You have been building a successful small business for years, but don’t know how to add more value. Through a business valuation, you can discover areas of growth you may otherwise not have known. One of those opportunities for growth deals with revenue streams. When...
How can you measure the success of your business? Financial ratios can objectively tell you the story of your business. Learning how to analyze your financial statements and calculate financial ratios comes first. There are a variety of financial ratios to consider...
Profitability ratios measure how well a company uses assets to generate profit. They can be based on sales, assets or equity. The higher the ratio the more profitable to the company. Ratios may include gross profit margin, operating margin, net margin, return on...
Solvency ratios measure the sustainability of the business’s capital structure. These ratios show a company’s ability to pay off long-term obligations to creditors, bondholders, and banks. Business valuations use financial analysis to determine the value of a company....
Liquidity is the ability to convert assets into cash quickly. Learning about each of these ratios can help you identify trends as well as make changes to your operations. Comparing them internally to previous time periods allows you to track changes. While comparing...
As a business owner, it is important to understand how efficient your company is at managing assets such as inventory and receivables. This information is identified during a financial analysis exercise. Efficiency ratios vary from industry to industry, but the most...
