Brief Notes on Finance Management

Dr.  S.  Maurer,  
MBA Professor

Having an IVA is less embarrassing and financially debilitating as bankruptcy.

Timës Interest Earned is calculated as follows: Earnings Before Interest and Taxes / Interest Expense .  EXAMPLE — Earnings Before Interest Taxes is $ 100,000 and we have $ 10,000 in Interest Expense.  Times Interest Earned is 10 times,  $ 100,000 / $ 10,000.  We are able to cover our interest expense 10 times with operating income.

We can refer to the Statement of Cash Flows for operating cash flows.  Therefore,  the Ratio of Operating Cash Flow to Current Debt Obligations is calculated as follows: Operating Cash Flow / [Current Maturity of Long-Term Debt + Notes Payable] EXAMPLE — We have operating cash flow of $ 100,000,  notes payable of $ 20,000 and we have $ 5,000 in current obligations related to our long-term debt.  The Operating Cash Flow to Current Debt Obligations Ratio is $ 100,000 / [$ 20,000 + $ 5,000] or 4.0.  We have 4 times the cash flow to cover our current debt obligations.

The private agreement of an IVA means you have great piece of mind whilst paying off your debts.

Generally,  management tends to prefer equity financing over debt since it carries less risk.

Factors to Consider when Choosing a Credit Card.  APR - when choosing a credit card,  one factor you need to look at it APR.

I want them to be thinking about the impact their numbers will have on the lives of their fellow employees.  I want them to know that people will be raising families based on the sales that our salespeople say they can deliver.

And more than ever,  enterprises are relying on procurement and supply management functions to deliver the cost savings.  

Alerting management to enterprise policies that are creating strife and suggesting changes.

Buy-out must be capable of supporting an appropriate funding structure.

The pride,  the desire to win that makes them dig down deep and pull off the great play when you need it.

Days in Accounts Receivable is calculated as follows: 365 or 360 or 300 / Accounts Receivable Turnover EXAMPLE — If we refer to our previous example and we base our calculation on the full calendar year,  we would require 32 days on average to collect our receivables.  365 / 11.  5 = 32 days.

Return on Equity is calculated by dividing $ 60,000 by $ 300,000 [average shareholders equity which is $ 315,000 + $ 285,000 / 2].  This gives us a Return on Equity of 20%.  For each dollar invested by shareholders,  20% was returned in the form of earnings.

The reality of business determines when you receive,  or let go of,  your cash.

The financial Pundits of the banking sector have discussed diverse range of subjects and issues,  and have arrived on four main themes for a better credit risk management.