The 80’s was the start of the bull market economy. You could invest your money in bonds which were paying out at a flat 15% interest rate, risk free. It was a good time to invest in companies because the corporations were forced to compete with 15% rates to be more efficient and investing their capital wisely.
Winding the clock forward to present day, the federal reserve have been printing money excessively and have been giving corporations access to cheap loans. As a result, companies are over valued through stock purchases, share buybacks which means they are not investing in their future growth. The over supply of money printing is reshaping the global economy which is non sustainable and there is now too much corporate/ private debt.
Global Economy Outlook
The outlook of the economy appears more sketchy as interest rates are low, some countries are at 0% and others facing negative interest rates. To keep afloat, companies need to reform otherwise they could possibly go out of business. The problem today is that although the banks have been bailed out, they have sunk the bail out money bank into the stock market again instead of filtering the money down to the population. This has a tremendous effect on the economy as people aren’t investing money, or buying goods and services to fuel the economy. This is now leading to another rising global debt bubble. The fact that many US student have defaulted on their loans due to the lack of jobs and people are unable to repay them. There is a potential housing crisis in the UK and Australia and manufacturing is slowing down in China. Once you have private debt levels growing more than 150% of GDP, there will eventually be an economic crisis.
Invest In Your Business
Looking at the state of the economy today, banks are tightening their belts and it’s hard to get a business loan. The circulation of money (or debt) has been recycled, this can have a huge effect on your business. The key aspect of this is knowing how to protect your business from certain economic collapse. Companies, Governments and the general population load up on debt during good times, only to struggle to repay those debts when the economy takes a turn for the worse. Much of the cheap flow of money has gone towards building up cash reserves and “saving the money for a rainy day” as opposed to capital expenditure to improve companies and make them more competitive.
Too often when a business is cash-strapped, the owners focus on the day to day running. They spend more time trying to keeping the business afloat than knowing how or what can propel the business forward. Some companies tend to reform by either reapplying for more credit or laying off workers or both.
What Is A Balance Sheet?
Balance sheets are divided into two main areas; what the business owns and owes at a specific point in time. It is a financial statement that summarizes the company’s assets, liabilities and equity. Follow the link to read a balance sheet example. Balance sheets are named as such because the assets should equal liability plus equity.
Balance Sheet Format
It’s always a good idea for companies to examine their assets to determine whether the company has enough current assets to pay its financial obligations. Working out whether you have a strong balance sheet isn’t hard because the two sides of the equation are always in balance. We measure the strength of a balance sheet by taking a closer look at the capital expenditure (capex) and operational expenditure (opex) that makes up the two sides of the equation to find out where it might crack under pressure.
Balance Sheet Ratios
Below is an article from eHow explaining how you calculate your balance sheet using ratios.
“The strength is in ratios, not in the numbers” – eHow
Balance Sheet Format
There are many ways to strengthen the balance sheet, balance sheets are particularly important for investors because it is a reflection on the company’s assets and liabilities. If an investor is looking at your business to invest in, the first thing they will ask for will be the balance sheets over a certain period of time to get a overall view of where the company is at and comparing results with those of a company’s peers and with average industry ratios.
You can evaluate and improve the company’s health. Create a structured balance sheet by using the three investment-quality measurements:
- Working Capital
- Asset Management
- Capitalization Structure
Repay The Business Loan
The first way to strengthen your balance sheet is to repay the loan as quickly as possible. Failing to make the repayments could lead to liquidity problems and bankruptcy. There are many lending institutions offering debt refinancing packages. Can you improve on your current loans current interest rate? Loan term? Do you prefer a fixed rate? Check your company’s credit rating
Leverage Company Assets
It is important to list your assets by their liquidity a facility in which they can be turned into cash. If your business has a lot of cash flow tied up in equipment or stock, you’re profit potential is limited. All that capital should be working for you, not against you.
Fixed assets are known as intangible assets. Assets are instruments that a company owns or controls so as to benefit from their use in some way. For example, it could be the building that they own or equipment they use to make the company turnover.
Current assets such as cash, inventory, accounts receivable and short-term investments are assets that the company plans to use up or convert into cash within one year from the reporting date.
If the company sees this weak-point in the balance sheet, one way it can grow is by issuing new shares and gets good response from market thus increasing its cash liquidity. A company can add strength to its balance sheet in two ways:
- By leaving profit in the company
- By increasing the share capital
Have you ever thought about investing capital in alternative investments to beef up your balance sheet? Although the risk exposure can be high, there are new alternative investments on the market that offer a much safer option than stock investing. Good profit can be made from investing capital in diversified investment projects, this can reduce the risk of defaulting on a loan. Alternative investment options now include low risk and absolute return on investment.
So the question is how can you get more for your money?
Alternative Investments For Investors and Businesses
Investors and companies alike are seeking refuge from the harsh conditions of the stock market so they are looking for safe places to park their cash. We have seen an explosion in mergers and acquisitions / corporate buyouts to boost equity and growth. Fixed-income investments usually provide modest returns while preserving your capital, undertaking comprehensive measures to strengthen its balance sheet to pursue its journey toward achieving industry leading profitability.
Return On Investment
So going back to the 1980’s where you were able to get 15% interest on your money in the bond market, these returns have all but disappeared. However, as an authorized representative we have access to a transparent fund offering absolute return on investment. This alternative investment opportunity is a sustainable model of finance that can help both savers, investors and companies remain solvent. It doesn’t mean that businesses need to reform or restructure to work.
This safe and secure alternative investment will put your company in a competitive financial position, which together with the transformed business model, will enable long-term profitable growth and competitiveness.
We help people use their retirement money or savings to invest in alternative backed notes with low risk and high assured returns. This is a great alternative to bank savings accounts that are currently paying less than 3%, and investing in the volatile stock market.
How Structured Note Investments Work
As an accredited investor, you become a subscriber to a alternative investment. By doing this the investor becomes a creditor through the structured note and private placement.
How This Structured Note Investment Works
The structured note investment product is not derivative based. We are happy to show historical performance to demonstrate last 4 years of performance. Structured notes are fixed agreements offering a set return on investment as an annual interest rate guaranteed.
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