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Category Archives: Finance
How to Calculate the Net Present Value (NPV) of a Capital Investment
How can you identify the most financially attractive investment? Make the right choice and your business will bloom with new revenue and added value. Make the wrong choice and you will spend years untangling from an unwise investment and incurring … Continue reading
How To Calculate An Internal Rate of Return (IRR)
There are three primary methods of evaluating the financial return of a capital investment. You can look at a static or pro forma return on investment (ROI), an internal rate of return (IRR) or the net present value (NPV) of … Continue reading
How to Calculate a Capital Investment Return (ROI)
You have a plan to strategically invest your business capital. You want growth in sales and value for your company and you have identified one or more opportunities to deploy your company’s cash and accomplish your business objectives. How can … Continue reading
Posted in Executive Coaching, Finance, Management Consulting, Strategic Planning
Tagged business, Investing, Pro forma, Rate of return
3 Comments
The Best Ways to Get a Business Finance and Accounting Education
Do you trust your accountant and finance manager? Image via Wikipedia A vast majority of them are trustworthy and reliable. However, business history is full of cases where people in charge of the company purse abused their position of trust through accounting … Continue reading
Four Essential Accounting Principles For Executives
Many business executives have a hole in their basic accounting education. Either they forgot what they learned in b-school or never got formal accounting training. A business leader that doesn’t know what they don’t know is in a dangerous position. … Continue reading
How to Evaluate Your Company Against Time and Rivals
Is your business trending up and beating the competition? It is critical to understand how your company is performing before making any capital investment, formulating business plans or borrowing money. What you don’t know is dangerous territory for making important … Continue reading
How is Your Financial Teeter Totter? Understanding Business Leverage Ratios
Do you remember riding the teeter totter at the park when you were a kid? The hard wooden seat attached to the metal pole with the flaking paint of many colors. The advantage always went to the heavier person who … Continue reading
Two Ways To Know Your R.O.I is A.O.K.
An investment in a business should yield more than a bank certificate of deposit which should yield more than stuffing cash in your mattress. We need a way to compare the investment return across asset classes. The profitability financial indicators … Continue reading
How Liquid Is Your Business? Know Your Financial Viscosity
Are your business assets like a mountain spring or engine sludge? We’ve already looked at operating, or asset management ratios. Liquidity ratios are another important set of financial indicators. Every company needs the ability to pay bills as they become … Continue reading
Posted in Executive Coaching, Finance, Management Consulting
Tagged Asset, business, Company, Current asset, Current liability, Current ratio, Quick ratio, Ratio
2 Comments
How to Understand Your Business Operating Ratios
Do you know the information value of operating, liquidity, profitability and leverage ratios? The most important indicators on a business financial dashboard are operating ratios, also known as asset management ratios. The ability to turn fixed assets, raw materials and … Continue reading
