Business Finance

By Rosemary Peavler, About.com Guide

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Are Your Assets Supporting Your Sales and How do you Find Out?

Tuesday May 15, 2012

During the recession and even now in some industry sectors, one of the problems small businesses had was with their assets. Inventory turnover was slow; collections on accounts receivables was slow. The asset base of small businesses was not really supporting the sales that they made. You can calculate the inventory turnover ratio and the average collection period for your business and compare them to previous time periods and to other firms in your industry sector.

However, if you want to know how your total assets are doing supporting your sales efforts, then you need to use the summary ratio for total assets which is the total asset turnover. Try calculating this ratio and compare it to previous time periods and to other industries in your sector and it will give you the information you are after.

Price Earnings Ratio - Gold Standard of Company Value

Monday May 14, 2012

A company's price earnings ratio is the gold standard of a publicly-traded company's value. This ratio, important in the financial ratio analysis of a business firm, compares the market price of a company's stock to its earnings per share to come up with a multiple. This multiple can then be used to determine if the firm is a good investment and how much an investor is earning per share of stock.

Read and understand more about the price earnings ratio in this newest article on the subject!

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Do's and Don't's of a Kickstarter Campaign

Tuesday May 8, 2012

The Kickstarter website is producing one success story after another in terms of creatives getting the projects of their dreams funded. One such artist, Skye Lucking, just launched her first Kickstarter Campaign titled: "A Seuss-Escher Lovechilde goes the Whole 9 Yards." She's the guest author for this week's article "Do's and Don't's of a Kickstarter Campaign" in which she gives tips about how best to launch a Kickstarter Campaign including tips such as:

Do make sure your other web locations (your website or storefront) are up and ready for people to view it. Part of Kickstarter's appeal is that it will bring new eyes to your work whether your project gets funded or not.

Don't put a project funding goal way higher than you need. According to some Kickstarter pro's it is better to have a goal lower than you actually need so it has a better chance to get fully funded. People love to back a winner, so often times you'll get more than the amount you asked for.

Find out more in this article: Do's and Don't's of a Kickstarter Campaign on the Small Biz Finance website

Steps to Help you Choose a Business Bankruptcy Lawyer

Tuesday May 8, 2012

If you have determined that your company is not going to survive and you need to take bankruptcy, you should not try to go through the bankruptcy proceedings by yourself. You should retain a business bankruptcy lawyer who can make sure that you are treated fairly through the bankruptcy proceedings.

Bankruptcy proceedings are complicated and a bankruptcy lawyer can help you choose the type of business bankruptcy that is appropriate for your business.

Check out the steps you should take when choosing a bankruptcy lawyer!

Merchant Cash Advances Help Small Business Owners Cut Off from Credit

Monday May 7, 2012

Merchant cash advances have saved many small businesses who have been cut off from bank credit during the recession. Even though merchant cash advance providers have been around for most of a decade, they have seen a resurgence in the demand for their services as small businesses have been cut off from traditional bank credit, as reported by The Green Sheet.

When the merchant cash advance product was first developed, it was very easy to get and some providers abused the product. But, the merchant cash advance industry pulled back and put some self-regulatory provisions into place. If a company is careful and chooses the right provider, a merchant cash advance can be a legitimate financial product to help them through a difficult time.

Here's an article that will give you all the facts about merchant cash advances. If you can't get bank credit, maybe this is a source of financing that will help your company.

Merchant Cash Advances as an Alternative Source of Small Business Financing

Intermediate and Long-Term Loans for Your Small Business

Friday May 4, 2012

Long-term loans, as well as intermediate term loans, have a place in small business financing, just as short-term loans do. Where short-term loans are often used for working capital needs, intermediate and long-term loans are used for assets that have a longer life.

Intermediate and long-term loans have been difficult to get during the Great Recession. They are typically used for expansion and small business haven't been doing much expansion in the past two years. These loans are used to buy assets like computer systems, buildings, and equipment. Now that credit has loosened up a bit, small businesses with good credit should be able to apply for long-term and intermediate-term loans with their local banks successfully. Instead of relying on the large banks, check out your local community banks. You are more likely to be able to secure funding from them at this point in our economy.

If not, small businesses can seek out either alternative sources of financing for their business or some type of equity financing.

Why is Free Cash Flow an Important Concept for you to Know?

Thursday May 3, 2012

Do you know how to calculate free cash flow? Free cash flow is the gold standard for your company. It is what you have left for investors and debtholders after you satisfy all your obligations. Firms with a positive free cash flow are usually in a good financial position

There are three ways to calculate free cash flows. If you calculate it correctly, all three ways should give you the same answer. Calculating free cash flow is a part of cash flow analysis for your company.

Business Financing Sources in 2012 - What Should Your Business Consider?

Wednesday May 2, 2012

By the end of the first quarter of 2012, it became clear what sources of business financing are in the game for 2012 and what aren't. The Great Recession, from which we are supposed to be in a recovery, has really changed sources of financing for small businesses. The economic indicators may say we are in recovery but small businesses, along with many individuals, just aren't feeling it yet. So where can small businesses turn for their business financing needs - from working capital to seed money to expansion capital?

I've developed a list, with supporting articles, on the best sources of small business financing available in 2012 for businesses to tap. Check it out! Best Sources of Small Business Financing in 2012

Calculate Cash Flow Ratios When Doing Financial Analysis

Wednesday May 2, 2012

Analyzing cash flow ratios are one method of keeping track of the liquidity and solvency of your company. The current ratio and the quick ratio are the financial ratio that business owners are most familiar with.

There are other cash flow ratios that give you more and better information. Check them out in the following article:

Cash Flow Ratios - Calculate the Liquidity, Solvency, and Viability of your Company

The Accounting Equation

Tuesday May 1, 2012

Are you familiar with the accounting equation? It represents the relationship between assets, liabilities, and shareholder's equity on the balance sheet and can be extended to include the income statement. Every business owner needs to understand the accounting equation in order to understand the relationships between financial statements and run their business.

Even if you use an accountant for your bookkeeping and accounting needs, you still need to understand basic accounting so you know what you are giving the accountant and how it is used. Check it out!

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