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Category Archives for Finance

The Kraljic Matrix

The Kraljic Matrix helps you develop a purchasing strategy for the products and services that your organization procures. It aims to maximize your profit while minimizing supply-side risks. The model was first published in the Harvard Business Review in an article titled ‘Purchasing Must Become Supply Management’ in 1983 by Peter Kraljic. However, it was already […]

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Break-Even Analysis

Break-even analysis allows you to understand at what point your sales of a product or service will cover your costs. This point, when your sales cover your cost of doing business is known as your break-even point (BEP). At break-even point, you aren’t making a profit, but you’re not incurring a loss either. Break-even analysis […]

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Solvency Ratio Formula

Solvency Ratios, also known as leverage ratios, are one of many ratios that can help you to assess the financial health of a business. Solvency ratios measure a company’s ability to meet its long-term financial obligations. They do this by comparing a company’s level of debt against earnings, assets, and equity. Solvency ratios are commonly […]

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Good Debt vs Bad Debt in Business

Most of us (hopefully) have a dislike of debt, but not all debt is created equal. Some debt can actually be good for your business and accelerate its rate of growth. So let’s very quickly define the difference between good debt and bad debt in business. Unlike in our personal lives, not everyone in business […]

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