Financial Break Even Point? Given the Incomplete

¶ … financial break even point?

Given the incomplete data, it is hard to quote any specific figure. Elements that need to be conidered include the amount of workers that the agenyc employs, the calibre and brand of tools that they purchase as well as the details of other 'material' and quality and quanitty of this material.

Their location needs to be considered; their amount of rental; expense for utilities; travel expense, detials of office equiqment, and so forth. Only once these and related information is known can one figure out the financial break even point that the agency needs to make in order to make a profit.

What is the source of investment capital?

The company partners with financial and real estate corporation will invest in agency.

How will you use financial information to craft a business strategy?

Financial information will be used in both self-evaluation of organization and competitor analysis, in which, as competition, I will know from financial information how to best strategize my competitive approach and to diversify ourselves so that we can service a large range of needs whilst still making a profit. I will also know how much we can afford to charge -- this is the cost-based approach and it would also help me decide how to make my niche.

In fact, accurate assessment of financial knowledge will inform me of the suitability of the business in terms of its economic sense; whether it is suitable in terms of its environment and capacities, and whether it would procure economy of scale and scope.

I would also know whether we can obtain the necessary resources to develop and maintain the business and, if so, to which extent and which can be procured now and which must be delayed to later. Resources include amount of people that we can hire too.

Finally, Knowledge of financial information is necessary in order to interest and retain interest of stakeholders.

What key financial ration will you be using to measure the performance of your organization?

I will be using dividend policy ratios, profitability ratios, liquidity ratios, asset turnover ratios, and financial leverage ratios.

Liquidity ratios - This helps the agency to know whether they are meeting their short-term financial obligations and are of particular importance to those who are investigating in the agency. Two often used liquidity ratios are "current ratio" and "quick ratio" where current ratio measures current assets to current liabilities, whilst quick ratio excludes inventory and, therefore, deals only with liquid assets.

Asset turnover ratios - These will measure the degree of efficiency with which the firm utilizes its assets. Toe frequently used ratios here are "receivables turnover" and "inventory turnover." The former refers to how quickly or slowly the agency will collect its accounts. The latter refers to the cost of service expended on during a certain period divided by the average inventory level during that period.