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Business Financing: The Analysis Of Monetary Flows And Financial Indicators Of The Business Plan For The Potential Investor. (part 2)

What is ?a pure monetary flow??

The pure monetary flow is one of the basic indicators applied to an estimation of financial condition. It characterizes a difference between positive and negative monetary flows (receipt and an expenditure of money funds) and allows specifying in many respects financial balance and rates of increase of market value of the enterprise.

The pure monetary flow settles payments for a certain interval of time (accounting period).

Enterprise financial services are recommended to count a pure monetary flow not only at drawing up of business plans or in other obligatory cases, but also after each accounting period. It will allow supervising constantly situation and in due timing in appropriate way to react to those or other changes.

Project performance indicators:

One of the basic performance indicators of any project is the pure discounted income (Net Present Value, in abbreviated form NPV); this indicator sometimes is also called as net present value or the pure resulted income. It represents the saved up discounted effect in an accounting period. For calculation of the given indicator different techniques can be used.

One more important performance indicator of the project is the internal return rate (internal rate of return, in abbreviated form ? IRR). This indicator can be called also as internal rate of discount or internal rate of profitability. It is such rate of discounting at which the pure discounted income is equal to 0.

At a project performance evaluation of such indicator, as a time of recovery of outlay of investments (payback period, in abbreviated form ? PBP) is used also. This indicator represents the minimum period outside of which the sum of the saved up discounted incomes exceeds the size of initial investments. In this case the pure discounted income accepts positive value and further remains positive.

Speaking about project performance indicators, it is necessary to mention such indicator, as debt coverage ratio (debt service coverage, in abbreviated form ? DSC).

It settles payments for each period of planning under the following formula:

The listed indicators are reasonable for analyzing not only at original conditions, but also to predict their dynamics at those or other deviations from rate, in particular ? to estimate with their help possible risks.

Important rules of business planning

1. Create the review of tasks. Before to start attachment of tasks by concrete time try to see all picture entirely: tasks, terms and interrelations between separate tasks ? further it will allow to plan more correctly them on time and under the relation to each other.

2. Place priorities. Having constituted the list of all tasks place them in decreasing order of the importance from the point of view of an object in view and include them in the plan taking into account this position ? then even if you won’t have time to make everything then the most important execute.

3. Be guided by principles of flexible planning, remembering that the plan is not dogma and it can be changed depending on circumstances. Therefore it is important to hold such plan before eyes always to have possibility to carry out that task for which the opportunity was presented.

The times when governments have been showering people with all sorts of grants have passed. At least for a while. But that does not imply that you should forget the idea of getting small business grants.

Everything is possible with smart approach; small business grants including.

Read this blog for more helpful tips about grants, how to apply for grants, grant samples, ups and downs of the grants. This information will help you to get small business grants or any other grants faster.

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