Your restaurant is doing well. Revenue is consistently increasing every quarter, your staff are pleased with their jobs and your customers keep stop coming back and recommending your restaurant to their friends. What should you do next?
In order to operate, businesses need to be able to meet both their short-term and long-term financial obligations. Solvency is the ability of a business to meet its long-term expenses and operate without running out of money.
A personal guarantee is a guarantee made by an executive or partner in a business to take on responsibility for credit issued to the business’s in the event the business is unable to repay its debt.
What is Capital Appreciation?
Capital appreciation occurs when an asset increases in value over time. It’s calculated by taking the amount you paid for the asset originally and subtracting it from the asset’s new, higher value after appreciation.
What is Revenue?
Revenue is the total amount of income that a business generates. It’s typically measured over a specific time period, such as a week, month, quarter or year. Revenue is often referred to as the turnover of a business.
What is Liquidity?
Liquidity is how easy it is to convert an asset into cash. If you can sell an asset for cash easily, it’s considered to be highly liquid. If you might need several months or years to sell an asset, it has a relatively low degree of liquidity.