Accounting Help!
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-Wrong place to post, but since my forum...haha- :p
Anyway, just wanna ask you guys, what's the difference between having a "strong" financial position and a "healthy" financial position (both in reference to a company).
Is it as though "Healthy" = in the black (low debt ratio, high current assets)? and "Strong" = profitable with good cash flow into the future? (e.g. recurring profits?)
Is it that both are overlapping in certain ways? -
i....really dont noe how to help u man....
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*sigh*Originally posted by laurence82:i....really dont noe how to help u man....
Die le lar
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u shld post it here at my forum:
http://www.sgforums.com/?action=forum_display&forum_id=2141
hehe
Well, anyway... Lets see... the differences between a strong and a healthy company huh...
For healthy urs is low debt ratio, high current assets right?
Hmm... Low debt ratio is right but definately not high current assets because anything more than 1:2 is already too high where current assets are not used wisely. Hmm... of coz if the stock/inventory is high, its a different case useless u are doing acid test.
As for Strong... you were saying profitable with good cash flow into the future? (e.g. recurring profits?) right? Hmm... This i'm not really sure but i believe it's correct. Maybe the Gross Profit/Net Profit Margin is high? Hmm... not sure, but i think it shld be ard there...
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ops sry for the double post, juz accidentally clicked on the quoting while i edit my post
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Hmm...I was thinking if a company with strong finances would be healthy also....true or false?Originally posted by joeacid:u shld post it here at my forum:
http://www.sgforums.com/?action=forum_display&forum_id=2141 hehe
Well, anyway... Lets see... the differences between a strong and a healthy company huh...
For healthy urs is low debt ratio, high current assets right?
Hmm... Low debt ratio is right but definately not high current assets because anything more than 1:2 is already too high where current assets are not used wisely. Hmm... of coz if the stock/inventory is high, its a different case useless u are doing acid test.
As for Strong... you were saying profitable with good cash flow into the future? (e.g. recurring profits?) right? Hmm... This i'm not really sure but i believe it's correct. Maybe the Gross Profit/Net Profit Margin is high? Hmm... not sure, but i think it shld be ard there... -
Hmm.. Yes properbly but... i believe there can be cases where profit is high i.e Strong but too much of stocks/inventory in current ratio which means that the ratio between a current ratio and a acid test ratio is big and that the ratio is too much more than 1 : 2. It'll proves Strong but unhealthy company.
I believe it can still happens, because there are always different cases. -
So in any case, "strong" and "healthy" are self-defined?Originally posted by joeacid:Hmm.. Yes properbly but... i believe there can be cases where profit is high i.e Strong but too much of stocks/inventory in current ratio which means that the ratio between a current ratio and a acid test ratio is big and that the ratio is too much more than 1 : 2. It'll proves Strong but unhealthy company.
I believe it can still happens, because there are always different cases. -
Actually it really depends how you argue it. There's no right and wrong answer. Probably the Strong and Healthy are different but it depends how much you can argue if a company is Strong/Healthy or vice versa~Originally posted by deathscythe99:So in any case, "strong" and "healthy" are self-defined? -
So can a company be both strong and healthy?Originally posted by joeacid:Actually it really depends how you argue it. There's no right and wrong answer. Probably the Strong and Healthy are different but it depends how much you can argue if a company is Strong/Healthy or vice versa~ -
Originally posted by deathscythe99:
strong and healthy = overwhelming profitability + good liquidity position ??
So can a company be [b]both strong and healthy?[/b] -
Originally posted by deathscythe99:
Yes of course. Try reading what i said earlier. You shld understand it slowly.
So can a company be [b]both strong and healthy?[/b]
Or u can try a case study and read it slowly. -
Yes, high or stable profitability + Good Liquidity PositionOriginally posted by silv3rgal:strong and healthy = overwhelming profitability + good liquidity position ?? -
Reading some of the financial statements online, really weird...some CEOS say they're healthy, others say they're in a strong position, that's why.Originally posted by joeacid:Yes of course. Try reading what i said earlier. You shld understand it slowly.
Or u can try a case study and read it slowly.
Hmm...or maybe there REALLY isnt any definitive (accepted by all) ans? -
Good point there...Food for thought...Originally posted by silv3rgal:strong and healthy = overwhelming profitability + good liquidity position ??
Hmm... -
yah i believe so. Anyway, its really hard to say, as different country people also say different things. U.S, Aussie & UK has different comments too.Originally posted by deathscythe99:Reading some of the financial statements online, really weird...some CEOS say they're healthy, others say they're in a strong position, that's why.
Hmm...or maybe there REALLY isnt any definitive (accepted by all) ans?
But i realised that Aussie and UK ones are more similar.
Hmm... Btw, one answer from a prof also may not be agreeable to another prof. So, if one says it's Strong and another say it isn't becoz he din argue, then is it right or not? So, it really depends~ -
How about....wrt Singapore?Originally posted by joeacid:yah i believe so. Anyway, its really hard to say, as different country people also say different things. U.S, Aussie & UK has different comments too.
But i realised that Aussie and UK ones are more similar.
Hmm... Btw, one answer from a prof also may not be agreeable to another prof. So, if one says it's Strong and another say it isn't becoz he din argue, then is it right or not? So, it really depends~
In Singapore, when a CEO says his company's financial position is "strong", or "healthy", what would that mean to you?