Retained Earnings Total Assets Ratio

A business can fund it’s operations from both internal (retained earnings) and external (debt and injected capital) sources. The retained earnings to total assets ratio is the ratio of the accumulated retained profits of the business compared to its total assets, and is an indication of the percentage of assets funded by internal resources.

Last modified July 16th, 2019 by Michael Brown
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Operating Return on Assets Ratio

The operating return on assets ratio measures the ability of a business operation to use its assets to generate earnings. It is calculated by dividing the operating income by the assets of the business.

Last modified July 16th, 2019 by Michael Brown
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Asset Turnover Ratio

Efficiency is the ability of a business to use its asset base to generate revenue (and therefore profit). The asset turnover ratio is used in the financial projections template as one indicator of efficiency, and shows the amount of revenue generated by the business relative to the amount invested in assets.

Last modified August 14th, 2019 by Michael Brown
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Invoice Factoring

Invoice factoring is a process of raising short term funding particularly suited to high growth start up businesses. The method involves the business selling its outstanding customer invoices (accounts receivable) to a factoring company for a cash advance to fund working capital.

The invoice factoring company is responsible for collecting the accounts receivable, and pays the business the remaining balance less any fees due, when the customer has settled the account.

Last modified July 19th, 2019 by Michael Brown
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