Financial Intelligence, Revised Edition: A Manager's Guide to Knowing What the Numbers Really Mean
Joe Knightamazon.com
Financial Intelligence, Revised Edition: A Manager's Guide to Knowing What the Numbers Really Mean
Sales ÷ Working Capital. This critical ratio shows the stretch in your working capital. (Working capital is current assets—cash and accounts receivable—minus current liabilities.) Working capital supports sales. With too little working capital, you grow yourself to bankruptcy. Typically, each dollar in working capital supports eight dollars in sale
... See moreJames A. Belasco • Flight of the Buffalo: Soaring to Excellence, Learning to Let Employees Lead
Inventories are especially important to watch in manufacturing and retail firms, and their value on the balance sheet should be taken with a grain of salt. Because of the way inventories are accounted for, their liquidation value may very well be a far cry from their value on the balance sheet. Use your common sense when judging this:
Pat Dorsey • The Five Rules for Successful Stock Investing: Morningstar's Guide to Building Wealth and Winning in the Market
Track on a less frequent (semiannual/annual) basis (primarily for the banker): • Current Ratio (Current assets ÷ current liabilities). This short-term solvency ratio tells you (and your banker) whether you have the short-term funds to pay your short-term liabilities. Ratios of 2:1 are considered good. That means there are two dollars in current ass
... See moreJames A. Belasco • Flight of the Buffalo: Soaring to Excellence, Learning to Let Employees Lead
We have shifted from an industrial economy to an information economy, yet the investments in information assets aren’t recognized in financial statements. They are expensed instead of capitalized. It’s beneficial for investors to change accounting to capitalize intangible assets, but incentives for corporate managers and auditors make it unlikely t... See more