Cash flow is the life force of any company, and every company needs to be able to project accurately it's financial position and here are just a few key equations to help.
1) Profit Margin = Net Income / sales - Amount of money you get to keep.
2) Asset to Equity = Assets / Shareholders equity - Tells you how your business is being financed, either by loans or cash flow. The higher the ratio, more financed by debt.
3) Asset Turnover = Sales / Assets - Provides you with the time it takes you to sell your product or service, the higher the ratio, the faster your product / service is sold.
4) Current Ratio = Current Assets / Current Liabilities - Confirms if you have enough funds to pay off short-term debt. the higher the ratio, the better financial position you are in.
5) Payable Period = Accounts Payable / Credit Purchases per day - Basically, what you owe and what is owed to you.
No matter what your business is, I can help, we specialize in business loans and commercial mortgages. For a free consultation, please contact: Michael@
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