business finance 101, learn business finance basics, fundamentals, and best practices

Addressing financial reasons for new businesses failure including insufficient capital, poor cash management, poor record-keeping, and more.

Exploring the financial reasons for new business failures and the importance of budgeting cash inflows and outflows.

Discussing the significance of cash forecasting, planning for cash inflows and outflows in new businesses.

Explaining the process of budgeting for fixed and variable costs in new businesses to ensure financial stability.

Highlighting the importance of internal controls, record-keeping, and safeguarding financial information in new businesses.

Detailing the budgeting process, types of planning, and the critical role of budgeting in business success.

Explaining capital budgeting decisions, managing cash inflows and outflows, and operational cash flow patterns.

Discussing cash from financing activities, borrowing vs. owner investment, and the significance of financial stability.

Exploring revenue recognition criteria, traditional revenue recognition scenarios, and examples like Walmart's cash and carry business.

In a Cash and Carry setting, verifying that the work has been done is simple and straightforward. Walmart's income statement reflects the amount of sales returned, ensuring accurate net sales reporting.

Walmart requires cash payment or a valid promise of payment for goods, ensuring immediate revenue collection. Credit card amounts are also swiftly collected in Walmart's financial reports.

Two traditional revenue recognition criteria must be met: the seller performs the work, and the buyer pays or provides a valid promise of payment. Cash and Carry businesses simplify revenue recognition as payment is immediate.

Boeing sells on credit due to quick cash transfer by credit card companies, while McDonald's avoids credit sales due to high bookkeeping costs and risk of bad debts. Credit sales are beneficial for companies with large customer bases like Walmart.

Analyzing credit sales benefits companies with large customer bases like Walmart as it attracts more customers and reduces bad debt costs. Companies like PepsiCo, Kraft Foods, Campbell's Soup, and Clorox engage in substantial annual credit sales.

For revenue recognition, companies like Walmart must receive a valid promise of payment. Companies selling on credit must assess the creditworthiness of buyers to ensure payment.

Revenue recognition examples include airline tickets and gift cards. Revenue for airline tickets is recognized when the service is provided, and for gift cards, revenue is recognized when the card is redeemed or estimated to be redeemed.