¶ … small size business owner has to continually assess the status of the enterprise relative to both itself (as evolution in time), as well a relative to the industry, in order to identify its current status and position. One important means in which the economic agents come to conduct this assessment is represented by the financial status of the company, revealed through the lenses of financial ratios. Some notable examples of financial rations to be considered by small size economic agents in their assessments include:
Liquidity ratios, such as the quick ratio or the current ratio, which assess the company's ability to pay its debts
Asset turnover ratios, such as the receivable turnover or the inventory turnover, which assess the company's ability to use its assets to generate revenues
Financial leverage ratios, such as the debt to equity ratio, which indicate the status of the company's capitals
Profitability ratios, such as the gross profit margin, the return on assets or the return on equity, which indicate the ability of the firm to use is resources to generate profits (Net MBA, 2010).
Aside from these ratios, larger size companies would also focus on the dividend policy ratios, such as the dividend yield or the payout ratio, which assess the company's use of equity and its repayment, as well as future (Net MBA, 2010). The ratios used by the small and larger size companies are virtually the same, with the difference that a larger size company will be interested in market power and competitiveness and will compare the ratios with those of the industry, whereas a small size entity will be focused on its evolution through time and would compare the ratios from one year to the other.
2. Debt financing
Upon the enlargement of the capitals, the economic agent has the option of borrowed capitals vs. equity financing, with each of these revealing both advantages as well as disadvantages. At the level of debt financing, this has the main disadvantage of requiring collateral and other guarantees as solicited by the bank; then, it necessitates sustained and regular payments,...
This means that you must continually monitor and communicate about possible changes, pertaining to the overall scope of the threat. Once this occurs, is when an entity will have an effective security procedure that will adapt to the various changes that are taking place. This is significant, because this information can be used to corroborate the overall nature of security threats that could be faced by the SME. Where, this
The existence and specialization of these three competitors materializes in the need for Creativity Sure to excel in the offering of the three types of products and services offered by challengers Karina Advertising, Falling Agency and Dorna PLC. 4.2 PEST Analysis Political forces: The development of a full legislation within the advertising field has yet to become a complete process. Recent efforts have however limited the operations of advertising campaigns in
Video Tape and Disc Rental Rentals Catalog/Mail Order Retailing Health and Personal Care Stores Retailing Table 2: Comparisons of Most Risky Small Business (BizStats.com, cited by Telberg, 2003) An Engine of Economic Growth More and more, Craig, Jackson and Thomson (2007) argue, policymakers perceive the small business sector "as a potential engine of economic growth. Policies to promote small businesses include tax relief, direct subsidies, and indirect subsidies through government lending programs." These authors stress that encouraging lending
In this context, the learning curves followed by the collective of entrepreneurs place that collective of entrepreneurs within the still larger setting of the global marketplace. Taylor and Asheim refer to an economic geography that is more than merely a map of where economic activities take place (Taylor & Asheim, 2001, p. 315). A modern learning organization integrates itself on virtually every conceivable level. Much as its individual members make
Social media forces those who use traditional marketing and advertising to re-evaluate their business models and techniques. Despite such rave reviews regarding the use of social networking as a marketing platform, many companies have not readjusted their strategies to incorporate such elements into their execution of marketing techniques. This means missed opportunities and cost savings. Even worse, many SMEs are continuing to spend too much money on the execution of
Small Medium Enterprise Set Up Mission statement Business goals Marketing Market research (location and size of market) Market segmentation (which segments will you target) Marketing plan Products/services and target market(s) Placement Promotions and advertising Pricing policy Evaluation of marketing Operations Legal and licensing requirements Organisational structure and staffing Insurance and security issues Business premises Equipment required Production process Critical risks/contingency plans Financial projections Capital expenditure forecast Sales forecast Cash flow forecast Projected profit and loss statement Owner's personal expenses (continued on next page) Environmental responsibility and Eco-sustainability Implementation timetable Conclusions and future directions Executive Summary Business Plan Structure The business plan
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now