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Know your business’s financial health by understanding two key figures: operating income and net income. Use them to tweak your strategy, check how you’re doing, or show off your financial health to investors and lenders. Here’s a straightforward guide to help you, the small business owner, get the hang of operating and net income. This
Read moreProfit margin, a key indicator of a company’s financial health, is calculated by dividing net income by revenue and expressing the result as a percentage. This metric highlights how effectively a company converts sales into profits. This guide will help you understand how to calculate profit margin and how to interpret it. This guide is
Read moreFinancial ratios give you tools to understand your business in a simple, direct way. While they don’t give a complete picture of your business, they’re very useful to, outline strengths and weaknesses, gauge financial health & evaluate profitability. This guide is also related to our articles on understanding the return on assets formula, how do
Read moreYou’ve found our guide to understanding, measuring, and improving Return on Assets! Return on Assets (ROA) is an important financial metric that measures a company’s ability to generate profit from its assets. Understanding and optimizing ROA can impact your business’s efficiency and profitability, making your business more attractive to lenders, investors, or buyers. In this
Read moreAccrued expenses are money that your business owes but hasn’t paid yet. These could be bills or wages that you need to pay in the future. They are important for understanding your business’s real financial situation, even if the cash hasn’t moved yet. This guide helps you recognize and manage these expenses simply and clearly
Read moreNet 30 payment terms offer a flexible yet structured way to manage payments and receivables. When you issue Net 30 terms to customers, it means they have 30 days to pay you. Vice-versa with vendors, if your payment terms are net 30, you have 30 days to pay your bill. This article will show you
Read moreThe break-even point is where your sales equal your costs no profit, no loss. It’s crucial because it shows how much you need to sell to start profiting. The formula is: Break-Even Point (in sales units) = Fixed Costs / (Selling Price per Unit – Variable Cost per Unit) But what does it mean and
Read moreRunning a small business means keeping a close eye on your money – both what’s coming in and going out. Without this, you might run short on cash or miss chances to grow. Bank reconciliation is your go-to tool for staying on top of your finances. This guide will make bank reconciliation simple, showing you
Read moreThis guide talks about a less known but handy way to do your accounting: the modified cash basis. It doesn’t matter if you’re well into your business journey or just starting; knowing your options for keeping track of your finances is crucial. This guide is also related to our articles on cash vs. accrual accounting,
Read moreJust as every ship captain needs a map, every business owner needs a Chart of Accounts (CoA). It’s your financial map, guiding you through the complexities of your business’s financial landscape. The Chart of Accounts is pivotal for recording, organizing, and reporting your business’s financial transactions. This article is related to other concepts such as
Read moreHere is our list of the best eCommerce platforms. Ecommerce platforms are content management systems (CMS) and website software that allow users to buy and sell products online. Examples include Squarespace, Shopify, and Wix. The purpose of these platforms is to allow businesses to fully manage their sales and marketing operations. These ideas are similar
Read moreHere is our list of the best fractional CFO companies. Fractional CFO companies, or chief financial officers, are highly skilled finance leaders who provide business leaders with strategic financial and operational support for their companies. Fractional CFOs typically work on a part-time or per-contract basis. The purpose of this list is to provide high-rated fractional
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