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Financial Education


  • Submitted on 03 March 2011

    On Tuesday, March 29, 2011, the Internal Revenue Service is presenting a FREE webinar for tax professionals, small businesses, self-employed persons and independent contractors: Business Taxes for the Self-Employed: The Basics.

    The webinar will cover:

    • Reporting profit or loss from a business or profession

    • Self-employment tax and estimated tax payments

    • Schedule C and C-EZ

    • Deducting business expenses

    • Husband and wife businesses

    • Recordkeeping

    The webinar starts at 2 p.m. Eastern, 1 p.m. Central, noon Mountain and 11 a.m. Pacific.

  • Submitted on 06 August 2010

    Current Ratios and Quick Ratios

    Current ratios help evaluate a company’s ability to pay short-term obligations.

    Current ratio = current assets / current liabilities

    The current ratio includes all current assets, but since inventory is not always quickly liquidated, many analysts remove it from the equation and use the Quick ratio.

    Quick ratio = (current assets – inventory) / current liabilities

    The quick ratio emphasizes assets that are easily converted to cash.  The higher the ratio, the better off the company.  Analysts like to see ratios greater than 2:1 for current ratios and 1:1 for quick ratios.

  • Submitted on 06 August 2010

    Business FinancialsThere are three basic reports important to your business.

    • Income or Profit and Loss Statement
    • Cash Flow Statement
    • Balance Sheet

    An income or Profit and Loss Statement shows where and how money goes in and out of a company for a period of time.  Monthly, quarterly and annual Profit and Loss Statements show the financial strength of a company.

    The Cash Flow Statement is one of the most useful financial management tools because it shows you exactly how cash is flowing in and out of a business. 

    The Cash Flow Statement is a guide for business making business decisions such as adding employees or planning major purchases.

  • Submitted on 06 August 2010

    Key to CreditRegardless of where you seek funding - from a bank, a local development corporation or a relative - a prospective lender will review your creditworthiness. A complete and thoroughly documented loan request (including a business plan) will help the lender understand you and your business. The "Five C's" are the basic components of credit analysis. They are described here to help you understand what the lender looks for.

    The 5C's

    Capacity to repay is the most critical of the five factors, it is the primary source of repayment - cash. The prospective lender will want to know exactly how you intend to repay the loan. The lender will consider the cash flow from the business, the timing of the repayment, and the probability of successful repayment of the loan. Payment history on existing credit relationships - personal or commercial- is considered an indicator of future payment performance. Potential lenders also will want to know about other possible sources of repayment.

  • Submitted on 06 August 2010

    Credit ScoresFair Isaac & Co, or FICO, is a generic term for a credit bureau score and refers specifically to model used by FICO.  There are other statistical models, however, FICO is the most widely known.

    Credit scoring has become widely accepted by lenders as a reliable means of credit evaluation.  The credit score condenses borrowers credit history into a single number.  FICO and the credit bureaus don’t reveal the exact methodology for computing the numbers. 

    FICO scores vary from 375-900 points.  The higher, the better.  To get the best interest rates, you generally need to score 680 or higher.  Someone with higher than 680 is considered to have “A” credit.  If you score below 620, you will generally pay a higher interest rate on your mortgage and your credit is considered “sub-prime.” If your score is between 620 and 680, the lender may decide which category you belong based on factors such as income, assets, payment history, etc. 

  • Submitted on 06 August 2010

    Free Annual Report

    Your credit score represents the creditworthiness of you as an individual or your business. A credit score predicts the likelihood that you will repay your debts.

    Your business credit score determines your access to capital, rates on rental space, insurance and other business needs.

    The score is comprised of data from the three major credit bureau.

  • Submitted on 11 March 2010

    Maximizing the Web’s convenience, accuracy and speed, IRS.gov -IRS’s web site- now assists millions of individual taxpayers, tax professionals, and small business owners to better understand and meet their tax responsibilities.

    Updated Virtual Small Business Tax Workshop

    The IRS’s Virtual Small Business Tax Workshop is an interactive resource to help small business owners learn about their federal tax rights and responsibilities. This dynamic educational product, available online and on CD 24/7 from your computer, consists of nine stand-alone lessons that can be selected and viewed in any sequence. A bookmark feature makes it possible to leave and return to a specific point within the lesson. Users also have access to a list of useful online references that enhance the learning experience by allowing them to view references and the video lessons simultaneously.

  • Submitted on 24 November 2009

    Keeping up with federal tax requirements is not easy in today’s fast-changing business environment. Even if you use a tax professional’s services, you still need to know and understand your tax responsibilities.

    That’s why the IRS offers you a time-saver: IRS e-News for Small Businesses. E-news is a bi-weekly newsletter that alerts you to what’s new, hot and important for small business owners to know. It’s quick to read, easy to subscribe – and it’s free.

    IRS e-News for Small Businesses features:

    Tax dates for small business owners, to help you avoid missing a deadline

  • Submitted on 08 May 2009

    Last week the U.S. House of Representatives passed the Credit Cardholders’ Bill of Rights - a common sense financial system reform and consumer protection.  This bill provides  tough new protections for consumers facing excessive credit card fees, sky high interest rates and unfair agreements that credit card companies revise at will.

    This bill is important to the establishment and growth of minority businesses because a greater proportion of minority-owned firms are started or acquired by using credit cards (10 percent of firms) among other sources of capital, compared to non-minority firms (9 percent of firms), according to MBDA’s “Characteristics of Minority Businesses and Entrepreneurs.” (March 2008)

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