Why Do Many New Businesses Fail?

One of the main reasons of new business start-ups failure is the inability to appropriately define the market, and the lack of relevant market segmentation for core market segments and customer groups. Market segmentation involves dividing the market into smaller homogeneous groups as a part of the company’s overall marketing strategy. Proper market segmentation entails…

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What is a Cash Flow Statement?

Statement of cash flows is a statement that shows how much cash is generated by a company over time and where it went. In other words, it is a statement of a company’s detailed cash payments and cash receipts. In essence, the statement main objective is to present detailed information on a company’s sources and…

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Tips on How to Read an Annual Report

An annual report is the summary of an organization business performance over the last 12 months, otherwise called the fiscal year of financial year. An annual report reveals the summary of the assets, liabilities, equity position, profits as well as the cash flows of the entity. As a vital document, the information is usually in…

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What is GAAP (Generally Accepted Accounting Principles)?

Unlike physical science, where laws are internally and universally true, accounting principles tend to change to meet the demands of changing financial situations. Adequate financial information that was presented in a report several years ago may not be adequate today. Over the years, the accounting profession realized that it needs to develop a set of…

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The Element of a Winning Business Model

  Building a sound business model requires the determination of specific elements which are considered the building blocks the business model structure.   Determining Drivers   The first element is the determination of   the business drivers. In order to understand this core element, new business start-ups should ask themselves a couple of simple yet substantial…

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Preparing a financial budget

A financial plan is an important item that all organizations need to have. The financial budget is the centre core that drives the business. It is through the budget that the company is able to make plans on how to run the business for a specific period while spending the finances in a way that…

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Why Companies Need to Develop a Sound Business Model?

What is A Business Model?                  The business model is the method the company employs to design a manner or structure by which the company deliver value to its customers.   Thus, the business model should reflect company’s assumption about customers’ needs and wants, and the management’s strategy.   In simple words, the business model…

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Types of Securities

Any financial asset that is trade able is categorized as a security.   Securities have a variety of classifications depending on the structure that they follow in the categories.   They may be classified in terms of the time that the securities have been traded.   In this case, they are categorized as primary markets…

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How to Prepare a Balance Sheet

Balance sheet, otherwise known as statement of financial position, is a quantitative expression of the assets, liabilities and owner’s equity or net worth of an entity.   As the summary of what an organization owes and owns, it is the reflection of how healthy a business is at every particular time.   Balance sheet could…

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What is Financial Audit?

Definition   Financial auditing is a process that involves in independent evaluation of a company’s financial reports.   The main objective behind performing financial audits is to give managers, directors, investors and regulators reasonable assurance that the company’s financial statements are complete and accurate.   A financial audit is an examination of the financial statements…

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