4 Signs That Your Business Is Profitable

CA Fatarpekar

02/08/2023

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1. Year-end bank balances A healthy year-end bank balance is a good indicator of profitability. This is because it means that your business has enough cash flow to cover its expenses and still have some left over. A healthy year-end bank balance can also help you secure loans or other forms of financing in the future.
2. Less amount in payables Payables are the amounts that your business owes to its suppliers. If you have a lot of payables, it means that you are not collecting your receivables quickly enough. This can put a strain on your cash flow and make it difficult to stay profitable.
3. Investment in closing stock without cash credit loan Closing stock is the inventory that you have left at the end of a financial year. If you are able to invest in closing stock without having to take out a cash credit loan, it means that you are managing your inventory well. This is because you are not overstocking your inventory, which can lead to unnecessary costs.
4. High amount of net worth Net worth is the difference between your assets and liabilities. A high amount of net worth is a good indicator of profitability because it means that your business is worth more than it owes. This can make it easier for you to attract investors or secure loans in the future.

Manisha Mohol and Associates