Category Archives for Finance

Net Present Value Explained

Net present value (NPV) is a tool that can help you determine if an investment or project is worthwhile to undertake. Imagine that you’re trying to decide if a project is worth doing. This project will require a one-off upfront cash investment of $5,000 and will return cash over five years as follows: Year 0: […]

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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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