Important Balance Sheet Ratios measure liquidity and solvency (a business’s ability to pay its bills as they come due) and leverage (the extent to which the business is dependent on creditors’ funding). They include the following ratios: Liquidity Ratios. These ratios indicate the ease of turning assets into cash. They include the Current Ratio, Quick…
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The Balance Sheet and the Statement of Income are essential, but they are only the starting point for successful financial management. Apply Ratio Analysis to Financial Statements to analyze the success, failure, and progress of your business. Ratio Analysis enables the business owner/manager to spot trends in a business and to compare its performance and…
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Balance Sheet Categories Assets: An asset is anything the business owns that has monetary value. Current Assets include cash, government securities, marketable securities, accounts receivable, notes receivable (other than from officers or employees), inventories, prepaid expenses, and any other item that could be converted into cash within one year in the normal course of business.…
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This manual introduces the tools required to prepare a financial plan for your business’s development, including the following: Basic Financial Statements–the Balance Sheet and Statement of Income Ratio Analysis–a means by which individual business performance is compared to similar businesses in the same category The Pro Forma Statement of Income–a method used to forecast future…
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