Do You Wanna be Wealthy? Then Start Doing Financial Planning Via Correct Methods

1. Do You Wanna be Wealthy? Then Start Doing Financial Planning Via Correct Methods Financial planning is the strategy of putting out the ideas for firm to achieve a goal. All is to become financially powerful. By making financial planning it is possible to reach at exact decisions that will help to bring the investment value to the highest levels. Despite these conditions, they should ask themselves questions like: ● ● ● What should I do? How should I do? How can we succeed? Tools that can be used to make free financial planning services by self: ● ● ● ● ● ● Balance sheet and income (loss) table Rate analysis Pro Forma income table used for future profitability calculation method Break-even analysis to calculate the level of sales required to meet all costs of a firm Cash flow analysis, also known as budget Resource alternatives that the capital needed by the firm can sustain Preparing and analyzing balance sheets and income statements are the most crucial points for successful financial planning. Thus, looking for best financial planners is also a good option to make this work easy. However, those who have marvelous acknowledge about these concepts, can focus on "ratio analysis" instead of hiring best financial planners. Ratio Analysis - Key To Increase The Revenue Ratio analysis gives the right performance of a firm and the ability to compare the performance to other organizations in the sector. Below is a general overview of the rates used basically. These rates are used for the cash position.

2. Current rate: The most commonly used rates. It analyzes whether short-term debt will be covered by short-term assets within a safe margin. It has the formula: Current Ratio = Total short term assets / Total short term liabilities Note: Sectoral characteristics may vary according to criteria such as typical characteristics of work, but it should not fall below 1 in an acceptable standard. Acid test rate: Is used to measure the liquidity status of a firm such as the current ratio. It is calculated using the following formula: Acid test Ratio = Total Short Term Assets - Inventories / Total Short Term Liabilities Receivable Speed: Indicates the performance of a firm's receivables collection. If the receivables cannot be collected at a certain rate, the liquidity situation of the company may be damaged. The following formula is found to calculate Receivable Speed: Daily credit sales: Total credit sales per year / 365 Turnover of receivables = Total receivables / Daily credit sales Short-term planning generally involves budgeting with profit planning. Long-term planning, on the other hand, covers targets for three to five years, mostly in the form of strategic objectives, increasing sales and maintaining profitability. Be it a short-term or long-term planning, for the right planning a person cannot trust free financial planning services. Best financial planners can provide much better and appropriate solution to achieve a financial goal.