Cash is King

A business goes bankrupt when it’s unable to meet its obligations when payment is due. Bankruptcy is caused by a shortage of cash which is not necessarily related to profitability. Profitable businesses can go bankrupt too, while companies making losses can have substantial cash. So, how do we improve cash flow? Profit versus cash flow Here are two equations to always keep in mind. Sales...
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The customer may be king or queen… But not all customers are created equal

Do you treat all customers the same or do you treat them differently? Do you know which clients generate substantial sales and more importantly, which customers generate substantial profits and cash flow? In order to determine the relative importance of your customers, rank each customer in terms of the following criteria: Sales Profitability Payment history. 1. Sales How much and how...
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Products – how many do you need and where to focus your sales efforts

Companies often believe that they require a substantial range of products to compete, but more often than not they are better off with a smaller product range which will allow for increased business and sales focus and ultimately profitability. In determining what products to sell, there are a number of questions to consider: What is the cost of manufacturing or purchasing a product? What is the...
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Financial Statements Simplified

Corporate turnaround specialists, Slatter & Lovett found that inadequate financial controls were responsible for 75% of business failures. That is, one or more of the following financial controls may be absent or inadequate: cash flow forecasts costing systems budgetary control monitoring of key performance indicators (KPIs) And even when such information existed, management may not have...
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Improving your Profit Focus with the 80-20 Rule

The Pareto principle (also known as the 80-20 rule, the law of the vital few, and the principle of factor scarcity) states that, for many events, roughly 80% of the effects come from 20% of the causes. We all know of or have heard of the 80 – 20 rule and we glibly bandy it about, yet we seldom apply the principle in our own lives or business. Look at the following and see if you recognise...
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The relative pricing of corporate bonds – Dissertation by Steven Delport

A Project Report submitted to the Faculty of Commerce, Law and Management, University of Witwatersrand, Johannesburg, in partial fulfilment of the requirements for the degree of Masters of Business Administration Johannesburg, 2004  Download the PDF here...
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