This online workshop provides a guide on the four most relevant financial ratios for small and medium enterprises (SMEs).
A 2010 report by PROCOMER and FUNDES analyzes the factors that led to the successful internationalization of some SMEs, enabling them to export their products to outside markets. According to this study, thriving SMEs efficiently manage international trade, use available services to facilitate the internationalization of their products and are concerned about strengthening their business skills. They also make good use of information technologies and institutional assistance programs.
Financial ratios are a useful and convenient tool for measuring a company’s performance and its financial position. Most ratios can be computed from information taken from the organization’s financial statements.
Service providers usually aim their business strategies towards large companies. However, they often forget that SMEs offer great potential for generating new sales.
In order to achieve a financial strategy that meets the management objectives it is essential to have reliable data. The financial manager of the company is responsible for supervising the compilation and preparation of the reports containing this valuable information.
The Financial Manager of a company must have the proper ability and training to address key financial management decisions. The main aspects of the financial decision-making process relate to investments, financing dividends and asset management.
The objective of financial management is the maximization of shareholders’ wealth. To satisfy this objective a company requires a long term course of action. The Inter-American Investment Corporation (IIC) reveals the importance of implementing an adequate financial management strategy for meeting this objective.
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