Finance

Sources Of Funds

Does a business start with the product or the order? Which comes first the service or the customer? It's the old chicken and the egg debate and there is probably no universally correct answer. Regardless of where you stand on which came first for a business, there is no disagreement that money is the lifeblood of all businesses. Without cash for...

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Leveraged Buyout

Back not too many years ago it was referred to as "bootstrap financing" or simply getting a loan to buy a business. Now referred to by the acronym LBO, the leveraged buyout has become one of the most exciting and popular investment vehicles of the decade. A leveraged buyout involves financing the acquisition of a business with a small equity...

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Buy Out

The company's current Chairman founded the business eighteen years ago. He has seen it grow to slightly more than twenty million dollars in gross revenues. At age 69, he currently retains 68% ownership in the company. He wants to retire and sell his interest in the business. The company's growth has been financed primarily with debt. Current debt...

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Debt Financing – You Can Bank On It

Small and growing businesses are invariably undercapitalized and will need to borrow funds at sometime. Debt financing creates financial leverage for the business owner that can be rewarding as the business prospers. Financial leverage is the borrowing of funds and investing them in your business at a higher rate of return than the cost of the...

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Watch The Cash Flow

USX Corporation records a loss in excess of several hundred million dollars. The Bank of America and other corporate giants do the same. Not so long ago, the former International Harvester Company, now Navistar, recorded nearly a 1.5 billion dollar loss on a sales volume of approximately five billion. The independent businessman shakes his head...

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Understand The Cost

"There is a great difference between knowing and understanding: you can know a lot about something and not really understand it." Charles F. Kettering The difficulty encountered in forecasting future revenues is often a major stumbling block in the decision making process. But revenues are only one part of the simple equation that measures...

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Reading Your Financial Instrument Panel

Whether your business is big or small, whether you are an investor, owner or manager, you will soon be looking at year end financial statements. You may know the business inside and out, but the annual financial statement can often look as complicated as the instrument panel of a jet airplane. Assume for a moment that your business is an airplane...

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Three Steps To Effective Budgeting And Forecasting

Budgeting and forecasting have never ranked high on the list of favorite tasks for the small business owner or the major company executive. However, if planning and controlling are two of the basic tasks of management, budgeting and forecasting must be done. The "three step method" is a procedure that will get the job done for the small business...

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