Business Tip # 17 - Capital

A while back, we did a piece on how the bank's establish the credit worthiness of a small business loan or the "Five C's of Credit".

Following up this week we'll go over Capital.

Capital is the built up reserves a business holds. Capital can be liquid or not.

Many banks will attempt to evaluate your liquid capital; your current assets (cash, accounts receivable, inventory) less your current liabilities (accounts payable, accrued expenses, short term debt obligations).

Depending on the business, a well capitalized company will have a current ratio (current assets divided by current liabilities) of at least 2 to 1. Meaning that the company has $2 in current assets for every dollar in current liabilities.

A prudent banker becomes concerned if this ration deteriorates over time.

For instance, if a company's current ratio is less than 1.0 to 1, it indicates that the company does not have the resources to pay it's current debt obligation. In addition, it could indicate that the company has a good deal of uncollectable receivables and/or obsolete inventory that cannot be sold.

Review your current ratios over time and notice your company's trends. it may tip you off as to why your feeling a liquidity pinch.

Wednesday's Tax Tip #19 - IRS Tax Processing

Not so much a tax tip this week, but an interesting item.

Hat Tip. TaxProf

2008 FILING SEASON STATISTICS
Cumulative through the weeks ending 5/18/07 and 5/16/08
Individual Income Tax Returns	2007	2008	% Change
Total Receipts	129,150,000	143,138,000	10.8%
Total Processed	119,827,000	130,342,000	8.8%
E-filing Receipts:
TOTAL	77,076,000	86,347,000	12.0%
Tax Professionals	54,932,000	59,975,000	9.2%
Self-prepared	22,145,000	26,372,000	19.1%
Web Usage:
Visits to IRS.gov	142,282,000	205,654,000	44.5%

Wednesday's Tax Tip #18 - Rebate checks

If you are wondering where your rebate check might be here is a schedule of the release dates.

If you had your 2007 federal income tax refund direct deposited, you rebate check will direct deposited.

Last two SSN digits:	Payments will be transmitted no later than (and received by the end of the day of):
00 through 20	May 2
21 through 75	May 9
76 through 99	May 16

If you did not have a direct deposited refund you schedule will be as follows.

Last two SSN digits:	Payments will be mailed no later than (and received a few days after):
00 through 09	May 16
10 through 18	May 23
19 through 25	May 30
26 through 38	June 6
39 through 51	June 13
52 through 63	June 20
64 through 75	June 27
76 through 87	July 4
88 through 99	July 11

If you have any questions about your individual circumstance , please email me at gtvcpa@yahoo.com