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5 ratios I use when analysing a balance sheet

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Here are 5 ratios I use when analysing a balance sheet: 1 Quick Ratio Goal: Check the solvency of a company and how fast can they repay their short term debts with their quick assets. Formula: Quick Assets / Current Liabilities (where Quick Assets = Current Assets - Inventory) 2 Inventory Turnover Goal: Measure how many months inventory do you have on your balance sheet. Formula: Cost of Goods Sold / Average Inventory Note: use the Cost of Goods Sold of the last 12 months and this ratio will measure how many months of inventory you have. For example: COGS of 100m$ / Inventory of 25m$ means that in average your inventory will last a quarter (3 months). 3 Asset Turnover Goal: Check how much CAPEX are needed for each $ earned. The higher the number, the less assets you need to make revenues. Formula: Turnover / Net Tangible Assets 4 Cash Conversion Cycle (CCC) Goal: check how many days you need to convert your cash out (for inventory in cash in (from sales) Formula: Days of Inventory...
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Understanding Product Failures – Reasons and Examples

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What is product failure, anyway? Not all failures are catastrophic where the product is pulled from the market and the company goes out of business. Most are partial or soft failures. Failure is falling short of the strategic Objectives & Key Results (OKRs) metrics set for the product. Objectives can be multidimensional and go beyond financial goals for revenue and profit, such as establishing a new competitive advantage or providing a new upsell opportunity for another product. A key component on why products fail is that management does not specifically define objectives and quantify what success looks like. If you do not define success, you are less likely to achieve it and you may not even be aware of how the product is failing. Of course, to define something properly, you need to have a good understanding of what it is not just as much as what it is. Strategic objectives to consider: Financial: Top line revenue, profit, gross margin %, cost of goods sold, cost of sales Develop...
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“The basic purpose of marketing research is to facilitate decision making process”.

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  Marketing  research is a crucial part of marketing system; it helps to refine ideas in decisions making of management by giving accurate, appropriate, and timely information. Every decision requires unique needs for information, and appropriate strategies can be evolved based on the information collected through marketing research. Too often, marketing research is considered briefly as the collecting, analysing and interpreting of data and information for someone else to use. Creative use of market information helps firms to attain and maintain a competitive advantage. Hence, marketing research is defined as input information to decision making, not simply the analysis of decisions which you took. Market research alone will not guarantee success; the clever use of market research is the key to business success. A competitive edge of the firm relies on how information is used by you than others don’t have or if doesn’t use the information. Marketing decisions contains problem...
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Various Principles Of Management and How Modern Management differs from Traditional Management

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Any principle of management is a universal and general concept for decision-making and execution. For example, while making a decision regarding the promotion of an employee, the manager may decide considering their age or rank. Whereas others may promote them based on their conduct and performance. The principle of management is based on experience and changes in the business industry, therefore these principles may not be as firm as those of science. They involve human behavior and are used accordingly in the required situation. thus, these principles change with respect to time. The birth of ICT ( information and communications technology)has made it possible for managers to spread their business organization all over the world. For example, WIPRO, whose headquarter is situated in Bangalore, has now become a popular multinational IT consulting and system integration service company. The principle of management should not be mistaken for techniques of management. Techniques of manage...
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Forms of Foreign Investments in India

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  Any investment that is made in India with the source of funding that is from outside of India is a foreign investment. By this definition, the investments that are made by Foreign Corporates, Foreign Nationals, as well as Non-Resident Indians would fall into the category of Foreign Investment. Types of Foreign Investments Funds from foreign country could be invested in shares, properties, ownership / management or collaboration. Based on this, Foreign Investments are classified as below. Foreign Direct Investment (FDI) FDI is an investment made by a company or individual who us an entity in one country, in the form of controlling ownership in business interests in another country. FDI could be in the form of either establishing business operations or by entering into joint ventures by mergers and acquisitions, building new facilities etc. Foreign Portfolio Investment (FPI) Foreign Portfolio Investment (FPI) is an investment by foreign entities and non-residents in Indian securiti...
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The process of economic development is accompanied by the transfer of population from rural to urban areas. This brings about a change in the distribution of net domestic product in favour of urban areas.

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  The World Bank estimates that about 4.2 billion people, or 55 per cent of the world’s population, live in the cities. By 2050, this number will rise to 70 per cent. Urbanisation is often seen as inevitable when a country transforms from a ‘traditional society’ to one which is geared toward ‘high mass consumption’. These familiar terms are the first and last ‘stages of economic growth’ propounded by Walt Whitman Rostow.  Often, urbanisation is also correlated with economic development. The proof of the pudding is in the eating. Already, 80 per cent of global GDP is generated in cities. There exists a positive correlation between the higher GDP per capita income and urban population (as a percentage of the total population). The level of the urban population in countries like Switzerland (73.92 per cent), Norway (82.97 per cent), US (82.66 per cent), Denmark (88.12 per cent), Sweden (87.98 per cent), Australia (86.24 per cent) and Canada (81.56 per cent) is significantly high....
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