What Are The Financial Ratios That Are Important To A Small Business?
Understanding the Concepts
Professor Ingrid P. Nelson
Fin 100 Introduction to Finance
December 1, 2012
1. Imagine you are a small business owner. Determine the financial ratios that are important to the business. Compare your ratios with those that are important to a manager of a larger corporation.
As a business owner, financial understanding is something that has to be studied before you decide that you are going to open or even start a new business. Small businesses in general run the finance operations of their business in a different way than the larger corporations. Most of the small businesses must rely on the personal investors or personal resources to access money needed to be a successful business. It does not matter if it is a small business or a corporation; being a …show more content…
I would use these concepts in order to diversify the risk and receive a good return. I am not for sure as to how much was awarded before the attorney and other fees but, only about $1 million will remain. This money will be invested into different portfolios that would help to diversify the risks that I will be taken not that I have money to do that with. Taking about half of the money to invest in multiple companies that have the potential to grow and I can see where it would grow. I would buy shares; this will give me the long term investments. Now for the short term investments, about fifteen percent would be used to buy debentures; this will be done only because they will not last long since it is based on the credit strength of the corporation. Twenty five percent would be put back into the company; such as to expand or update the manufacturing business. Now as for the remaining ten percent it will be left as reserves for the company for emergency
Professor Ingrid P. Nelson
Fin 100 Introduction to Finance
December 1, 2012
1. Imagine you are a small business owner. Determine the financial ratios that are important to the business. Compare your ratios with those that are important to a manager of a larger corporation.
As a business owner, financial understanding is something that has to be studied before you decide that you are going to open or even start a new business. Small businesses in general run the finance operations of their business in a different way than the larger corporations. Most of the small businesses must rely on the personal investors or personal resources to access money needed to be a successful business. It does not matter if it is a small business or a corporation; being a …show more content…
I would use these concepts in order to diversify the risk and receive a good return. I am not for sure as to how much was awarded before the attorney and other fees but, only about $1 million will remain. This money will be invested into different portfolios that would help to diversify the risks that I will be taken not that I have money to do that with. Taking about half of the money to invest in multiple companies that have the potential to grow and I can see where it would grow. I would buy shares; this will give me the long term investments. Now for the short term investments, about fifteen percent would be used to buy debentures; this will be done only because they will not last long since it is based on the credit strength of the corporation. Twenty five percent would be put back into the company; such as to expand or update the manufacturing business. Now as for the remaining ten percent it will be left as reserves for the company for emergency