Barbara Cook

Marginal cost is important because businesses can determine their optimum production level for making a profit before costs will increase and monitor increases in variable costs.

Achieving positive net income is a goal that most companies and small business owners aim to reach. But some startups and hypergrowth companies operate at a loss for several years as they invest heavily to capture market share in their niche. 

ACH loans work for some companies with subpar credit. A business applies for an ACH loan with a lending company that offers ACH loans. The lender performs due diligence on the ACH loan applicant’s business but doesn’t require collateral. The applicant’s business credit score isn’t considered for ACH loan approval.

With adequate payment and credit history, your business may qualify to get bank loans and interest-free trade credit from other suppliers. Some of these vendors for business credit will offer early payment discounts. Trade credit improves cash flow. 

Strategic finance is an approach that CFOs and other finance leaders should use. You’ll add significant value to your company through real-time financial and strategic planning and analysis tied to the long-term strategic plan. 

Will your company have enough profits (and cash generated) from business operations to pay all interest expense due on its debt in the next year? Use the times interest earned ratio (TIE), also known as interest coverage ratio (ICR), to make an assessment.

The contribution margin can be calculated as an overall number for your company, on an individual product basis, or as a contribution margin ratio metric that divides the contribution margin by revenue to express it as a percentage.

A multi step income statement is more detailed than a simple single step income statement. It provides insights that financial statement users need when reading a profit and loss statement prepared using GAAP accounting standards.