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Tag: finance

Understanding management ratios

Understanding management ratios

Business
Management ratios are used as a practical means of assessing the quality of financial management, therefore identifying whether financial management is recognised as becoming either less or more efficient. The three main categories of management ratios include: Cost and profitability ratios Working capital ratios Productivity ratios What are Cost and Profitability Ratios Cost and profitability ratios are a means of looking at the effectiveness of the way costs are being managed in relation to the turnover that has been achieved. This approach allows one to look at both movements and relationships between income, profit and costs. Changes in result may then be utilised in order to obtain a comparative analysis between periods of time such as months or years. The methods...
How to finance small business venture

How to finance small business venture

Finance
Entrepreneurial endeavoring attracts a risky lot. Once the great business idea is developed, it is time to handle the finances. First, it is best to obtain a clear understanding of the difference between business capital and a business loan. The word "capital" has different meanings in finance, economics, and politics. Business financial capital represents ownership in a business. If it is a sole proprietorship business venture that means 100% capital belongs to the sole business owner. Generally, a business has both capital value and liability exposure. Loans represent the leasing of capital, typically with interest, from another. It must be repaid. Loans come with certain legal obligations and constitutes a business risk or business liability. Self-Help Financing: Investing Per...
Home refinancing following bankruptcy: How to refinance mortgage

Home refinancing following bankruptcy: How to refinance mortgage

Finance
Most U.S. citizens are discharged from chapter 7 after just 4 months. Getting a bankruptcy mortgage or home refinancing after bankruptcy is surprisingly easy, provided that you have either a sufficient down payment or equity in your property. Home equity is the difference between the value of your home and any loans that are secured on it. Raising a sufficient house deposit can be difficult, but lenders require this equity to protect their legitimate business interests in the event of the customer defaulting on the loan. How Much Equity is Required for Home Refinancing After Bankruptcy Equity is more than just a sign of commitment on the part of the borrower, it makes it easier for the lender to recover its money in the event of default. In order to improve your chance of getting...
Financial planning: Saving is key to stable income for life

Financial planning: Saving is key to stable income for life

Finance
Smart financial planning revolves around saving money from your income. Fundamental financial wisdom for centuries has been to spend less than what you earn. But many people around the world either do not save at all, or even spend more than what they earn. So they borrow money on interest and accumulate debt. The result is that instead of earning interest on investments, they end up paying interest on borrowings. That creates the opposite of wealth creation, which is wealth erosion. Save a Percentage of Your Income You always have two choices in life. The first and the most tempting choice is that you spend all that you earn and live for today. But tomorrow when you retire, or go through a rough financial patch even before you retire, you will not have a financial cushion to sof...
Is there retirement after self employment

Is there retirement after self employment

Finance
Isn’t everyone aiming toward some form of retirement? For the self-employed, the future might feel a little bit more uncertain. Does having no employer mean having no security? Not necessarily- but independent contractors have to plan (more) for the future. The economy is uncertain right now, and the future always is. Self-employed professionals who independently find their own jobs will not necessarily be provided a retirement plan by any employer or government. Is there retirement after self-employment? Yes- but the professionals, as was the case with their careers, must create this plan for themselves. Self Employment and Social Security The U.S. government provides, at least at present, social security for senior citizens (persons aged sixty-five or older). This is put in ...
Fundamentals of business financial management

Fundamentals of business financial management

Business
The two fundamentals of financial management are represented by management accounting and corporate finance. Managerial accounting includes techniques for financial analysis, costing the activities of the business and forecasting financial requirements. Corporate finance includes functions such as valuations of assets and projects, deciding on the best investment portfolio, reducing risks through hedging operations, and choosing/monitoring the capital structure. Financial Management in Practice Financial managers are responsible for ensuring: Good returns to investors who have provided funds for the business. Monitoring the continued financial health of the business. Reducing the risk exposure of the business. These goals are typically achieved through: Availability of...