Ratios measure the relationship between two or more figures in the financial statements. They are used most effectively when results over a number of periods or years are compared. You will see trends or inconsistencies that might need to be addressed. The following are the main financial ratios to measure the financial health of a business. Leverage ratios 1. Debt-to-equity ratio • Total liabilities/Shareholders’ equity Measures how much debt a business is carrying as compared to the amount invested by its owners. This indicator is closely watched by banks as a measure of a business’s capacity […]
Category Archives: Business Growth
Get The Clients You Want
Seth Godin publishes a daily post on his blog which can be insightful and thought provoking. The following post is relevant for all businesses. Unreasonable clients Who gets your best work? If you reserve your best effort for the irritable boss, the never-pleased client and the bully of a customer, then you’ve bought into a system that rewards the very people who are driving you nuts. It’s no wonder you have clients like that–they get your best work. On the other hand, when you make it clear (and then deliver) on the promise that your best […]
The Benefits of a Focused Business Plan
A good business plan will help improve your chances of securing finance through focused, logical and comprehensive provision of information. To prove successful your business plan should include the following considerations: Accurate information For businesses with well organised and up to date systems, the process of preparing a business plan is made much easier. Concise presentation Organised presentation of key factual information assists a bank to better understand the commercial proposition and potential risks attached to the business. Realistic assumptions Assumptions are the fundamental building blocks of any business plan. For example in the hotel and […]
Importance of Internal Communication within the SME
In smaller businesses internal communication is an oft overlooked concept. Many businesses believe that the fewer the people the clearer the objectives. This however, is not always the case. Even within SMEs people can find themselves specialising or taking on specific roles, in the process losing sight of the big picture. Janine Popick of verticalresponse.com offers the following advice to ensure effective communication: Do not underestimate the value of internal meetings. Give each department within your business a chance to relay achievements or interesting developments in their area. Allow questions and participation. The more […]