Business risk Archives | Numbers Knowhow https://numbersknowhow.co.uk/tag/business-risk/ Cash flow and financial planning made easy Thu, 21 Mar 2024 13:52:16 +0000 en-US hourly 1 https://wordpress.org/?v=6.9.1 https://numbersknowhow.co.uk/wp-content/uploads/2022/02/cropped-Favicon-Cog.png Business risk Archives | Numbers Knowhow https://numbersknowhow.co.uk/tag/business-risk/ 32 32 The Mistakes In Borrowing Money https://numbersknowhow.co.uk/mistakes-in-borrowing-money/ Tue, 12 Dec 2023 12:14:00 +0000 https://numbersknowhow.co.uk/?p=11589 The post The Mistakes In Borrowing Money appeared first on Numbers Knowhow.

]]> How Operational Gearing Affects Business https://numbersknowhow.co.uk/how-operational-gearing-affects-your-business/ Mon, 17 Apr 2023 07:01:48 +0000 https://numbersknowhow.co.uk/?p=11593   The topic of this blog is how operational gearing affects your business. In a nutshell, it shows much risk you have and affects your survival, growth, and prosperity. But let’s take a step-by-step approach and start with operational gearing first. Operational gearing explained When we say operational gearing we mean the effect that fixed costs can have on the relationship that exists between sales and your operating profits. If your business has no operational gearing, then profits would rise at the same rate that sales increase. This blog (and video) will help you understand how this concept works and why it’s important to your business. We’ll also share our FREE online calculator which shows you quickly what your operational gearing looks like. Moreover, it allows you to play with options for managing your company’s operational gears, so they do not get in the way of profit growth. You can also see operational gearing as an indicator that measures the degree to which an increase (or decrease) in revenue affects your profits. The type of costs your business has To understand how operational gearing affects your business, we have to look at the costs that your business has. Naturally, it […]

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]]> How To Use Financial Ratio Analysis https://numbersknowhow.co.uk/how-to-use-financial-ratio-analysis/ Tue, 11 Apr 2023 08:46:28 +0000 https://numbersknowhow.co.uk/?p=11523   Financial ratio analysis and how to use it is featured in your Numbers Toolkit. Business owners, analysts, as well as investors all use it. I have a vlog about what financial ratio analysis includes and how it’s used. In it, I talk about the four common areas used in financial ratio analysis, or quadrants as I refer to them there. They are: Profitability ratios, Liquidity ratios, Efficiency ratios, and Risk and return ratios. The video showcases and interprets those ratios with a worked example. So, if you want to find out more (and you’re a visual learner) click on the video below to really grasp this. Financial statements and their limitations Your financial statements, profit and loss and balance sheet show your profitability and financial position. These accounts record your performance. However, they are limited in use. This is because no indication is given as to whether the results are favourable or unfavourable. For example, you wouldn’t see anything in the profit/loss figures that will tell you if those numbers are what the firm in question is aiming for. Whether the figures are satisfactory for the company remains to be the subject of analysis which will have to take […]

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