Generally SMEs, representing 99.8% of the country’s economic units are headed by a director or general manager who relies on others to the administrative and the operations. Usually too, is the administrative officer who creates and controls the information of the company. Here’s a first tip to the CEO: Get involved with your business financial information and understand what she says. This will allow you a more holistic view of it, which will lead to better decisions.

For those unfamiliar with finance, there are introductory courses for non-financial, which offer a minimum knowledge necessary to understand the information. It is also important that the information generated in the business to date. Not the same decisions based on information from last month, with one that is several months old.

Last but not least, it is important to learn to interpret financial statements of your company. Not the same analyzing the historical performance of the business, know how to use the information to plan the orderly growth of the company.

As a first step in its foray into finance for nonfinancial suggest to concentrate on three types of analysis: the income statement, the balance sheet and the cash flow statement. Each offers information of a different nature, combined to better understand what happens in the company.

The income statement shows a dynamic behavior of the cumulative operation of the company for a period of time. The balance sheet is a snapshot of the company at any given time. It tells us the size and type of assets, liabilities and capital that are available. Finally, the cash flow statement tells us how much cash entered or left the business and why concepts.

There are also different ways of analyzing financial statements. There are other vertical and horizontal analysis.

In other words, the analysis can be based on business sales and seeing how they are transformed into profits (vertical analysis). Or, we can compare trends over several years, comparing the performance of the current year against previous years (horizontal analysis).

• Financial statements are essential to obtain bank loans because the information they present allows banks to assess the financial quality of the person applying for credit for a relative safety that the same will be paid at maturity. In fact, many SMEs do not get bank loans because they have financial statements prepared. In Mexico, only 8% of businesses have access to bank credit.

It is important that companies use financial statements to make decisions and not just to pay taxes.

The accounting part of the tax return is very important to the analysis made by banks (Annexes E and H of the tax).

The information yielded by the analysis of financial statements requires an additional step: a detailed study to understand that every move we make in the company have financial implications. If you hire more staff or pay overtime, if you buy equipment, if funding is granted to customers or if a payment is made untimely, all, absolutely all the movements have implications that are accumulating. We must be aware of the importance of these movements and understand the companies’ financial information to make decisions that allow them to grow wisely and orderly.

It is not the same to sell, to generate profits or have cash flow in a company.

If you do not know and know how to interpret financial information, like we’re driving with a blindfold on.

* Vice President of National Technical Committee for New Business Development and Microfinance IMEF

A growing company can have a great hunger for liquidity to finance growth. WalMart was for years a growing company with negative cash flows (to finance growth). Do not let you leave without liquidity growth by surprise. No matter how well you can not go running out of cash on hand.

If you need external funding to provide capital, looking for professional investors and investment funds. Far better to have outside investors professional individuals.

Hire an auditor and audit your company every year. No matter how small your business, the discipline of the annual audit discipline throughout the accounting team.

There is nothing wrong with having the money earned in the company box. Microsoft spent decades accumulating unpaid dividends and liquidity for expansion. The money in the box gives you capacity for growth.

Controls the time limit for payment of your customers and do not hesitate to call the deadline as many times as necessary. Many companies pay the most persistent first.

Customers are paying. If someone uses your services and does not pay, not a client, is a burden to your business. Get rid of the ballast as soon as possible.

From the beginning you have to be clear you want to do with the company long term because your financial decisions and your operations are very different as you want to) sell to a third party, b) go public or c) keep the business you’re riding. If you want to leave your company “the children of your children” do not seek venture capital, for example.

A common mistake of entrepreneurs is to think “I need the money within two years, I’ll look in 12 months.” Investors have their own plans and timetables. Get the money when the investors / buyers are willing to invest or consistent with its strategy and not when you need it.

If you run a company you can take credit card debt consolidation companies as the best way to repay your company, so that your company’s debt repayment schedule is very long can be resolved as quickly as possible, with the presence of credit card debt consolidation companies can assist you in managing company your company so that debt can be resolved. The credit card you can get on a site offering credit card debt consolidation but do not be so easy to believe you should be doing a review to check the truth of the matter. after you are convinced with the company credit card, it helps you quickly retrieve your decision before the company went bankrupt.

A stop loss order is an order to sell a position when the price of these assets comes at the price determined by the investor. Once the price of the selected price pierces the order is executed automatically. That is, the order is entered the market. Stop loss orders help control losses.

However, stop loss orders do not guarantee that you will get the price you want. Price differences between the closing price one day and the opening price of another day may impact on stop loss orders and not allow the price is settled at the price indicated. However, stop loss orders are necessary to manage the risk of an investment portfolio. You should always use a stop loss order on their investments.

Learn to use the Stop orders

There are different types of stop:

Stop market (losses brake market): It is the best known and this order is due to its simplicity: only charge a price (the trigger), assuring the investor that if their roles operated at that level, a sell order at market price (highest bidder at that time) will be implemented immediately.

For example, if you buy a thousand shares of Microsoft (MSTF) to $ 30 each and that he is not willing to face a loss of more than $ 2,000 for this investment, market puts a stop to $ 28 (two-dollar loss multiplied by the thousand shares purchased).

If MSFT is operated action sometime in $ 28 or less will automatically be launched to market a sell order for the total position.

Nevertheless, it is necessary to consider an issue ignored by many. Since no one guarantees that the price is the same at the opening of operations in the previous close, could come to pass that MSFT close $ 28.20 a day to open the next day, for example, $ 26 ( this could happen by negative news released after the close of the market about the company).

If this occurs, the stop order sales would soar to the highest bidder at that time, say at $ 26. Thus, the loss would be 4,000, not $ 2,000 as was his intention.

The stop market ensures that we will sell your position if the action is operating below the chosen price, which does not guarantee is the price at which the sale is made.

Stop Limit (brake to limit losses): When you load this type of order, must be set two prices: the activation of the stop and limit price to sell the position.

If you follow the example used above, the maximum loss you are willing to withstand around $ 2,000. But in this case, one does not bear the risk of having to leave at any price. Therefore, placing a stop limit order specifies where to be activated if the stock trades at $ 28, but the sales price limit is $ 27.90.

With this, if it happens as in the previous case, the action start trading at $ 26 after closing at 28.20 yesterday, will automatically launch an order to sell their position of 1,000 shares of MSFT, but this time, rather than at market prices, would have a limit of 27.90. For this reason, must wait for the paper up a bit to run. The risk here is that this might not happen ever.

Thus, the stop limit price guarantees the price at which sold its position in case the action is operating below the price chosen, which is no guarantee that this sale is made.