Finance For Non Finance

What does liquid mean?

Simply put it means how easy is it to covert your assets to cash. Cash is the most liquid, as it is cash. You can use it to buy anything you want. A gold ring is very liquid as it can be converted into cash on almost any high street in the World for an…

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When is a sale a sale?

Answer, when the cash is collected. The role of the salesperson doesn’t stop when the contract is signed. To find out why, check out our article on cash is king

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Why people don’t pay

I used to work in finance for Dulux Paint. We had over 4,000 customers, so collecting the cash each month end was a major task. The head of the department responsible for collecting the cash had been doing it for around thirty years. There was nothing he hadn’t seen. On his office wall he had…

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What is the balance sheet?

It shows all your assets and liabilities. Consider your personal balance sheet. You may own a house. That is an asset on your balance sheet. In finance we call it a fixed asset, because you’ll keep it probably for a long time. You may then have a mortgage secured on your house. That is a…

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What is working capital?

Consider your personal finances. Each month you go to work and ‘sell’ your time to your employer. At the end of each month they pay you cash for your work. You use that cash to pay your bills for that month. And then next month the cycle is completed. You get paid, you pay your…

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