Your credit card is a source of interest-free loan. But, this will work, if and only if you think of your credit card as a tool for personal cash flow management –rather than additional cash in your wallet.
It often happens that a purchase has to be made before your expected cash has become […]
Credit Cards, so that they do not become a heavy burden (you can end up paying as much as 30% on interest & penalties), have to be managed just like any regular bank loan.
It is important to keep a proper mindset. Do not think of your credit cards as additional cash in your wallet. […]
Any company that is not conservative in the reporting of its revenues and expenses is engaging in “accounting noise.”
Proper financial statements should be able to provide the following information about the business:
Feedback. The information from the Financial Statements should be able to explain past events, confirm or adjust expectations / predictions, show the results of […]
The earnings of a business (corporation and small business) or of an individual or household (personal finance) are the difference between the revenues and expenses during an accounting period.
The difference between cash receipts and cash disbursements cannot be considered as earnings.
The revenues should include not only the cash received during the period, but also the […]
Most small businesses, usually because there is no accountant and the proprietor himself does the accounting, stop at the Income Statement. Because most or all of the transactions are in Cash, the Income Statement is also made to serve the purposes of a Cash Flow Statement. However, you cannot really tell the true […]
In an Income Statement, if you are selling on credit, the Sales figure will not be all Cash (i.e., some in Accounts Receivable). You may not have paid all your Expenses yet (i.e., some in Accounts Payable). The Cash Flow Statement will show you what you have actually received and paid out in […]
Consider the case of an individual or household with no financial or physical Earning Assets, whose only Earning Assets are Manhours, where the Salaries or Professional Fees have related Direct Costs which do not leave sufficient Cash to meet Expenses:
In the previous post, we started by first looking at the possibilities of maximizing Manhours or […]
Considering the case of an individual or household with no financial or physical Earning Assets, whose only Earning Assets are Manhours, where the Salaries or Professional Fees have related Direct Costs which do not leave sufficient Cash to meet Expenses:
What are the possible options for solving the financial problem?
The options start with your Manhours, your […]
A personal or household Budget is useful in ensuring that you or your family do not live beyond your means. However, a Budget is not adequate in clarifying the financial issues confronting an individual or household. Personal Financial Statements will make clearer where the financial problems lie and how best to solve […]
The Personal Cash Flow Statement of an individual or a household with no financial or physical Earning Assets (whose only assets are Manhours) will look as follows:
Inflows will come from Salaries &/or Professional Fees. If he takes out a Loan to cover Direct Costs & Expenses that cannot be covered by Salaries or Professional […]
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