Remember, all costs need to be included in your selling price. The customer pays for everything. In exchange, you give the customer your services. What a deal!
Financials. The following you can uncover the last five a long time and last 5 quarters of harmony sheet, cash flow examples, and dollars flow figures.
There is another useful measurement you should take a look at. That measurement is Net Worth. Net Worth is exactly what it sounds like. If you add up the commercial value for all the things you possess, then subtract all the obligations or debt you owe, that is your Net Worth.
Yes, if you do not have accountability, you have taken away your own money! According to NLP experts, 95% of the people in this world live their live below the line. They blame others for their own problems, come up with excuses and worst of all, deny what they are doing is their fault. Sounds too common? Many people blame the government, blame the economy, and blame the VAT or GST (tax) increase etc for their business woes. The remaining 5% of the people (successful people) live their live above the line. They take ownership of their situation, take responsibility for their actions, and be accountable to themselves.
Once you know the ratio, compare it for parallels with the other companies in the industries and for the market as a whole. Never forget, stocks with a very high p/e ratio can fall dramatically when even the littlest thing goes sour.
If you’re buying a finished item for resale, this is relatively easy. It’s trickier if you have to calculate all the factors, such as labour, that go into manufacturing a product. .
We all know that customers that don’t pay are simply taking money from your pocket and putting it into their own bank account. The best is to have no credit policy, and even collect cash in advance.
First, understand the income or profit and loss statement is not the same as cash flow. These are valuable analytical tools but only measure performance at a specific moment in time.