An organization’s net working capital paints a picture of its overall financial health and, if sufficient, ensures it has enough funds to maintain operations without concern. But for business owners, analyzing working capital involves more than just knowing its definition and how to calculate it; the process involves meticulous tracking and managing so you understand […]
Every business owner needs to have a good understanding of the three essential financial documents: profit and loss statement, balance sheet, and cash flow statement. A profit and loss statement details income and expenses over a certain period, and a balance sheet details your assets and liabilities, but what exactly is a cash flow statement? […]
Your business is running; you’re making sales; inventory is turning over, but are you making a profit? There are many costs involved in running a business, from salaries to rent to insurance to payroll, and even more so in the early days of a new company when the investments typically surpass the initial sales. It […]
There are few more important financial metrics for business owners than the three liquidity ratios: the quick ratio, cash ratio, and current ratio. Studies show that 50% of small businesses have fewer than 15 cash buffer days, a worrying statistic given these businesses are at great risk of failing if financial challenges are to arise. […]
When it comes to figuring your ability to secure funding for your business, you need to have a clear idea of your financial situation. There are many ways to do this. You must start by gathering all your financial data. You can then use several formulas to assess your current standings. One of those formulas […]
When you start a new business, one of the first tasks you have to learn is sales invoicing, and, in particular, transaction types. Choosing the right transaction for your business helps you get paid on time and avoid delays in cash flow. One example of a commonly used transaction is cash on delivery (COD). Let’s […]
As a small business owner, keeping up with finances can be a challenge, especially as your business grows and accounting gets increasingly complicated. But the importance of business accounting means you can’t just find a makeshift solution. Instead, the best business owners master the art of accounting. And for many, it’s mastered with the help […]
