Notes Payable and Long Term Debt
Part 1 of a 3 part series
Warning Signs:
- Increasing net sales to net working capital.
- Rising net fixed assets to tangible net worth ratios.
- Rising debt to tangible net worth ratios.
- Difficulty borrowing funds.
Steps to Improve: PLANNING YOUR BORROWING
- Use a monthly cash flow analysis to forecast financing needs.
- Prepare realistic, conservative projections; underestimate income, over estimate expenses.
- Use projections to monitor the business and build confidence with your banker.