Cash Counts

Cash counts refers to the concept that ‘Cash’ is the most important aspect of business operations. Learn about how cash works and the corresponding cash cycles.

Quick Ratio – Definition, Explanation and Proper Use

Quick Ratio

The quick ratio is a formula used in business to identify the ability of a business to pay its current liabilities.  It is also known as the ‘Acid Test’ formula (ratio).  In the large markets this formula is one of the financial industry ratios used to value the stock of a corporation.  In the arena of the small business, you should only use this ratio as a means to gauge ability to pay your bills right now.

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The Different Types of Bank Loans

Types of Bank Loans

There are many different types of bank loans, each having their own respective purpose.  All bank loans are categorized into two distinct groupings; secured and unsecured loans.  Within in each category of loans there are several different sub-types of bank notes used to make a loan.  Both categories require the owner of the small business to provide a personal guarantee to ensure the loan is paid back. 

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What is Accrual Accounting?

Accrual Accounting

Accrual accounting is the preferred method of accounting for all business operations.  Any publicly traded company must comply with the principles of accrual accounting.  Small business operations can choose between cash and accrual accounting for their records.  Although cash accounting is the easiest to work with as a small business operation, accrual accounting will provide a more accurate picture of the financial status and affairs of any business operation.

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