Efficiency Ratios

Cash Turnover: Measures how effective a company is utilizing its cash. Formula: Net Sales Cash Sales to Working Capital (Net Working Capital Turnover): Indicates the turnover in working capital per year. A low ratio indicates inefficiency, while a high level implies that the company’s working capital is working too hard. Formula: Net Sales Average Working […]

Liquidity Ratios

Working Capital: Working capital compares current assets to current liabilities, and serves as the liquid reserve available to satisfy contingencies and uncertainties. A high working capital balance is mandated if the entity is unable to borrow on short notice. The ratio indicates the short-term solvency of a business and in determining if a firm can […]

Sources of Finance For Startups

Start-up businesses often have a difficult time finding sources of start-up business financing for their initial financing needs. It is often not possible to get bank loans because financial institutions aren’t interested in unproven businesses. Even with the best possible business plan, in the world of business and finance, you may not be able to convince […]

Ratio Analysis

Ratio analysis is the quantitative analysis of financial information from a company’s financial statements or share price. Ratios are key to financial analysis, as they provide input for evaluating and comparing a company to its peers, or to an industry benchmark. Ratios provide the vital signs used to measure corporate health, allowing investors to drill down […]

How to Raise Capital for Your Business

To raise or not to raise capital for startups is a topic that is discussed every so often. However, the big question is not whether startups need to raise funds; it is about when they should raise funds. Here are some of the best ways to raise capital, options for funding and how to make […]

What Credit Officers Look For Before Appraising A Loan

Lenders assess a person’s credit risk based on a number of factors, including your credit and/or payment history, income and overall financial situation. Here is some additional information to help explain these factors, also known as the “5 C’s”, to help you better understand what lenders look for when appraising such a loan:   Character: […]