ADP RUN articles

Changes to your SG&A expenses should always tie back to specific business objectives. Since SG&A expenses are the cost of doing business, plan your budget accordingly to continue to meet your business goals. This list isn’t complete, but it gives you an idea of what falls under SG&A expenses. Generally, if the expense isn’t related to COGS, interest, or income tax, it’s probably an SG&A expense. SG&A Benchmarks provides SG&A spending information for 40 […]

Now that you feel comfortable with this simple example, you can start analyzing your profit and loss statement and even look at the financial statements of public companies to gain insight into their operations. The profit and loss statement (P&L) is one of the main financial statements that businesses produce. This guide will help you better understand your financial position by analyzing your profit and loss (P&L) statement.

For example, if you buy keychains wholesale for $1 each, s […]

You can mitigate the risks by double-checking your estimates and doing sensitivity analysis after you’ve done your initial calculation. Add the present value of all cash flows to arrive at the net present value. The time value of money is based on the idea in finance that money in the present is worth more than money in the future. Every periodically repeated income is capitalised by calculating it on the average rate of interest, as an income which would be realised by a capital at this […]

A good inventory turnover rate should thus be greater than one, and since the inventory to sales ratio is the inverse of the inventory turnover rate, a good inventory to sales ratio should be less than one. The ideal stock to sales ratio may be different for each business, as a healthy ratio is one that indicates that a company has invested in enough inventory to meet demand without over- or understocking. The ideal stock to sales ratio tends to be between 0.167 and 0.25 — but for growing ecom […]

The higher the ratio, the more efficient your business is at meeting short-term debts. A high ratio helps your company’s operations run smoothly and limits the need to secure additional funding. Before we can understand the working capital turnover ratio, we must first understand what working capital is. Working capital refers to the money your business has available to spend on essential payments, operations, etc. after all bills and debt installments have been paid. Working capital tur […]

ShipBob’s inventory management software (or IMS) provides updated data so that you can make more informed decisions when managing your inventory. While you may trust your gut as a business owner, it’s always best to use data to determine how fast your inventory is moving. Management strives to only buy enough inventories to sell within the next 90 days. If inventory sits longer than that, it can start costing the company extra money. So, let’s say your sales for the year tota […]