Financial habits to avoid for a wealthy Future


We first make our habits and then our habits make us.

Bad financial habits deplete your hard earned money, landing you in debts. Instead of regretting the bad financial practices, it is better to be prudent and take wise decisions related to your finances and create wealth for future.

Let’s have an insight into some financial habits you must avoid to ensure a healthy financial future:

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Deciphering Debt / EBITDA Ratio

Debt/EBITDA Ratio is commonly used by analysts and creditors to assess the creditworthiness of a business. It is used by your bankers to ensure that the company does not default in honoring its debt obligations and generates sufficient cash to pay off debt liabilities as and when it arises. Before putting any funds in a business, the bankers need to be sure that their money would be safe and would be repaid in time. This assurance is obtained by looking at the Debt/EBITDA ratio.

Debt/EBITDA ratio can be expressed as below:

Debt/EBITDA Ratio = Debt / EBITDA

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Analyzing your Accounts Receivables!

A business may extend credit to its customers for the goods sold & services rendered to them and frame appropriate credit policy suitable to the business. Credit policy indicates the credit period that a company will offer to its customers. A credit policy should not be too liberal that it results in defaults, nor should it be too strict that it restricts sales. Ageing analysis of accounts receivables helps a business in framing an appropriate credit policy and also helps to analyze the category and quality of its debtors.

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Do you Understand Debt Service Coverage Ratio

Debt service coverage ratio is a ratio commonly used by lenders to assess to the credit worthiness and financial health of a business. It gives a comfort to the lenders if the company generates sufficient cash to pay off its current portion of debt as and when due. Before putting any funds in a business, the lenders also need to be sure that their money would be safe and would indeed be repaid in time. Debt service coverage ratio serves the purpose.

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5 Reasons Why Loan Frame Is Your Best Bet For A Loan Against Property

Loan Against Property is widely regarded as the most effective mortgage loan for funding a business and remains one of the most popular loan products in the small business loans category. Given this popularity, there are many sources for Loan Against Property that you can access. Here are 5 reasons why Loan Frame should be your first – and only – port of call for your Loan Against Property.

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Know your Receivables Turnover Ratio

The performance of the business can be evaluated by having an insight into its financials. To build up a strong credibility before its lenders, a business must strengthen its financial ratios. The financial ratios can be classified into four main categories, namely, liquidity ratios, profitability ratios, solvency ratios and activity ratios. Activity ratios are the financial tools that are used to evaluate the ability of the firm to convert its assets into cash or cash equivalents. One such important ratio is Receivables Turnover ratio.

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Are You Adequately Geared? We Tell You How to Find Out

Gearing Ratio evaluates the financial structure of the company. It indicates the ratio of capital raised through debt to that raised through equity. In other words, it is the measure of financial leverage of a company. It is also known as Debt-Equity Ratio.

It can be computed by dividing the company’s total debt (both long-term as well as short term obligations) with the shareholders’ equity. Thus,

Gearing Ratio/Debt-Equity Ratio = Total Debt/ Total Equity

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5 questions to ask before you get an Unsecured Small Business Loan

Once you have decided to apply for a small business loan, it helps to have an understanding both of your circumstances as well as the business loan lender’s perspective. This will help to improve the odds of success, and apply for a loan type and amount that is suitable to both your needs and your capacity.

Here are 5 important questions you should ask and answer before you apply for an unsecured business loan:

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