Tag: liquidity

Days Payable Outstanding

See Also: Accounts Payable Accounts Payable Turnover Days Sales Outstanding (DSO) Days Inventory Outstanding (DIO) How to Create Dynamic Cash Flow Projections Days Payable Outstanding Definition Days payable outstanding (DPO), defined also as days purchase outstanding, indicates how many days on average a company pay off its accounts payables during an accounting period. A useful tool

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Current Liabilities

See Also: Balance Sheet Current Assets Fixed Assets Fixed Assets – NonCurrent Assets Current Liabilities Current liabilities is a category of liabilities on the balance sheet. The category also consists of debts and other financial obligations expected to be paid or settled within one year or within one normal operating cycle of the business (whichever

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Accounts Receivable Turnover Example

Accounts Receivable Turnover Example To emphasize it’s importance we will provide an accounts receivable turnover example. Many companies live and die by collections. These rates are essential to having the necessary cash to cover expenses like inventory, payroll, warehousing, distribution, and more. Accounts Receivable Turnover Example: Manufactco Manufactco is a company that manufactures widgets. Manufactco’s

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Accounts Receivable Turnover Analysis

See Also: Accounts Receivable Turnover Example Financial Ratios Collecting Accounts Receivable Accounts Payable Turnover Analysis Inventory Turnover Ratio Analysis Daily Sales Outstanding Formula Accounts Receivable Turnover Definition Accounts receivable turnover analysis can be used to determine if a company is having difficulties collecting sales made on credit. The higher the turnover, the faster the business

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Accounts Receivable Collection Letter

See Also: Collect accounts receivable Why Use a 13-Week Cash Flow Report as a Management Tool? Unlock Cash in Your Business Accounts Receivable Collection Letter Always send reminder and collection letters. Letters combined with calls can help speed up your collections! Trigger points for letters may be as follows: Balance at 30 days receives a

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Accounts Receivable

See Also: Accounts Receivable Turnover Collect Accounts Receivable Calculate Daily Sales Outstanding Time Saving Tip for Filing Vendor Invoices Accounts Payable Notes Receivable Imprest Account Accounts Receivable Definition The accounts receivable definition is a current asset account on the balance sheet. Accounts receivable (A/R) is a mainstay concept in business. It also represents money owed to

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Company Debt: Pay Down or Borrow?

Many companies have been making a profit over the past few years. As a result, they have generated quite a bit of liquidity. With the banks calling on them offering tons of cash and low interest rates they are faced with the decision of either to pay down their company debt or borrow more? Company

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Creating a Flash Report

The finance function of an organization can contribute significantly to a company’s operating success. The key is how the financial leadership communicates with sales and operating staff. Creating a flash report can make a huge difference in your communications Creating a Flash Report A proven tool to enable this communication is the flash report, or

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Liquidity Hits Main Street

For the past year we have been hearing in the news regarding all of the cash that the Fed has pumped into the economy. The stock market has rallied and the banks have been making record profits. Until now we have not seen much direct results affecting our clients and the local economy. Over the

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Why Don’t I Have Cash?

I was involved in a meeting with a prospect a few weeks ago who we will call Don. Don owns a manufacturing company which is presently experiencing a growth rate of thirty percent annually. The question we are looking at today is why don’t I have cash? Why Don’t I Have Cash? He is showing a

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Financial Ratios

Monitoring a company’s performance using ratio analysis and comparing those measures to industry benchmarks often leads to improvements in company performance. Not to mention these ratios are often part of loan covenants. The following article provides an overview of the 5 categories of financial ratios and links to their description and calculation. Use the following

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Liquidity is Drying Up on Main Street

As the dust settles from the turmoil on Wall Street, I am trying to judge the fallout for our business and our client’s. The danger seems so far removed but I sense that the “mushroom cloud” of financial fallout is spreading! Liquidity is Drying Up on Main Street You would think that in Houston, Texas,

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