Basics of Finance

Everyday as a businessman you have to look after financial health of your company and for the same at least you need to know basic terms of finance . Maybe I will.take more than one part to explain these to you .

Firstly as part of company we need to know how much money comes from owner ?? From sale or revenue ?? and from borrowing ??

In multiple sectors or business line which products and regions earn highest profit and which one fail to perform 

How long does it take to collect money from.customer or clients which is owe to business ( means you are giving service and expecting money in return ) This thing decided your cashflow in company .

Three Major financial statements are 

1. P & L Statement :-  overall knowing of expenditure and earning ,This is nothing but income statement .

2. Balance Sheet :- It shows total Assets and Liabilities 

3. Cashflow Statement :- Cash company generating where that cash came from and what being used for .

In later we will go more in detail .We are not professionals CA and financial advisors but not for business we should know this things .Even you can take any company or Google search items listed above it's very simple to understand .

There are more things in detailed like Profitability Ratios / Efficiency Ratios / Liquidity Ratios .Hope I will cover that also .

Keep reading and take care 


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