it important to understand financial statements?

Financial statements provide information about the economic performance of a company. The purpose is to show how investors’ money has been used in trying to obtain profits and growth, in both, the short and long term. Financial statements should be understandable, relevant, reliable and comparable. Reported assets, liabilities, revenues, expenses, income and equity are directly related to an organization’s economic success.
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Liquidity and Profitability

Have your say: Profitability or Liquidity?

Most business owners see growth as the solution to a cash-flow problem. That’s why they often achieve their goal of growing the business only to find they have increased their cash-flow problems in the process. Plan for growth and the related cash outflow in advance, so not to be badly surprised. (more…)

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Why Financial Analysis is Vital for Entrepreneurs?

Entrepreneurs and managers have to make sure that scarce resources are employed to best accomplish business goals.

Investment Strategy

Entrepreneurs and managers also carry out decision analysis for new investments aimed to secure the objectives of:

(i) Net Present Value (NPV) and Internal Rate of Return (IRR);

(ii) Payback Period;

(iii) Break-even Point;

What is Investment Decision Analysis?

Is the evaluation process to determine whether an investment in a project or a company is worthy to be implemented. (more…)

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