Tag Archives: Budget

How Is Internal Rate of Return a Key Element In Making Financial Decisions

Contributed article in our business series. Enjoy! – Kimberly

Every business aims to achieve a considerable growth rate, and it can be scaled by making the right business decisions. Growth can be expected out of a change in plan i.e. diversification of business activities. This can be achieved by investing in new projects and new developmental opportunities.

What affects this crucial decision is the Internal Rate of Return (IRR) of the enterprise. It is the effective annually compounded rate of return at which all the cash flows associated with a particular investment comes to zero. Let’s have a quick view at how IRR helps you in making life-altering business decisions.

  • Helps in choosing the best project

An organization can have several project ideas to invest in, but it’s wise to select the best fitting investment option which yields better results. IRR helps in analyzing all the project values and provides you with an idea of expected yield from it. An ideal IRR exceeds the cost of capital of the company.Continue reading→

Why Finance Management is So Important in Business

Contributed article in our business series. Enjoy! – Kimberly

Every major business will have to handle money. Fact. Therefore, it’s vital that businesses manage their finances finely to ensure that they can pay for any expenses and that no money is being lost. Sometimes, managing finance can be tricky, but with a lender for short term loans available in every corner of the Internet, finance management can be made so much easier with the click of a mouse.

Bookkeeping

This is simply the process of keeping up to date with the organizations daily financial activities, which includes sales and composing these into balance sheets and reports. By carrying out this process on a frequent basis, you’re receiving useful feedback that can help you alter any of the strategies that you have in process at the company. For example, if your sales income is considerably low, you can take action to ensure that the figure rises, allowing you to make more money for your business. Therefore, it’s essential that bookkeeping is done regularly so that you can keep tabs on your financial situation and make any amendments necessary.Continue reading→