Property and Fixed Assets (3 of 3): Equipment - Part 2 - John M. Leask II CPA/ABV, CVA

Property and Fixed Assets

Part 3 of a 3 part series

Warning Signs:

    • Almost fully depreciated assets.
    • Depreciation as a percent of sales significantly out of line with industry averages.
    • Net sales to net fixed assets significantly out of line with industry averages.

Steps to Improve: EQUIPMENT

  • Don’t fix what isn’t broken; ask, “will this enhance the bottom line?”
  • Repair services can cut capital costs in hard times; plan accordingly.
  • Avoid brand names and list prices; consider used furniture.
  • Purchase fixed assets from wholesalers / special discounters.
  • Take advantage of purchase discounts.
  • Consider buying government surplus equipment.
  • Plan for replacement of capital assets; have a capital budget plan.
  • Be sure insurance coverage is adequate.
  • Be sure computers are backed up regularly with off premise storage.
  • Be sure computers are insured for stored data, hardware, software and restoration.
  • Use owner- / employee-provided tools where appropriate.

Back to The Business Doctor

>>Property and Fixed Assets (1 of 3): Space
>>Property and Fixed Assets (2 of 3): Equipment - Part 1
>>Property and Fixed Assets (3 of 3): Equipment - Part 2