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VAC

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VAC

VAC

The name of the game is VAC. VAC stands for validity, accuracy, and completeness.

In this article, we will outline some key financial objectives that you should always pursue.

The Illustrious 80s

In the 1980s, we had 10.5% interest rates for mortgages.  We had the Junk Bond crisis.  Plus, we had the failing of the Savings & Loans.

We had some pretty good music being put out. Too many good artists and bands to list ….

We also had the Big 8. These were the ...

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12
JUL
0

Categories: Business Advisory, Finance

Current Ratio

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Current Ratio

Current Ratio

Do you know and regularly calculate your organization’s Current Ratio?

Working Capital

If you haven’t already, I encourage you to read the article: Working Capital.

In that article, we explore this important concept.  This is a good “companion” article to this article.

If you recall, Working Capital is defined as Current Assets minus Current Liabilities.

The Key is Current

As you will see, the key word from above is Current.  Meaning, Current Assets and Current Liabilities.

So, by definition, the Current Ratio is equal to ...

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10
JUL
0

Categories: Accounting, Business Advisory, Finance

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Working Capital

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Working Capital

Working Capital

How do you measure your organization’s Working Capital?

What is It?

What comes to mind when you hear the term Working Capital?

If you’re like most people, you probably think of cash on hand.  But, it’s more than just that.

The technical definition is Current Assets minus Current Liabilities.

The Balance Sheet

You will find the elements you need on your organization’s Balance Sheet.

First, Current Assets includes cash.  Additionally, it also includes other assets that will be converted to cash or used up in the ...

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10
JUL
0

Categories: Business Advisory, Business Cycle, Business Growth, Finance

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Stretching the Trade

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Stretching the Trade

Stretching the Trade

Stretching the trade was a phrase I heard many moons ago.  And, before we dig in to the details, I’ll spill the beans.

Stretching the Trade: Definition

Stretching the trade is a phrase used to describe extending Accounts Payable.  That is, increasing Accounts Payable.

Terms

If you’ve been in business for awhile, then you have been accustomed to how things work, so to speak.  Here are some general terms you may have come across.

COD

Typically, when you begin purchasing from a vendor, they ...

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4
DEC
0

Categories: Blog, Finance, Management

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DSO

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DSO

DSO

DSO stands for Days Sales Outstanding.

This article discusses this important ratio (or metric) and what it means to your business.

What Is DSO?

DSO represents the average number of days it takes for you to collect or realize sales revenue.

Example 1: Cash Sale

Let’s say, for example, you sell a widget for cash.  And the person pays you right away.  Your DSO will be zero.  You collected your sale real time.

Example 2: Credit Sale

Let’s say a potential customer contacts you to buy a truckload ...

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21
MAR
0

Categories: Blog, Business Development, Finance

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Is All Money Created Equal?

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Is All Money Created Equal?

Is All Money Created Equal?

Is all money created equal?  If you think money is money – think again.  Whether for personal reasons or for your business, do your best to establish some level of a cash reserve.  Call it a “rainy day” fund, a reserve account, etc.  Something is better than nothing – and more is better than less.

Establishing A Cash Reserve – Why?

Into every life (or in every business), a little rain must fall.  You will appreciate establishing a ...

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8
AUG
0

Categories: Blog, Finance, Problem solving

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