Financial analysis ratios

When you are seeking for capital to start or improve your business, it is important to know about the major financiers of financial terms used and what does it mean in real terms. I have a brief overview of the terms of financial institutions to assist you in your efforts:

Cash Flow: This is the life blood of the company. The cash flow generation of the funds available to pay the costs and returns to the investors or creditors. Cash flow reflects the timing and amount of inflow and outflow of money.

Debt or Equity Capital: Describes what kind of beer(capital) you are looking for. Guilt(Debt) is usually in the form of a loan, promissory note, mortgage or other legal relationship. Share capital of the company.

Rate of Return (Yield): The primary objective of investing your money or other people to earn money is a return of capital. This figure shows that the profit or interest of investors or lenders available for investment. Before approaching to any other source of funds, you should know what kind of odds they are made.

Margin: The difference between revenue received and costs and is usually expressed as a percentage or amount. Gross margin is the difference between total sales and total cost of goods sold. Net margin is the difference between total sales and all costs of manufacturing products, including regulatory, tax and other expenses cost.

Working Capital: Typically, this value represents the total assets that is converted into cash within a year net of liabilities that must be paid within one year.

Financial Statements: The reference used for communication operation (which the income and expenditure and income or loss shows) and balance (which the assets, liabilities and equity ownership reflects). Other financial reports, including cash flow analysis, balance sheet, sources and uses of capital, financial analysis and relationships are also included.

Collateral: This is property accepted as a secondary source of repayment of a loan or other obligation.

Leverage: The ability to borrow a larger amount of money than a company has invested in property or assets.