Oct 8, 2019 | Business, Financial Analysis, Small Business
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...
Oct 3, 2019 | Business, Business Plan, Exit Strategy, Small Business, Value Enhancement
Each year, thousands of businesses change ownership. Yet, many owners don’t maximize the financial proceeds from this historic event. This event is a one-time opportunity to monetize the years invested in the business. One of the primary reasons why business owners...
Oct 1, 2019 | Business, Business Valuation, Financial Analysis, Small Business
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....
Sep 27, 2019 | Business, Business Valuation, Financial Analysis, Small Business
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...
Sep 24, 2019 | Business, Business Valuation, Financial Analysis, Small Business
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...
Sep 20, 2019 | Business, Business Valuation, Small Business, Value Enhancement
Financial statement analysis is used by many groups of people. Some of these include investors and creditors who are making investment and lending decisions. Most importantly, business owners can use them to measure the effectiveness of their operations, investments,...
