033 - Is Debt Worth The Risk?

Do you want to know if your business is truly healthy? Listen to this 9 minute short to learn how to measure and calculate your current exposure to risk from the debt that you already have... oh, and maybe a little Shakespearian literature too. It’s simple. It’s quick. It’ll help you down the line.

Show Notes

  • Most companies have debt — it’s healthy. (1:30)

  • How to calculate the debt coverage ratio. (3:26)

  • How to calculate your current ratio. (5:28)

  • Lending is just as important as borrowing. (7:41)

Quotable Moments

  • “Debt creates enough risk to offset any possible advantage.” — Dave Ramsey (1:15)

  • “The thing about debt is that you have to pay it back. When we borrow money, we have to pay it back out of future profits.” (2:20)

  • “Although debt might work to smooth cashflow or speed growth, it is always a risk.” (2:50)

  • “Current assets are things like cash, accounts receivable, & inventory that are likely to be converted into cash over the next 30-90 days.” (5:39)

  • “Don’t be a borrower nor a lender be.” — Shakespeare (8:20)

Resources



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034 - The Evolution of a Business Owner

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032 - Roofing Supply Co. with Tami Hasselwander