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7 MAIN CATOGARIES FINANCIAL RATIOS

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Good day, everyone,

To compare and measure the financial health relationship of an organisation, the financial ratios are developed and used as a yardstick to ascertain its financial condition and performance.Here, I will only discuss on what are the financial ratios and its meaning. 

1. LEVERAGE FINANCIAL RATIOS

Reflect the percentage of a company’s capital structure that is made up on debt or liabilities owed to external parties, other than shareholders. It tells you the relationship between the internal fund and external debts. This ratio is computed by simply dividing the total debts of the firm by its net worth or total assets.

2. Liquidity Financial Ratios

Are used to judge a firm's ability to meet short term obligations, without disposing its long term assets. The higher this ratio, the greater the ability of the firm to pay its bills. The general and frequent used of these ratios are as follow:-

a. Current Ratio = Current Assets / Current liabilities

b. Acid-Test Ratio = Current assets less Inventories / Current liabilities

3. Operating Financial Ratios

Reflect the efficiency of the company’s operations in utilizing its resources. This comprise of Inventory Turnover (in term of days); Accounts Receivable Turnover (in term of days); Accounts Payable Turnover (in term of days) and Cash Conversion cycle etc.

4. Profitability In Relation To Sales Financial Ratios

Tells us the profit of the firm relative to sales after deducting the cost of Cost of Good Sold. Here, it indicates the efficiency of operations. Generally, a firm with high gross profit margin is much easier to survive  when its operating environment change to its disfavour comparative to those who have razor-thin margins. 

5. Profitability In Relation To Investment 

Relates to investments. One of these measures is the rate of return on common stock equity. This ratio is computed by simply dividing the Net profit after taxes less Preferred stock dividend by its net worth less Par value of preferred stock.

6. Coverage Ratios

Are designed to relate the financial charges of a firm to its ability to service them. One of the most traditional of the coverage ratios is the interest coverage ratio, that is the ratio of earnings before interest and taxes for a particular period to the amount of interest charges for the same period.

7. Solvency Financial Ratios

These financial ratios indicate the chances of a company going bankrupt. The main purpose of this exercise is to ensure that a company is not in danger of going under anytime soon. 

Note that the above yardsticks are frequently used as a ratio, or index, relating two pieces of financial data to each other. You may compare a present ratio with past and expected future ratio for the same company.By doing so, you can determine whether there is an improvement or a deterioration in the firm's financial condition and performance over time.

Trust the above discussion has given you a clear understanding of today's topic. 

Look forward to seeing you again,

Financial and Operating Ratios Survey

James Oh

Skype me at james.oh18

HOW TO HAVE QUICK VIEW OF THE FINANCIAL STATEMENT

Hi, my dearest friend,

 
This article is written with the intention to gives a guide as how to have a quick view of a company’s Financial Statements. This will make it easy to discuss with the Financial communities on the financial issues of a company.

When we talk about Financial Statements, what we are referring to is the Company’s Report and Accounts, usually found on the website of listed public companies.

1. The Auditors Report

– should be the first quick check.

This is usually found at the front of the Accounts and it has been drawn up in accordance with Generally Accepted Accounting Policies so as to give a 'true and fair' view of its financial performance. Watch out for any ‘qualifications’ which could highlight any financial problems

2. Principal Activities

Take a quick look at the Directors' report as what are the company's principal activities and the industry it is involved in. This gives you an overall view of the company and its industry where you should focus on.

4. Sales – or Turnover, Revenue.

Reflected on the Income Statement. Note its historical trend and any significant fluctuation; and the cause, if applicable.

5. Profitability 

The Gross Profit and Operating Profit, both before and after tax, will suggest whether they are selling above their costs. Whereas the percentages against their sales will give you the idea whether its profitability is increasing or declining. As such, the trend analysis may give you a good basis to predict its forecast. However, bear in mind that the historical trend will not guarantee its future performance.

 
6. Return on Capital Employed (ROCE)

Suggesting the return from what the company have invested in. The Capital Employed basically made up of Shareholders Funds (Share Capital plus Reserves such as retained profits or less Accumulated Loss whichever is applicable).

ROCE is found by dividing the Operating Profit by the Total Capital Employed or Total Assets or Net Assets. This percentage indicates to you whether its return is lower or above the interest rate.

7. Working capital position

Take a quick look of its ratio by dividing its current assets against liabilities. This will give us its liquidity position or the overall situation, i.e. stock, debtors and creditors. Its historical trends will suggest to you whether its liquidity position is improving or declining, an idea of its management efficiency to a certain extent. Above all, its cash flow and whether it able to pay its bills when due.

8. Retained profits / Accumulative Loss

The cumulative bottom line. Retained profits will be the surplus to its shareholders' fund whereas the accumulative loss will reduce its shareholders' fund. The former will allow the company to distribute out through dividend or bonus share and not the latter.

9. Gearing

The gearing ratio reflect the relationship of its debt to equity or total capital employed or total assets. It indicates to you as how many times of its debts against the capital and also the interest expense the company has to bear. As such, it give rise to the situation that it will have adverse impact should the interest rate is on the increasing trend. If the ratio is at high side, they will be answerable to the lenders. However, if it is at the low side, the question arises whether they should borrow more to invest.

10. Notes to the Financial Statements

Usually find at the back of the statement, It is rewarding and revealing to take a quick look at its Significant Accounting Policies. Look exactly at what type and nature of assets the company has, both fixed and current; long and short term liabilities as well. Directors Remuneration is of interest and other key mandatory expenses will also be found here. All these notes will usually reference  to the items in the respective Income Statement and Balance Sheets. 

Trust the above discussion may be used as a good checklist or guide as how to have quick view/ Bird eye's view of any Financial Statements.

Please share your feedback so as to make it better. Thanks and stay tune as I going to discuss in more depth.

James Oh

Skype me at james.oh18

What to Eat to Beat Knee Pain

What to Eat to Beat Knee Pain

Carried on 22-June-2009 http://www.everydayhealth.com/knee-pain/knee-pain-what-to-eat.aspx

Looking for a natural way to relieve knee pain ? You may want to tweak your diet. A growing body of research suggests that small dietary changes can add up to big benefits for knee health. “A number of foods have powerful anti-inflammatory and pain-relieving properties that may be as effective as some prescription medicines for arthritis and other types of knee pain,” says Beth Reardon, RD, MS, an integrative nutritionist and medicinal foods expert at Duke Integrative Medicine Center in Durham, N.C. Read on to learn how mealtime may be affecting the health of your knees.   Diet and Knee Pain: Go Fish The omega-3 fatty acids found in fish are natural anti-inflammatories. Calming joint inflammation can often help ease knee soreness, according to Steven Stuchin, MD, director of orthopedic surgery at NYU Hospital for Joint Diseases in New York City . In randomized clinical studies, omega-3 fatty acids were found to ease pain and reduce the duration of morning stiffness in people with rheumatoid arthritis . The best sources of omega-3s are salmon, tuna, sardines, herring, cod, and mackerel, as well as fish oil supplements. Another benefit of adding fish to your diet: “Fish is safer than anti-inflammatory medication , which may have side effects,” says Reardon.   Diet and Knee Pain: Drink Orange Juice Orange juice is a top-notch source of vitamin C, a nutrient that may guard against knee osteoarthritis. A 10-year Australian study of almost 300 middle-aged adults found that those getting high amounts of vitamin C were less likely to suffer the kind of bone degeneration associated with knee osteoarthritis. “Drinking a glass of orange juice provides about 25 percent more vitamin C than eating an orange,” says Reardon. Other good sources of vitamin C to prevent knee pain are green peppers, grapefruit, and strawberries.   Diet and Knee Pain: Eat Spinach and Onions Follow Popeye's lead and add spinach to your regime. Australian researchers found that getting high amounts of the antioxidants lutein and zeaxanthin (found in green veggies like spinach) can help relieve knee pain caused by osteoarthritis. Several studies have found an additional benefit of lutein and zeaxanthin, as they can help prevent vision-related diseases. Don't forget to add some onions to your spinach salad as well. Adding onions to salads, sandwiches, stews, and casseroles may help put the brakes on knee pain. Onions are a rich source of quercetin, a flavonoid with strong anti-inflammatory properties, says Reardon. In studies of arthritic mice, quercetin resulted in significant decreases in arthritis symptoms. Apples, red grapes, and tea are also good sources of quercetin.   Diet and Knee Pain: Order Indian Food A helping of curry could do wonders for your knee pain. That’s because turmeric, a spice used in curry and other Indian dishes, contains curcumin, a powerful anti-inflammatory. “Curcumin works similarly to COX-2 inhibitors — drugs that reduce the COX-2 enzyme that causes the pain and swelling of arthritis,” says Reardon. A 2006 Canadian study of the effects of both curcumin and quercetin found that curcumin reduced the inflammation of arthritis in animals. Quercetin (the flavonoid in onions) worked too, but not to the extent of the curcumin.   Diet and Knee Pain: Use Ginger Generously The herb ginger traditionally has been used to relieve upset stomach, but researchers recently discovered that it also reduces knee pain by decreasing inflammation. In a study of 261 patients with moderate to severe knee pain due to osteoarthritis, ginger extract significantly reduced knee pain during standing and walking. Cooking with this spice can increase the flavor of meals while decreasing knee pain.   Diet and Knee Pain: Avoid Refined Carbohydrates Some research suggests that diets high in refined carbohydrates can increase inflammation, says Reardon. She recommends steering clear of white bread, pasta, and baked goods — taking these foods out of your diet can have an added bonus of helping you drop excess pounds.   Because changing your diet is a relatively easy step, it makes sense to try some — or all — of the foods listed above. You may find some relief from knee pain and get some added health benefits to boot.

 

5 WONDERFUL BENEFITS OF NETWORKING

5 WONDERFUL BENEFITS OF NETWORKING

Hi! Everyone,

Further to my previous article, NETWORKING IS WEALTH, today I am going to dwell with its concept and its benefits in more details. The most fundamental question arises here is "What is Networking?" Networking is the practice of making contacts and exchanging information with other people, groups or institutions. Usually, networking occurs with other people who have interests in similar areas. The goal of the networking relationship may be to further your personal employment opportunities or to cultivate new clients or the expansion of business relationships.

Obviously, Networking is always in conjunction with your career or business. Below are some of the benefits which we can obtain from it:-

1.Forging beneficial relationships: 

By doing this, you may pool and share your resources to a much greater extent for mutual benefits. Hence, it will enhance the relationships so as to build the trust amongst OURSELVES, SO TO SPEAK.

2. Developing and sharpening your knowledge & skills: 

Interacting with new people especially in your field may help you  see things in different perspective. Alternatively, you may also sharpen and polish your skills even better through interacting with each other within your network. You may learn both mistakes and successes from others.

3. Additional resources:

Networking contacts may also be from experienced professionals with wealth of knowledge that you may not have. They have, most probably different experience from you, and have different view points from you as well. In this sense, prosperity through diversity is applicable here.

By building a strong network, you automatically have people “on your side” that will help you spread good information about you and your business - Who doesn’t want this ?

4. Building and maintaining your personal brand: 

In addition, Networking also may help you to establish your personal brand both online and offline. Hence, people will get to know you and trust you much earlier and more willing to look for your guidance and advice.

5. Boosting your self-esteem: 

Your self-esteem will also be boosted through socialization and make you well-respected in your field. You tend to be much happier to have a network of individuals that can help you out and vice versa. Hence, make your business and brand grow further.

Trust you are able to see its benefits and work toward establishing your network. In this respect, you are always welcome to join my social network.


Please share your feedback here. We are glad to hear from you,

To your success in establishing your network,

James Oh

Skype me at james.oh18

Used vs Loved

USED vs. LOVED

While a man was polishing his new car, his 4 yr old son picked up a stone and scratched lines on the side of the car. In anger, the man took the child's hand and hit it many times; not realizing he was using a wrench.

At the hospital, the child lost all his fingers due to multiple fractures. When the child saw his father.....with painful eyes he asked, 'Dad when will my fingers grow back?'

The man was so hurt and speechless; he went back to his car and kicked it a lot of times. Devastated by his own actions ...sitting in front of that car he looked at the scratches; the child had written 'LOVE YOU DAD'.

The next day that man committed suicide. . .. Anger and Love have no limits; choose the latter to have a beautiful, lovely life..... Things are to be used and people are to be loved, But the problem in today's world is that people are used and things are loved...

Be sure to keep this thought in mind: Things are to be used, but People are to be loved ... Be yourself....This is the only day we HAVE. Have a nice day

Watch your thoughts; they become words. Watch your words; they become actions. Watch your actions; they become habits. Watch your habits they become character; Watch your character; it becomes your destiny.

I'm glad a friend forwarded this to me as a reminder..
If you don't pass this on to anybody, nothing bad will happen; if you do, you will have ministered to someone.


Stay FAITHFUL and be GRATEFUL