As an entrepreneur and with so much of our focus on profitability, it is sometimes easy to forget about our good old friend "the balance sheet".
So what if I asked you that this question... "How is your balance sheet doing?". I am not sure most people would know exactly what to answer, but here is a quick way for you to know the answer:
Check for business solvency by checking your ratio of current assets to current liabilities.
- If that ratio is less than one, your business is in danger of going bankrupt.
- If it's less than 0.8 you are really in trouble as you are on your way to running out of cash.
So do you know now how your balance sheet is doing?
