Business Financials Articles

Business Financials & Financial Management Articles

Financial Data Management

Article Summary – Working together, the Income Statement, Cash Flow Statement, Balance Sheet, Breakeven Analysis and Budget Analysis provide a complete picture of a company’s operations, Liquidity, Past Operations and Future Viability. Working together through an interactive Accounting System can be a very useful model in determining future business scenarios and analyze past mistakes. Understanding the financial implications of your Financial Decisions can mean the difference between your company’s success and failure. Probably the most important financial is your Cash Flow Statementbut understanding all of these financials and how they work together is a big secret to a company’s success. Projections are based on assumptions – make sure these are well thought out and realistic as possible.

Breakeven Analysis

Article Summary – We all know that the Breakeven Point in a business is when it’s not making a profit or losing money. Sounds simple, right? Well, can you tell me what your exact Breakeven Point is? Probably not. Most business owners either don’t know it or think they know it, with neither exactly knowing. Breakeven can be expressed as a Dollar amount or Unit Sales, and once determined, you have a Target to reach through a carefully thought out Business Plan. Without an established Breakeven Target, your Strategic Plan is floundering.

Cash Flow Management for Small Business

Article Summary – The Cash Flow Statement is derived from the Cash Flow Budget, which is a forecast of cash receipts and payments. The Cash Flow Budget shows if enough cash is available for expenses, equipment and goods purchases. Cash Flow also indicates whether external sources of cash are necessary. While many business owners think profits are the most important financial component of a company, the lack of cash is often the biggest reason for business failure. In fact, a business may be profitable; yet, it doesn’t have the cash to pay its expenses. Therefore, effective Cash Flow Forecasting, Planning and Management are essential to a Company’s success.

Maximizing Profits in Your Business

Article Summary – This Article will show the business owner how to understand and analyze an Income and Expense Statement; perform a Maximum Profit Analysis; plan for Profits; and apply Profit Maximization Principles. Having a good Business Plan in place to successfully run your business is key but implementation of that Plan is necessary to reap its benefits. One aspect of implementing your Business Plan into your Company’s Operations is through good Income Statement Analysis, Planning and Application. As your Strategic Plan tracks and implements your Profitable Operations, it is important to understand what your Income Statement is telling you, how to realistically project your future profit potential and how to effectively maximize Company Profits.

The Balance Sheet: The Overlooked Financial

Article Summary – The Balance Sheet illustrates how a Company’s Assets, Liabilities and Net Worth are distributed at a given point of time or time period. The Balance Sheets’ set format facilitates analysis. The order of the Balance Sheet’s itemized categories is arranged in the order of Decreasing Liquidity and Immediacy for Assets and Liabilities respectively. Because the Balance Sheet shows changes in Debt, Net Worth and the Business’ Condition over time, it is an excellent tracking and control document. Before getting into Balance Sheet Analysis, let’s examine the important major sections of the Balance Sheet (please find the Balance Sheet format as an Appendix at the end of this article).