May 18, 2021
Financial ratios are quantitative measures used to assess the performance and the overall financial health of a business. The end goal of using ratio analysis is to improve the decision making process....
February 17, 2021
2020 will certainly be a contender for one of the most extraordinary years in our lifetimes. The COVID-19 pandemic (and the ensuing shutdowns) has had a devasting effect on a large number of businesses. Others have been lucky enough to survive, and others even thrived. What the pandemic has taught, if anything, is the need to adapt, be in tune with our finances and adapt some more. Read more...
September 20, 2020
State and local restrictions continue to put an unprecedented amount of pressure on businesses. Some companies have already shut down while others are struggling to keep the lights on (unless a certain power company pulls the plug, but that’s a different story). All this pressure puts a spotlight on how quickly your company is generating and collecting cash. The Operating Cycle The first important financial metric is called the Operating Cycle. This is particularly useful for companies that sell products (rather than...
June 26, 2020
There’s no denying it, we’re living through a period of extraordinary uncertainty. This state of affairs has many business owners thinking about how their businesses will be affected. Read more ...
May 11, 2020
The devastating health, social and economic impacts of the COVID-19 pandemic continue to dominate our lives. Even a casual observer of the stock markets has witnessed the extreme volatility and generally lower public company valuations since February’s peak....
January 22, 2020
The holiday season has past us again, and after family visits and turkey dinners, it’s time to be reflecting on last year’s performance and how to maintain or improve profitability. 2020 brings more challenges to Californian business owners: Minimum wage increases; New privacy laws for businesses operating in California; Assembly Bill 5: Status as Employee or Independent Contractor; and Employment Law changes covering such things as: Leave and Benefits; Discrimination and Harassment and Occupational Safety and Reporting. As we asked last...
August 6, 2019
Dear readers, Today's post features an article by Alina Niculita, CFA, ASA. I was about to write a post on the same topic, and she summed it up perfectly. Click here for Alina's other articles. This post first appeared in the Portland Business Journal on July 12th, 2019. Myths and truths about business valuation While most people understand real estate appraisal, the same cannot be said about business appraisal or business valuation. Real estate appraisal makes sense because it puts a price on houses...
June 24, 2019
Did you know that 70% of all businesses do not sell? Only about 30% of family businesses get handed down and less than 50% of businesses with revenues between $10 and $50 million in revenues sell. These extraordinary numbers should be a wakeup call to business owners. Reasons Businesses Don't Sell There are many reasons why businesses do not sell and common ones include: • It’s easier for the owner to liquidate the assets of the business rather than try to sell a...
January 2, 2019
The holiday season is upon us again, and in between family visits and turkey dinners, we may be reflecting on this year’s performance, how to improve profits and thinking what 2019 may look like. Most large corporations have been engaged in year-end planning and review activities, so why not you? It’s a good time to ask yourself, how is this year’s performance against your budget for the year. If you didn’t build a budget for 2018, then how do you measure...
August 3, 2018
For many business owners, the majority of their net worth sits in the value of their business, and for many there is no concrete exit strategy. It is common for business owners to view their business primarily as an income source (perhaps for family members as well as themselves), a job, or an “ATM,” rather than what it really is: an investment, and probably their most valuable asset. The same business owners may spend time managing their investment portfolios and/or...