BU121 Study Guide - Final Guide: The Ventures, Critical Success Factor, Canada Labour Code
Document Summary
Evaluating financial performance analytical measures at different stages of the life cycle. Evaluate financial performance because of principle 1 of entrepreneurial finance (real human and financial capital must be rented from owners) and principle 5 (a venture s financial objective is to increase value) Different analytical measures are important to different users at different stages. Development and start-up issues: how quickly the venture uses cash (cash burn rate), their ability to meet short- term financial obligations like pay bills (liquidity), and the length of the operating/working capital cycle (conversion periods) Additional survival issues: the venture s potential to employ and repay debt (leverage) and their ability to provide a return on invested capital (profitability and efficiency) Interest: provides a discount in tax because it is counted as an expense but can also accumulate and cause higher expenses. Lower risk but lower return (higher cost of capital) Higher risk and higher return (due to lower.
