Winds of Change Can Take Us to a Better Place

At times all of us: have been rejected, have made mistakes, have not been accepted for a position, had financial problems, etc.

You must keep moving forward and don’t give up with your long-term visions or plans for your life.

I have heard many say: “I’m too far in debt so I just keep spending and charging – what is another $100 when I owe $70,000 to my creditors”. The debt gets larger and larger until they make a change to do something to turn their lives around.

I can’t stress enough that you should not be so hard on yourself because you can’t do anything about the past. If you learn from your past mistakes, then it was not a waste of your life. Sometimes the winds of change take us in an entirely new direction.

For your financial solutions, you can look to Bankruptcy as an option. How else would you be able to pay off your creditors, not incur continual interest and start out again with a clean slate? A Chapter 7 Bankruptcy can wipe out your debts, stop hiding from creditors and be able to answer your phone again without the fear it is a creditor “hunting” you down.

Sometimes it is good to look at those who could have given up, buried their heads in the sand and never surfaced to try again. Whatever you have gone through, keep moving forward in a positive direction.

For that reason, I am providing you with names, dates and events that happened to very successful people. Think about these names and move forward:

• Walt Disney (1919) – fired from newspaper job for lacking imagination.

• Lucille Ball (1926) – told by acting coach that “she is wasting her time and ours”.

• John F. Kennedy (1936) – runs for Pres. of Harvard freshman class & loses.

• Steven Spielberg (1960’s) – rejected by film school Univ. Southern California.

• The Beatles (1962) – turned down by Decca Records.

• Vera Wang – doesn’t make U.S. Olympic Figure Skating team.

• Hillary Clinton – (1973) fails the DC bar.

• Oprah Winfrey – (1977) – fired from news-hosting job for getting too emotionally invested in stories.

• Bill Clinton – (1980) – loses re-election as governor of Arkansas.

• Michael Bloomberg (1981) – fired by investment bank Salomon Brothers.

• Steve Jobs (1985) – fired from Macintosh division of Apple.

• J.K. Rowling (1996) – turned down 12 times for Harry Potter manuscript.

Wow, the winds of change sent all of these individuals to a better place. Change and making changes is the only way to move forward or in another direction. Let the wind not allow you to give up and see yourself as a determined and strong individual.

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Streamlining Balance Sheet: Key to Efficiency and Productiveness

Balance Sheet, which tells us about the financial position of a company, is one of the most significant financial statements for analyzing the solvency and liquidity position of any company. Often it has been noticed that in order to curtail costs of an organization, the main focus is on Income statement or profit and loss account, but in reality, a tight management of balance sheet results in surplus Cash and provides a good investment return to the shareholders. Inefficient balance Sheet management or Asset – Liability management often shows inefficiency and ineffectiveness on part of management. It shows that there is either over or underutilization of capital and unproductive fixed assets in the company which is resulting in tying up of capital in low-value projects. It might further reflect a poor liquidity position of the company and show that it does to have enough funds the meet its short-term liabilities. By managing the following key areas a company can liberate cash and put it in productive ventures.

1. Capital Structure-Capital Structure of a company shows the way finance has been raised in a company. A company can raise money through internal or external sources. A highly levered firm would reflect that the funds have been raised through external sources like loans, debentures, and it also suggests that the company has the capacity to take risks, aims at having a high growth and has more money for growth and expansion. On the other hand, a low-levered firm would the money invested by the shareholders in form of common equity, preferred stock and retained earnings for making investments in various assets and projects. Depending upon the company’s stage of development and nature of business,a right mix of internal and external sources should be there so that a company has a good solvency position and is able to meet its long-term obligations. Capital ratios such as Debt-Equity, Total Debt to Total Capitalization provide an insight into company’s capital position and further help in strengthening the balance sheet,.

2. Capital Deployment and Management-Often it has been seen that although the directors of the company are aware of the money raised but they are unsure of the places where the funds have been deployed which often lead to a decrease in economic profitability of resources. Tracing of capital to each department, unit or division helps the management to make sure that each penny is being utilized to the optimum and also helps in releasing of capital from the units where they have been over-allocated. Further, effective control measures of capital allocation can be implemented in the company to achieve a higher return on investment for the shareholders.

3. Fixed Assets Management– Resources of the company must be invested in those fixed assets, which are profitable and give return to the company in the future years. With the help of capital budgeting, a company can decide whether to make an investment in a particular asset or not.Some of the widely used capital budgeting techniques are Net Present Value, Internal rate of Return, Pay back method which help in evaluation of various long-term assets, and the cash flows that they will generate during their useful life. If a company has assets which are inefficient or on longer in use, steps should be taken to dispose of, so that the surplus cash from those assets can be used for productive purposes and value creation for the company.

4. Working Capital Management– Working Capital Management forms an integral part of a company as it ensures that a firm has enough current assets to meet its current liabilities. If a company has a high working capital it shows that there is an ineffective use of short-term assets, which might be used for some other purpose. And again, too low working capital results in a liquidity crunch and reflects the firm’s inability to pay off its short-term debts.

With the help of financial analysis, a company can maintain the right level of working capital and have good liquidity position. Current ratio, liquidity ratio are some of the tools which help the managers in knowing that the company’s current and liquid assets are used economically and they would have no problem paying their short-term liabilities.

Asset -Liability management has become an integral part of every company as it ensures freeing up of cash and using it productively to have higher returns. Proper management of working capital, right kind of financing mix, liberating cash from unproductive assets help companies in streamlining their balance sheet and redeploy the resources to generate higher returns and maximize shareholders wealth.

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