The three basic components that make up every company

Julie Brownlee, Fsp Invest, 14 May. 2014

Tags: company, business, financial statements, components, profit and loss, cash flow statement, balance sheet, profitability, cash flow, assets,

Think about all the companies in the world. There must be millions of them. These companies are all doing different things. Yet, in spite of this, you can break down each investor into three basic components. So how does this work? And what does this mean to you as an investor? Let’s take a closer look…

Each business contains three essential parts

Let’s kick off with an example to show you the main components of a business…

Your best friend Mary asks you to invest in her furniture shop. Before you make any decisions, what should you look at? You need to be able to value the business.

This opportunity has remained silent, elite and secret… Until now

That’s because this opportunity is limited to just 1% of existing readers.

We simply know that some of the profit opportunities that we will research and present to you are too small and sensitive for too many people to know about.

And we want to see what will happen when a small group of serious individuals gets hold of every single one of the profit opportunities available in the Financial Service Alliance.

So membership is first come, first served. Join today… We may never extend this invitation again.

Firstly, you want to check that Mary is selling her furniture at a profit, Tim Bennett in Money Week explains. She needs to sell them at a price that covers all her costs, including buying the furniture from the supplier and the running costs of the shop.

Secondly, you need to look at cash flow in the business. Does Mary sell any of her furniture on credit? This tactic may help her sell more furniture, but she could hit tough times because of this too. If Mary has to pay her suppliers before she gets the cash from her customers, she may run out of cash.

Thirdly, you need to look at the value of the assets themselves. If the company did go bust, how much could all the parts of the business sell for? What is the value of the premises? What is the value of the current stock of furniture?

These three parts are all crucial components of any business. Essentially they are:
  • Profitability;
  • Cash flow; and
  • Assets.
“Spend the day with me on the 17th of May 2014 and I’ll show you how to go from broke to millionaire in just seven simple steps”

I hope to meet you on the 17th of May 2014 so I can show you how easy it is to become a millionaire without paying a financial expert thousands of rands to help you!

To find out more, click here.

The vital parts of a company’s financial statements

And this explains the arrangement of the financial statements of a company. You’ll find each of these components in the following part of the financial statements:
  • The profit and loss account;
  • The cash flow statement; and
  • The balance sheet.

If you want to look at any of the three main components of a business, you now know where to find them.

So there you have it, the three basic components that make up every company.

Related QA

kavesh.maharaj.73 asked:
Hi Josh Quantum wants to buy back shares from shall investors at what I think is a low price of around R3.86. You tipped the share in February [read more]
Published at 14 Mar. 2018 in: Investing Real wealth 5 answers
elizastrydom asked:
Hi Timon I am interested in registering for your Red Hot Storm Trader service. I am already a Red Hot Penny Shares investor. My question is [read more]
Published at 28 Feb. 2018 in: Investing Trading platform and broker 1 Answer
ManuE asked:
I have an interest in investing in Bitcoin, I just don't know how. If I buy Bitcoin with R15 000, how much can make (Return On Investment)? [read more]
Published at 25 Feb. 2018 in: Investing Investment 1 Answer
rickey101ter asked:
Good day gentlemen I am a subscriber of various of your products e.g. the above mentioned two and TWS, but I am not happy with the services I [read more]
Published at 07 Feb. 2018 in: Investing Investing 2 answers
bongani.zwane.127 asked:
Hi Francois, I want to invest in ETF for my kids educational funds. I would like to find out which ETF securities can I invest into for a period [read more]
Published at 01 Feb. 2018 in: Investing 1 Answer

Related articles:




Youtube Twitter Facebook

Connect with us:    

  • Accelerated Investor
  • Accessories