Recent Articles

Current Assets

A section of the Assets side of the balance sheet. It refers to cash and cash equivalents such as receivables, inventory, and investments.

Working Capital Management – Production and Sales Flow

06/24/2017

There is no single management style to address the multitude of working capital cycles existing in the various business sectors and the underlying industries.   Taking raw resources and turning them into consumer goods has different time frames [...]

Current Ratio

02/22/2017

The current ratio is an inappropriate relationship to use or rely on in small business.   The ratio is best suited for large publicly traded organizations.   This article explains the basic formula for the current ratio, how to identify the ratio [...]

Working Capital Cycle

02/13/2017

The college textbook definition of working capital is current assets minus payables and accrued expenses.  The term explains the dollar value of flexibility a business operation has to take advantage of immediate opportunities or endure sudden or [...]

EBITDA – Buyer Beware (Case Study)

02/12/2017

In the article EBITDA the fundamentals of Earnings Before Interest, Taxes, Depreciation and Amortization were introduced.   In general EBITDA is commonly used with the market comparable valuation approach.   In that article it was illustrated how [...]

Working Capital Management – Fundamentals

01/01/2016

Working capital management is a function of finance whereby management ensures adequate cash is available to meet operational needs over the typical working capital cycle.   The underlying elements of working capital management include 1) [...]

Working Capital

10/20/2015

Cash is the lifeblood of every business. Without cash a business operation can come to a standstill. Cash is one component of working capital, a term referring to current assets (Gross Working Capital) less payables and accrued expenses. The term [...]

Perpetual Inventory

10/10/2015

Most small businesses use the annual inventory system to determine ending inventory value. Any adjustments are to the income statement inside the cost of goods sold formula. This is acceptable if management only wanted accurate financial statements [...]

Tangible and Intangible – Business Definitions and Use

11/03/2014

Tangible and intangible are terms with several different meanings.  A lot of well educated folks have a difficult time providing an all inclusive definition.  Someone once described tangible as ‘something that can be burned’.  Well, land is [...]
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