EBITDA Unpacked: Understanding This Important Financial Performance Indicator
To keep a close eye on the financial health of your small business in Missouri, it is wise to pay attention to a number of performance indicators. One highly important measurement to watch is known as EBITDA, which stands for earnings before interest, taxes, depreciation and amortization. This figure can help you better understand the long term earnings potential of your small business. You must know how to calculate and use the EBITDA, plus avoid its potential pitfalls, to b
Learning About Operating Leverage – And How It Helps Your Business
Operating leverage is your company’s buffer against judgement and calculation mistakes, including errors in sales forecasts. Your operating leverage figures directly relate to your fixed and variable expenses, sales numbers and profit margins. Keeping an eye on your leverage calculations help you maximize revenues and minimize risk factors as you focus on improving your small business operations. Learn all you can about this important figure to protect your small business thr
Debt vs Equity as sources of capital for my small to medium sized business
To begin your journey as a small to medium sized business owner, you may need to secure $3,000 to $30,000 in starting capital. As you establish your company, you will need to have these funds available for your initial expenses, including product development and employee acquisition. If you do not have the assets available to cover these costs, you may need to source your seed money from debt or equity based funding options. Understanding the similarities and differences betw
The difference between a gross margin and a contribution margin
You can gauge the success of your company operations, and facilitate continued growth, by generating monthly or quarterly profit and loss statements. Two key metrics revealed in a comprehensive profit and loss statement are gross margin and contribution margin figures. Since these two metrics each provide very different information about your small business operations, you must understand how to calculate and utilize these figures to ensure the financial standing of your comp
Accounting Basics: Income Statement, Balance Sheet and Statement of Cash Flows
Your financial statements provide all of the performance metrics you need to successfully improve your small business operations. When you optimize your operations, you give your company a solid chance of continued profit growth through the years. To generate and utilize the performance reports you need, you must understand the finer nuances of the three most important financial documents, the income statement, balance sheet and statement of cash flows. Once you have a workin
Understanding The Difference Between Profit and Cash Flow
To keep your small business running through the years, you must generate a profit and maximize your monthly cash flow numbers. Although these terms are related, their overall impact on your business operations varies considerably. As you work toward stability and growth in the business world, it pays to completely grasp the differences between profit and cash flow – and their individual impact on your operations in Missouri. Profit Elements The total price of your products mi
