Balance sheet analysis leads to better business decisions

www.atconnercpa.com

A well-prepared balance sheet contains a wealth of information. Assuming the asset, liability, and equity amounts are supported by accurate data, the relationship between the numbers — especially when compared with prior balance sheets — may provide valuable insight into your company's financial health. That information, in turn, may guide you toward the best operational decisions.
A financial statement ratio is simply a comparison of one number with another. Though you may not use this term to describe such relationships, you're already familiar with many ratios. Miles per gallon, price per pound, calories per serving of your favorite dessert — all are ratios used in everyday life.
The following three balance sheet ratios are paramount:

• Current ratio. To arrive at this ratio, divide current assets by current liabilities. For your company, current assets might include cash, short-term investments, accounts receivable, inventory, and supplies. Such assets are "current" because you expect to use them up in the coming year or operating cycle. Current liabilities are similarly defined. Such amounts might include accounts payable, payroll, or the portion of long-term debt that's payable in the near term.
  
  The higher the ratio, the better your firm's liquidity. If you have a current ratio of 3:1, that means your current assets are three times the amount needed to pay off your current obligations. If the ratio is trending downward from one balance sheet to the next, your ability to service short-term debts is also declining. If the ratio drops below 1:1, your ability to meet current obligations may be hanging by a thread.

• Working capital. Though not technically a ratio (the number isn't a quotient), working capital is another key measure of liquidity. Defined as current assets minus current liabilities, the greater the amount of working capital, the more likely a firm has enough liquidity to meet current obligations.

• Debt-to-equity ratio. Divide total liabilities by total equity (assets minus liabilities) to arrive at this ratio. This relationship is often scrutinized by financial institutions. The lower the percentage, the stronger a company's equity position. In other words, the firm isn't relying solely on debt to meet payroll or finance ongoing operations — music to the ears of lenders.

Ratios derived from profit-and-loss and cash flow statements may provide additional insight into your company's fiscal health. If you'd like help analyzing your financial statements, give us a call.

aconner@atconnercpa.com

It's time to spend down your FSA account

 

If you contribute to a Flexible Spending Account (FSA) to cover your out-of-pocket medical expenses, it's time to review your remaining balance. Even if your employer extends the spending deadline to March of next year, you'll want to take full advantage of this tax-favored program.
One study found that over 80% of companies having 500 or more employees offered FSA plans, and they're popular with many smaller businesses as well. A huge selling point is the ability to reduce income taxes. In effect, by contributing pre-tax dollars to an FSA account, you enjoy a discount on costs you would incur anyway. But if you fail to spend the entire account balance before the deadline arrives, you forfeit whatever's left. That's the law.
Check with your human resources department or benefits office to confirm your company's FSA spending deadline (usually December 31 or March 15 of the following year). Then consider paying down your account balance with the following eligible medical expenses:

• Dental checkups. If you've already scheduled an appointment for a few months from now, consider moving it up. You also may want to pay for recommended dental procedures — crowns, fillings, and so on — before the spending deadline.

• Vision examinations. Many insurance providers offer limited coverage for visits to an optometrist or ophthalmologist, so consider setting up an appointment before the FSA deadline. If you need to renew your eyeglass prescription, now may be a good time to make that purchase as well.

• Chiropractic visits. Your insurance provider may limit the number of covered visits to the local chiropractor. Again, schedule additional appointments before the FSA deadline.

• Medications. Prescription drugs are generally covered, but if you use over-the-counter medications, you'll need a doctor's prescription or letter of medical necessity for those costs to be FSA-eligible.

• Mileage. Don't forget the cost of getting to and from medical appointments or drug stores. Keep track of the miles, the offices you visit, and the receipts. You're allowed to claim those miles using IRS mileage rates, but make sure you don't claim the same miles on your end-of-year tax forms.

• Medical supplies. Anything from first-aid kits to walking canes to blood pressure monitors may be eligible. The key is having a doctor-signed letter of medical necessity on file.

If you need more ideas about medical expenses that may qualify under the FSA spending rules, give us a call.

aconner@atconnercpa.com

Get Off That Beach!

Ahhh….the sun is beaming just perfect for a sun bathe.  Ocean waves dancing and singing a tune while the resort prepares for another day of activities to keep me busy for the next several days. I have my tropical drinks and entertainment to accommodate me and I’m feeling great and relaxed! I’ll soak up the sun during the day and unwind and jam at night. Then the day before its time to check out, I’ll go down to the resort’s gift shop and see what they have for everyone back home. No need to come leave the resort. I “think” everything is here!

Sounds familiar? How many times have you taken an All-Inclusive vacation and said those very words? Or, how many times have you taken an All-Inclusive vacation and, upon returning home, you were asked what did you do for 7 days and 6 nights while on the Caribbean Islands? If your only doing the beach and shopping at the resort’s gift shop, allow me to be the first to tell you you’re throwing away money and not maximizing your vacation.

While the concept of All-Inclusive vacations is to accommodate guests so that they don’t have to worry about any additional expenses like food, beverages and nightly entertainment, remember the reason you chose to vacation to begin with. Don’t get so caught up in what the resort has to offer that you miss out on seeing what the destination is all about. Leave the resort and take an excursion or 2.

Diss the resort buffet and chow down on some authentic food and dine with the locals. Montego Bay, Jamaica, perfect example. People are friendly and easy to talk with and there is always something fun going on. Taxis are available from your resort and their restaurants are great! In addition, there are so many tours that you can partake in and transportation is included with most tours. Plus, they’ll even pick you up from your resort. If Jamaica is in fact where you have landed, take advantage of Dunns River Falls & Mystic Mountain both located in Ocho Rios, about 90 mins from Montego Bay. Or, take a taxi down to Montego Bay’s Hip Strip for some shopping. After, grab a nice Caribbean entrée with a rum punch from Margaritaville Caribbean to end the day. Catamaran & Snorkeling, Appleton Estates Rum Tour and Horse Back Ridding are just a few of the many tours that are available to tourists once they arrive to Jamaica. Here’s an idea of how you can include some of these excursions and activities during your stay…

For a 5 night stay in Montego Bay, Jamaica, try planning your activities like this:

Day 1 – Arrival. Check in. Relax

Day 2 – Explore the beaches, activities, entertainment and foods of the resort

Day 3 – Dunns River Falls tour in Ocho Rios. Bam! You just made plans to see another area of the island in one trip!

Day 4 – Beach day at the resort. Relax and map out day 5.

Day 5 – Hit the Hip Strip and go shopping! By the way, if you decide to eat at Margaritaville Caribbean, you may want to bring your swim clothes. It’s on the beach and they have these fun water activities for FREE!

Notice how the sample itinerary didn’t sound over whelming or prepared to wear you out. You still get some sun and relaxation. But you also get a chance to explore the island.

So, the next time you visit the Caribbean Islands, go off the beaten path and explore the island in depth. Make your hard earned dollars work for you! Maximize your vacation and clear your activities bucket list together with your destination bucket list. Here at Wallet Happy Vacations, we recommend taking advantage of the many excursions that are available to travelers upon arrival to their destinations. We help our clients determine what will be fun, interesting and rewarding for them. Like the example above, we help plan itineraries so that our clients will taste what the resort has to offer and the island itself.  

Are you ready to get off that beach?

The Next Generation's GIVEBACK 12/21/12

FOR IMMEDIATE RELEASE:

PHILADELPHIA

December 10, 2012 - Sporty Marketing, LLC, Mic Check 1-Two!, and The Circle Ent. have organized the 2^nd Annual Inter-Communal Giveback Feast and Concert on December 21, 2012 at the Cecil B. Moore Recreation  Center in North Philadelphia. The goal of The Giveback is to help children and families from low income communities by providing a quality meal, gently-used clothing, entertainment, and a chance to fellowship with the community.

Hunger affects close to one million individuals in the Delaware Valley. In various communities throughout our region families and individuals experience food poverty and live in communities that qualify as food deserts, or regions with limited access to healthy and nutritious food. Because of the scarcity of community resources in low-income neighborhoods, many families are not able to receive quality food in abundance. Many of these families also struggle with meeting their basic needs like clothes and winter coats to adapt to the changing seasons.

In the winter of 2011, Sporty Marketing & The Circle Ent. decided to tackle these fundamental social issues by organizing the 1st Annual Philadelphia Inter-Communal Giveback Feast & Concert. The Giveback event includes a clothing drive, a feast, and a concert, all FREE. Last year we fed and clothed almost 400 people at Haddington Recreation Center in West Philadelphia. This year, with added partnerships and community involvement, we hope to help feed and clothe even more families.

The concert will be hosted by journalist, Sincerely Syreeta (SincerelySyreeta.com) and comedian Evan Polk (EvanPolk.com). The night’s entertainment includes local musicians such as: Aime, S.K., Suzann Christine, Band 4 Higher, Hello Dolly and many more! Community members will be able to browse and select from gently-used clothing and receive tips from two Philadelphia fashion stylists Curran J (KingsRuleTogether.com) and Kia Denise (From My Style To Urs) .

The 2012 Inter-Communal Giveback Event will be an affair to remember! Come out and lend your support and spread the word!

About the organizers:

Sporty Marketing, LLC is a new age firm which specializes in a classic approach to funneling revenue into businesses, large & small. A guaranteed increase in gross business & measurable results sets Sporty Marketing apart from the pack of today's intangible promise makers. For all your marketing needs, call Sporty Marketing indeed.

Mic Check 1-Two! is a community based organization dedicated to creating community level opportunities to encourage people to be vessels of changes.

The Circle Entertainment Group is a networking group built to support entertainers and businesses by providing information and resources for positive growth.

If you would like more information about volunteers or  would like to become a part of this event in another capacity please contact Lana Adams at 484-429-0004 or send an email to creatingdialogue@gmail.com

Additional Contact: Rashaad Lambert: spit@iamnotarapperispit.com; Cell: 949-667-1479

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