I’m always on the hunt for relevant info and I loved this - one of the best articles I’ve seen on this topic for a while. Here are a few paragraphs as a taster...
Businesses are established to make money. First, the business generates revenue to meet operating costs and maintain itself as a growing concern. Second, profits reward management and owners for the commercial risks involved. Financial stability and earnings power are directly linked.
Identification
Financial stability relates to the ability to pay overhead expenses, pare down debt and return capital to investors. Balance sheets, income statements and cash flow statements provide statistical measures of stability. Further, strong management and branding create goodwill that is an intangible component of value.
Benefits
Financial stability compounds to grow profits. Lenders, investors and employees are more willing to deal with financially stable businesses upon favorable terms. These favorable terms allow for expansion, more profits and greater stability.
Pretty valuable stuff, I’m sure you’ll agree! Why not check out the whole article here and share your thoughts with me afterwards: call (0407) 967-454 or email me at stephen.mitchell@billbutler.com.au.
Thanks,
Stephen
