How to Manage Personal Finances

A month’s salary just hitchhiked past. Nearly half the salary was used up to pay debts.

If two ‘phenomenon’ is often recur mean something is wrong with how to manage our finances. One of the things that makes our finances chaotic is our own habits.

We are not accustomed to discipline in managing finances and cannot distinguish between lust and needs. But calm down, it’s never too late. If you really want to improve your financial condition, now is the time.

Well, some of the habits of managing your personal finances must be implemented so that the salary is not just hitching a ride. Try to see!

1. Track income and expenses

Often we do not care about our expenses. Where do our monthly salaries go? Tracking income and expenses can be done by making simple bookkeeping. If you don’t want to bother, you can use the financial control application on your smartphone.

2. Giving a gift

Wedding invitations from relatives or friends can come repeatedly in a month. Donating money is legitimate, but you must keep in mind: do not let the money burst because of the frequency of donations.

3. Check the bill

Accustomed to checking bills is important. The receipt goes to the most important credit card bills. This is important so that we don’t find stealth costs there.

4. Take advantage of the internet

It’s not an age to queue at the bank for transfers. Take advantage of e-banking.

Especially if we want to compare and propose banking products such as unsecured loans (KTA), motorcycle ownership credit, credit cards, etc. With the internet you don’t need to go around the bank just to find information.

5. Saving, saving, saving

Saving habits do need to be fostered early on. But it’s never too late for those of you who aren’t used to it.

Start setting aside a small portion of your salary. This is important for reserve funds or future funds.

6. Take advantage of credit cards

Who says credit cards are demon cards? If used wisely, credit cards make life easier.

Monthly shopping and buying tickets will be easier. Not infrequently credit cards that offer promos, point rewards and cash back.

[Read: Additional Credit Cards Are Sustained, but Could Be Disaster]

7. Always make an expenditure post

After payday always make expense posts. This list of expenses must be obeyed so as not to be distracted towards the end of the month.

8. Avoid unnecessary costs

Often late paying bills and being fined, using the services of brokers, breaking traffic that ends in traffic. These unnecessary costs are often underestimated because we feel our salary is decent. If you are not disciplined in such a trivial matter like this, how can you manage your finances wisely?

9. Always compare

Be sure to always compare prices when buying goods. Whether it’s electronic goods, smartphones or plane tickets. There’s no reason to be lazy, there’s already internet technology, right?

10. Always take care

Being used to caring is good. Not only items that must be cared for are durable, taking care of yourself is also important.

Pain is expensive. Better to prevent than cure.

11. Refrain

Lust and desire can arise at any time. Especially if I go to the mall again.

Seeing a big discount board, my chest was jumping. It’s hard to hold back, but instead of starving at the end of the month, it’s better to endure unnecessary shopping.

Remember, discounts can occur at any time. So just be patient.

12. Always set the targets

There is a principle in life ‘let it flow’. This principle is not wrong.

But setting targets in life will be much better. For example, at the age of 30 you must have a house. 35 years old must have their own business.

13. Self-evaluation

Self evaluation. Don’t wait for the end of the year for evaluation. Evaluating mistakes and doing things is a good habit. With evaluation we can learn not to fall into the same hole.

14. Anticipation

Anticipating events that have not yet happened must be done. For example, preparing a reserve fund to anticipate unexpected events.

15. Think long

Think long and ahead. Investing your funds is an example of long thinking. That is, by investing you are preparing your future.

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Business Transfer Stages from Offline to Online

Offline businesses are increasingly depressed because of the changing shopping trends that are shifting to the online world. Digital transactions that continue to grow make it easier for consumers to get the desired item without having to bother going out of the house. Capitalizing on cellphones and internet quota, consumers can already find a variety of needs for both clothing, food and shelter. Without the need to visit shops with a considerable distance that will take up time, energy and transportation costs.

With this significant change in the consumption pattern of the community, business activists need to find a solution to deal with it. One way that can be taken is to move from an offline business to online. Maybe you will be a little surprised because there will be many different things. But this effort must inevitably be done so as not to be left behind. In an effort to move offline business to online there are several steps that must be followed in order to run optimally. What are they? Here’s the review.

Do Market Research

Your business may already have customers in the offline world and only need to be invited to switch to an online store. But to do it is not that simple there are many different things, when you make sales in the offline world with the online world. There are ways that must be taken to make these customers know that your business already exists in the online world. Therefore it is necessary to study marketing in the online world. In addition, the market base in the online world is also much broader compared to offline. You certainly want to develop your business on a large scale by utilizing this. Before you begin, you need to know what choices are most suitable for your business and demographic. Do market research and surveys to find out how far your business can be developed, which prospective customers have future prospects, what they really want from your business and what services you can provide. This can be seen from the needs and habits of prospective customers. This research can begin by asking customers or visitors to your store. Can be added by making online surveys to get more data. Offer rewards so they are interested in filling out your survey.

Take advantage of Social Media

Turning to the online world, start from something simple. Take advantage of social media to promote products and services while marketing them. Building a marketing unit on social media is indeed quite effective. This is because social media can be used by anyone, anytime and anywhere. At present almost all levels of society have social media accounts, whether it’s Facebook, Instagram, Twitter and so on. Data from “Digital Around The World 2019” states that there are more than 150 million people using social media from a total of 268 million Indonesians. They spend an average of 3 hours 26 minutes each day accessing social media for any purpose. Take advantage of this to reach your target market by posting and promoting through platforms that they open every day. Social media is well suited to being the initial promotional media because it uses fairly cheap costs. Even if you have enough time, promotion using social media can be done without a penny. But for those of you who have limited time or are chasing targets, hiring someone for this part can also be done.

Build a Website

While doing promotions and marketing through social media, try to build a more professional website. Take the time to develop a quality website, or you can pay other people who are experts in web development. Start by choosing the right domain name, user friendly website and exceptional customer service. The website that you develop doesn’t have to be complex. Choose a design that is simple but looks interesting so that customers feel at home on your website. Complete information to provide customer knowledge about your products and services and develop from time to time. Place these various information neatly and avoid writing errors. And make sure all links are functioning properly. Give the best because the website is the face of your business.

Create an Online Consumer Base

After your business has a functioning social media account and website, then you need to build a potential audience. You can use social media to promote websites, and vice versa. Give a link to the website or social media on each promotional channel used. But one thing to avoid, even if you want your brand to be everywhere, try to optimize one or two platforms. This usually applies to the use of social media. You don’t need to promote on any existing social media platform. Choose the social media that is your customer base. Make interactions and engage as much as possible so that you are closer to the intended customer.

Take advantage of the E-mail Newsletter

After launching a website for business, you can start collecting e-mail addresses and potential customer information. Maximize the opt-in function on your website to help this process. Opt-in is a method used to add prospective customers by registering e-mail. E-mailing these prospective customers will be included in the email marketing list and will get various information from your business. With this method, the promo material you make will arrive at the right person. Give special promotions, discounts, and free products to attract prospective customers to register in your e-mail newsletter. The more e-mails you have, the more customers you can reach with various special offers and information from your business.

Use SEO Services Providers

SEO stands for Search Engine Optimization, a marketing method that affects the level of visibility of a website in a search engine. SEO will help your website be at the top when customers search for keywords that relate to the content of your website. Try to use SEO services that are able to provide quality services. SEO service providers will usually provide technical advice about developing your website, developing content, campaign management for business development, keyword research used on content and so on.

Prepare Yourself Facing Consumers

With the activity of the online world that is very crowded in almost every time, you need to prepare business management to deal with it. You can just receive a very large list of orders at the beginning. Provide the best service to be able to answer every consumer request. Nor can it be available to consumers at all times, giving them an understanding by making a statement or confirmation through the website and social media. Likewise if the online business that is run is not too successful at first. You must really be able to play a promotion and marketing strategy to invite many prospective customers going forward.

The stages mentioned earlier are still the initial steps of moving business from offline to online. After entering the online world, there are still steps that must be taken to keep your business afloat. One of them is maintaining good stability and management. To keep you focused on business development, help is needed to work on technical matters such as financial records. For this matter, you can rely on the number one online accounting software in Indonesia, Journal. Journals offer services in real time, without installation and data security equivalent to a bank. With Journal, you can also get the ease of recording and bookkeeping for business purposes anytime and anywhere. Enjoy the free trial for 14 days only here.

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Learn More about Management in Business: Definitions, Functions, and Elements

In running a business, a person needs to explore the science of management. It is this business management that can help you manage and run your business correctly and precisely in order to reach the set targets. Without this, your business or business can be messy and neglected.

The problem is, not everyone has a background in management, maybe you are even one of them. So, does this mean that you have to go to college for about four years to explore it?

Of course not. However, at least try to learn basic things related to business management, which also includes financial management and marketing. Basically, management functions to regulate the course of your business so that it forms order that can facilitate you in achieving your goals.

Understanding of Management

When viewed from the etymological side, management actually comes from ancient French, namely “management”, which means the art of carrying out and regulating. From the etymological meaning, some experts in management science develop it into a longer definition.

Ricky W. Griffin, for example, defines management as a process of planning, organizing, coordinating, and controlling resources to achieve goals effectively and efficiently. This is in line with Henry Fayol who said that management is a science that contains five main ideas or functions, namely designing, governing, organizing, controlling, and coordinating.

There is also George R. Terry who refers to management as a typical process consisting of actions: planning, organizing, mobilizing, and monitoring that are carried out to determine and achieve the targets set through the use of human resources and other sources.

Well, from the various definitions, it can be concluded that management is a process of planning, directing, organizing, and controlling activities to achieve organizational goals effectively and efficiently through the use of organizational resources.

Management function

There are at least four main functions possessed by management, namely:
Planning (planning)

In this function, management has a role in setting goals or objectives to be achieved by the organization, then planning the best way to achieve these goals. Depending on the scale of the company, this plan can usually be done several times, namely for the benefit of the company as a whole and break down again in more detail for each division. Usually, managers will evaluate various alternative plans before choosing what plan to choose and the most suitable to be implemented to achieve company goals.

Planning is arguably the most important basis of the entire business management process. Consider planning as the foundation of a house that must be built strongly. Without careful planning and detail, your business process might not work as expected.


After planning carefully, it’s time to change the plan into something real. However, for that, you need to make sure that certain tasks or activities are done by the right people. This is where the organizing function will help you. Usually, organization in a company is divided based on the main functions, such as marketing, accounting, production, administration, and so on.

Well, each of the main functions is ideally known by each manager who is responsible to the president director. Organizing can also be done by determining what tasks must be done, who should do it, who is responsible for the task, to the extent to which decisions must be made.


At this stage, each member of the team ideally knows what they have to do to achieve the company’s goals. Even so, they still need encouragement in order to continue to be motivated to work. This is where the function of directing in management is needed. Usually, the directing role is carried out by a manager in each division. They will conduct guidance through influencing and motivating methods.


In order for every process in management to run optimally and according to plan, it is necessary to apply the control function. Generally, the control function includes four activities, namely to determine achievement standards, measure achievements that have been achieved, compare achievements that have been achieved with achievement standards, and make improvements if there are deviations from predetermined achievement standards.

4 Types of Management Required for Business

In order for the business to run optimally and in accordance with a predetermined plan, several other types of management are needed, namely:

Financial Management

As the name implies, financial management functions to regulate the company’s finances so that cash flow is stable so that expenditure is not greater than business income. With financial management, all components of business finance will also be neatly recorded, making it easier for you to analyze and increase opportunities for more accurate and strategic decision making.

To be more optimal, the use of technologies such as Sleekr Accounting is highly recommended because it can do banking integration with an automated system. All financial data, from profit margins to accounts payable is also available in real time so you can always get the latest data.

HR Management

There are many elements that play a role in business success. One of the most important is human resources (HR). Humans are the ones who have control over other elements, for example money, material, or machinery. Because of its crucial role, special handling is also needed, which is also called HR management. With the right management, HR is expected to be able to work together well, effectively and efficiently so that the goals can be achieved.

Operational Management

In business, operational management can help you to ensure that daily operations are carried out according to the plans and policies that apply. These operational activities cover everything related to the production process, from raw materials, machinery, technology to the methods applied in converting raw materials into certain products.

With operational management, you can ensure the best quality for raw materials, know the amount of raw materials that must be provided, the time needed in the production process, how to do time and energy efficiency, and many others.

Marketing Management

In order for the product to reach the user’s hand, you need marketing. Especially if your product is classified as new, then you must be a more active party to do a promotion to make the target market know the presence of your product. It is the marketing process that can help you in this matter, namely through a number of choice strategies that have the highest opportunity to bring success.

Management Elements

In business, there are six elements that influence the success of a business. These elements are interrelated and cannot be separated from each other. If one element does not exist or is not optimal, it can make it difficult for the company to achieve its objectives. Here are the elements:


It is no exaggeration to call human resources the most important element in business management. In the absence of humans, companies cannot determine goals and develop the best plans to achieve these goals. Humans are the ones who control the other elements of the business.


Since the beginning of establishing a business, money has become one of the most crucial things, namely as capital. Apart from being a medium of exchange, money can also function as a measure of value. The success of an activity or sale can be measured based on the amount of money circulating in the company.

As an element of management, money can help you to calculate business rationally. This is related to how much money must be provided to buy a new machine, to pay the employee’s salary, to how much to get for profit.


There are two types of ingredients in the ingredients, namely semi-finished materials and finished materials. In the absence of materials, we can be sure that you will have trouble producing the product you want to sell. All plans drawn up can be useless and prevent the company from achieving its goals.


You already have the ingredients needed to make the product. However, the production process can be hampered if you do not have a qualified machine. Also keep in mind that in this case, the engine is not only limited to factory machines to produce goods. Machines such as computers, printers, and photocopiers also have important values ​​in your business processes.


This one element helps you and the team to run each management process effectively and efficiently. Therefore, you need to determine the best method to be applied in the company. From here, continuity will usually be found between one division and another division so that you and all employees can work side by side properly.


No matter how good the quality of the product is created, it will be useless if there is no adequate demand or market. If this happens, chances are that the production process will stop, threatening the company’s success. Therefore, you also need to do marketing to attract the attention of your target market. Arrange strategies that can attract them.

Management is needed in every business or business. In order for the process to run smoothly, there is no harm in using software technology such as Sleeker Accounting which can simplify your accounting system. Starting from making financial reports, journalism, invoice monitoring, business performance, to debt and receivables, all can be done with data stored in a systematic and safe manner. This certainly will greatly facilitate you in taking various important decisions.

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This Is the Difference Between Financial Statements of Trading, Service and Manufacturing Companies

In any industry, whether it is a trading company, service, or manufacture, certainly has various departments with their specific tasks. In plain view, these departments appear to have no dependence on each other. However, in recording financial statements, in the end they will be connected by one party named the accounting and finance department.

The accounting and finance department will be tasked with recording each company’s activities and actions related to money in a period of time. After that, they will arrange everything neatly in the form of financial statements. They then conveyed it to various stakeholders, such as investors, creditors, or the government with their government institutions.

Financial statements are also often regarded as accounting end products. That is, the report serves as a service activity that aims to provide quantitative information and is useful in making economic decisions. A financial statement consists of several main components, namely a balance sheet, a profit and loss statement, a cash flow statement, and a report on changes in shareholders’ equity.

According to the International Accounting Standard Board (IASB) contained in the EDUpristine website, the main purpose of financial statements is to provide information about position, performance, and changes in financial position. This information will be used by many parties, some of which are: company management to plan, analyze, benchmark, and make decisions for a company; investors, promoters, or creditors to assess whether the company is eligible for financial assistance; or also useful for shareholders to find out various aspects that occur in a company.

Then, from all the explanations above, is there anything that distinguishes the preparation of financial statements for trading, service and manufacturing companies?

The answer is yes, but not much. If viewed from the perspective of the overall accounting process, the preparation of financial statements between trading companies, services, and manufacturers does not have a big difference. One thing that differentiates the three industries above is only about the company’s products.

Trading Company Financial Report

In trading companies, the products being traded are finished objects. The sales system is only by reselling the product to others while raising the initial price slightly. This price difference is the business advantage of a trading company. While in manufacturing companies, products that are traded are more varied. This product can be in the form of finished goods, raw materials that must be processed first, or processed raw materials but still in the form of raw materials.

Generally, financial statements of trading companies are divided into several types. They are income statement, balance sheet, cash flow statement, and statement of changes in capital. Each type of report has a function and provides different data, depending on the needs of your trading company.

Service Company Financial Report

Products in service companies are the most different. If the previous industry emphasized goods as a business product, the service company carried out its business activities by selling certain services. Therefore, differences in financial statements in all three industries are in the inventory and purchase section.

When a purchase occurs at a service company, it will usually be included as equipment or equipment. In the financial statements of service companies, there is no cost of goods sold (HPP) or applicable cost accounting.

Manufacturing Company Financial Report

Quoted from the Accounting ID website, inventory and purchase of a trading company consisting of several types. They are inventories of merchandise, buyers, and there are cost of goods manufactured. However, for manufacturing companies, supplies and purchases consist of inventory of raw materials, inventory in the production process, supplies of auxiliary materials, inventory of finished goods, purchases, and there are product sales prices (HPP) and cost accounting.

Whereas because service companies do not sell products, they do not have inventory and cost of goods sold. All types of purchases at service companies will fall into the category of equipment or equipment.

Now, you already know the basic difference between the financial statements of trading companies, services, and manufacturers – which are distinguished from the types of business products. However, whatever product you sell, you can arrange financial statements more easily and practically by using Sleeker Accounting. This cloud-based accounting software allows you to control financial statements in real time and is safe from anytime and anywhere.

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The Importance of Employee Mobile Applications for Today’s Companies

Today, the trend of mobile working has become increasingly popular since the internet can be easily accessed. Smartphones are not only used for communication purposes, but also for work purposes. In addition, employee mobile application development is also becoming increasingly well-known in corporate circles. With application development, managers and CEOs can monitor all company conditions anytime and anywhere efficiently. That is why every company must ensure its company supports mobile access for employees, and provides optimal employee communication.

Building Application Systems According to Company Needs

In general, every company must also develop the system by building applications according to the needs of the company. Both application development is done in-house and using external IT vendor services. There are things that need to be ensured so that the application development can run well and the company’s losses due to process inefficiencies can be minimized.

1. The main purpose of the application. Make sure the application goals are clearly defined, to determine the application development requirements and what needs to be prepared.

2. Technology to be used. After determining the purpose of application development, the next step is to decide what technology to use. This depends on the application to be developed. Will the application be specifically designed for mobile, desktop only, or both? Make sure your company uses appropriate technology and can maximize the functionality of your application.

3. Selection of developers, whether resource or vendor. If you decide to use an external vendor, you must make a comparison by making a tender or pitching to find out the market price and the quality needed. Also make sure to make work transparency agreements from the start so as not to be fooled by the vendor, and to avoid data leakage.

4. Software / System Development Life Cycle (SDLC), is a planning model used in project management, which can describe the stages involved in information system development projects. Starting from the concept and initial feasibility study to application maintenance that has been completed. Implementing SDLC in the development of this application will greatly assist the development and sustainability of the application functions.

5. The documentation on the application must be made in accordance with the application that was built and always updated for further application development. Usually, the process of data documentation becomes a forgotten thing for developers who only focus on building applications. In fact, it is very important to be able to create integration between applications so as not to experience a difficult process in the future. For example, the difficulty in finding data stored in the application database.

Creating a Mobile Communication Strategy

Here are some things to consider when creating a mobile communication strategy that needs to be understood:

1. Especially in large companies, where employees can be in many different countries and time zones, the process of direct communication will be a difficult thing to do. An easily accessible employee mobile application can unite messages from your entire company. Because everyone uses the same application regardless of geographical boundaries or time zoning.

2. Teaching new employees in a long way is of course boring and confusing. When new employees start contributing to the company, the mobile application will simplify the process and provide a new first impression to the new employee.

3. Using a mobile application is a good recruitment strategy. You can find and get employees more easily. In addition, the application can also bring the company to a new culture to enhance the recruitment experience. You as a recruiter can use an existing application, then the application can introduce your company to job seekers to find your company easily on the internet.

MySleekr Employee Mobile Application

Sleekr provides a mobile feature called MySleekr that can provide HR management solutions for thousands of companies in Indonesia. With the MySleekr employee mobile application, all company employees can do attendance anytime and anywhere, apply for leave, claim to see the pay slip data through their respective smartphones. Submission of leave and claims becomes very practical and easy, as is the approval. With MySleekr, every employee can update their data without the need to open a laptop or computer. Now, MySleekr can be downloaded via Google PlayStore and AppStore. It’s good if your company registers for free first to use this Sleekr application.

For companies that want to attract and retain younger employees, of course they must make employee mobile application-based communication a priority. Without a mature and optimal mobile communication strategy, the company will lag behind other companies. At present, the development of mobile applications specifically for productivity is still a favorite choice aimed at various things. Starting from the means to report the work of employees, attendance, and management of a project. Try Sleekr’s HR software now and see how to Sleekr will provide a lot of convenience and benefits for your company.

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Planning & Components in Business Management You Need to Know

Business is an activity that can provide many benefits for anyone who can do business management well. So what is the understanding of business management? And what strategies should be implemented to start a business? Let’s look at the information below.

Definition of Business Management

Business management is an activity in designing, managing, and operating a business or business that includes all arrangements both from the process of work, management to how to achieve a desired business goal.

Planning in Business Management

Plans in business are certainly important points that play a role in success for business people. Regardless of status as a beginner or senior, good business management will be able to bring business to a better direction too. In addition, resistance to all types of challenges and obstacles can also be important factors in the course of your business. Strategies in doing business must also be able to be arranged to be able to find out trends in the market so that businesses stay afloat.

Considering that the business plan is like a written development concept in business, then all descriptions of management, management, finance, development to target and marketing must also be planned perfectly. Don’t ignore short-term to long-term achievement targets. Overall business planning with mature details will make a picture of the business, can be more visible and make you easier to run.

Important Components in Developing Business Management

a. Clear Business Description

Whatever business you will run, make sure to have a clear business description and be able to be easily understood by everyone. The business description must include the forms and products that will be sold or offered, profit and loss, operating costs, pegged prices, to the working system of a business. Include the company’s vision and mission and the goals to be achieved. Do not forget to describe also related to core management such as business location, concepts from management, target markets to the advantages possessed.

b. Perform Competitor Analysis

Furthermore, you also need to do an analysis of competitors for your business. This is so that you can create a strategy that is right for your business. Perform analysis and in-depth observations so that you can find out in terms of weaknesses and strengths of competitors.

c. Have a Marketing Strategy

With a good marketing strategy, the potential to get success in the market can be obtained. Be sure to plan your business management appropriately from costs, product promotions, places, promotional targets, to media to promote. Plan the entire budget in detail so you can calculate all the possibilities.

d. Financial statements

Don’t let you underestimate your company’s financial statements because this is a very important thing. Be sure to learn it first. Financial statements are not only complex and complex, but you can make them simple, provided they cover everything. Budget management is also an important factor so that financial statements are always good. Plan the budget thoroughly so that you can easily make financial statements. Always honest and transparent when making financial reports so that progress and business development can be seen.

e. Maintaining Product & Service Quality

The products and services that you provide are important points in the course of business management. By having quality products and services that make many consumers satisfied, it is certain that your customers can be more loyal and loyal. But don’t let it be because the consumer loyalty makes you become complacent so that the quality of the products sold decreases. Maintain all the quality so that you can remain trusted by consumers.

Certainly a good business management, must be supported by tools to help manage the business efficiently such as the use of online accounting software that will help manage business finance to run in an orderly, healthy and planned manner. Entrust support for your business financial management in an online accounting software journal that will facilitate monitoring cash flows, obtaining financial reports instantly, sending bills, obtaining cost calculations and much more. You can get full information about the Journal here, and get the ease of managing business management with us.

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Financial Ratio: Know the Benefits of the Coverage Ratio

Coverage Ratio (Coverage) is a Financial Ratio used to measure a company’s ability to pay its liabilities. At a glance, the Coverage Ratio might sound very similar to the Liquidity and Solvability Ratio. However, there are actually differences with these two ratios. Simply put, the Coverage Ratio analyzes the company’s ability to pay off debt and other forms of bonds.

More specifically, the Coverage Ratio measures how well the company is able to make interest payments related to their debt or bonds. Several types of ratios in the Coverage Ratio include components of bonds that are not included in the liability component. One form of the bonds is the payment of regular dividends to shareholders. The following are the types of ratios included in the Coverage Ratio used to analyze the company:

Interest Coverage Rate

The ratio of Times Interest Earned is also commonly called the Interest Coverage Ratio. The metric measures the amount of profit before tax and interest used to pay interest costs in the future.

Interest Coverage Ratio expressed in units of numbers and not by percentages. This number shows how many times a company can pay interest with profit before tax and interest. So, obviously the larger number of ratios is considered to be more profitable than the smaller ratio.

As an illustration, if the amount of Interest Coverage Ratio produces 4, it means that the company generates sufficient income to pay the total interest expense 4 times. In other words, the company’s income is 4 times higher than the interest cost in a period that is used as the basis for calculation.

Creditors will like the company with a higher Interest Coverage Ratio. Because this shows that the company is able to pay interest payments when due. A higher ratio also implies low credit risk. While the low ratio shows high credit risk.

The formulations of this ratio are:

Profit before Taxes and Interest ÷ Interest Fees

Fixed Cost Coverage Ratio

Fixed Cost Coverage Ratio is a financial ratio that measures a company’s ability to pay all its costs or fixed expenses with profit before tax and interest. Basically, the Fixed Cost Coverage Ratio is a development version of the interest coverage ratio. The fixed cost component included in calculating this ratio is like lease payments, insurance, preferred stock dividends, and others.

This type of ratio shows investors and creditors how well the company’s ability to pay its fixed costs. Similar to the Interest Coverage Ratio, this ratio is expressed in numbers and not percentages.

Coverage Ratio High fixed costs show a healthier and less risky business. This means that the company has more income to pay off its fixed costs. While a low ratio indicates that the company has not been able to cover its fixed costs. The age of the company that has a low or even minus Fixed Cost Coverage Ratio can be said to not last long. This is bad news for creditors and investors.

The formulations for this ratio are:

(Before Tax and Interest Profit + Fixed Cost before Tax) ÷ (Fixed Cost before Tax + Interest Fee)

Debt Service Coverage Ratio

Debt Coverage Ratio is a ratio that measures a company’s ability to pay current debt. Furthermore, this ratio shows the ability of the company to pay off the costs and principal of debt and smooth bonds with net operating income. In other words, this ratio compares cash from the company’s operational activities with interest costs and short-term Sinking Fund Obligation.

This ratio is specifically paid more attention by creditors than investors. Creditors don’t just want to know the amount and cash flow of a company. They also want to know how much current debt the company has and the cash available to pay the debt costs.

Unlike the Debt Ratio, Debt Coverage Ratios consider all costs associated with debt. This includes interest costs and other obligations such as pension obligations and reserve fund bonds. Therefore, this ratio is more able to show the company’s ability to pay its debt than the Debt Ratio.

For example, if the amount of the company’s Debt Coverage Ratio shows number 1, it means that the company’s net operating profit is equal to its debt obligations. In other words, the company generates enough income to pay for its current debt. If the number is less than one, the company does not have enough operating profit to pay its current debt and must use a portion of its savings.

Generally, companies with a higher Debt Coverage Ratio tend to have more cash and are better able to pay their current debt obligations in a timely manner.

The formulations for this ratio are:

Operating Income ÷ Total Debt Service Costs (Total Debt Service Costs)


Coverage Ratio is a Financial Ratio that can better explain how a company pays its obligations compared to Debt Ratio and Solvability. And so that management can consider the ratio, they certainly need financial statements. Today, Financial Reports can be generated quickly and automatically through the use of Accounting Software. One of the Accounting Software that can meet these needs is Journal.

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Important Role in the Advancement of Online QQ Sites

When joining in a poker website To be sure you want to meet with an agent, but do you know if an agent has an important role in the progress of a site About this because agents have a role that is no less important, do not be surprised if an agent can help a website to progress. The game application is Web Domino Gambling Agent qq online Trusted Indonesia, Online Game Application, Online Poker, Online Gambling Card which has long served professional players in Indonesia and has been known as the Indonesian Online Poker Website, the Most Trusted Online Gambling Online Poker Website, the Qiu Qiu Online Online Agent and the Domino Online Online Gambling Agent and the Most Online Capsa Online Gambling Agent and the DominoQQ Online Gambling Website and the Most Trusted Online QQ Bookie Website Cheap Qq Deposit Gambling That Can Make Cheap Bets Collection of Information Notes Website Gambling Poker QQ Domino99 Bandarq Online Trusted 2020 The Most Complete And Most Popular Game Pkv Game Server Here.

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Financial Ratios for Assessing Capital Structure Decisions

When analyzing financial health and growth potential of a company, one of the business owners and investors depends on the value of the Financial Ratio. And of course what you are looking for is the Financial Ratio that shows how the company’s activities are funded and how effectively the funding is used. In other words, investors want to see how the company optimally and effectively uses its capital structure.

A Brief Definition of Capital Structure

Capital structure is the allocation of debt and equity used by companies to fund operational activities and company expansion.

Equity capital is funds invested by the company owner to the company and retained earnings that represent profits from previous years. Which is where the funds are not distributed to shareholders as dividends. However, these funds are more used for debt financing or business expansion.

While debt capital is a corporate loan fund which is usually in the form of long-term bonds and other debt instruments. And the debt instrument is used to fund the company’s operational activities.

Companies tend to try to optimize their Capital Structure to achieve flexibility and healthier and stronger financial conditions. Optimizing Capital Structure means that a company must achieve certain Financial Ratio values ​​that reflect the use of debt and equity effectively for the survival of the company.

The financial ratio that most reflects the optimization of the Capital Structure is the Debt Ratio to Equity (Debt-to-Equity Ratio) and the WACC (Weighted Average Cost of Capital). The two types of Financial Ratios proved to be very influential in reflecting the optimization of the Company’s Capital Structure based on the results of several studies related to Capital Structure.

Debt Ratio to Equity

As the name implies, Debt Ratio to Equity compares total liabilities or company debt with total financing from its equity. High Debt to Equity Ratios indicate that businesses receive a proportion of debt funding that is greater than their equity funding.

Lower Debt to Equity ratios usually indicate a more financially stable business condition. Unlike equity financing, debt must be repaid to the lender or creditor. Because debt financing also requires payment of loan principal and interest, debt can be a form of financing that is far more expensive than equity financing. Companies that use large amounts of debt may be at risk of not being able to pay off debts and borrowed interest.

Debt Ratio to Capital in the Eyes of Investors and Creditors

Creditors view companies that have high Debt to Equity Ratios will be more risky. This could be because investors don’t want to fund the company as much as funding from creditors. In other words, funds from investors do not have as much portion as creditors. The implication is that investors do not want to fund business operations because the company does not have good performance. Lack of performance may also be the reason why companies seek financing or funding more than debt instruments.

A large amount of debt usage is generally also considered a sign of risky business practices. The rule is that the source of funds for payment or repayment of debt is required regardless of the main income of the business. Companies with high Debt to Equity Ratios and financial performance declines must continue to pay their debts. Even if the business fails to generate enough revenue to cover it, it is also still mandatory to pay off its debt. Of course this can quickly cause a loan to default and end bankruptcy.

In general, lower Debt to Capital Ratios are favored by investors and creditors.

Formulation of Debt Ratio to Equity is:

Total Liabilities / Total Equity

As a simple example, PT Santuy has financial information in the form of total short-term and long-term liabilities totaling Rp120,000,000 and shareholder equity of Rp.230,000,000. Then, the value of the Debt Ratio to the Equity is 0.52.

Weighted Average Cost of Capital (WACC)

The WACC or Cost of Weighted Average Capital is the Financial Ratio that calculates the company’s funding costs for acquiring assets by comparing the debt structure and business equity. In other words, this ratio measures the true weight and cost of debt and the collection of equity funds to fund the purchase of assets and expansion of new capital based on the current level of capital structure of the company.

Management usually uses this ratio to decide whether the company must use debt or equity to finance the purchase of new assets. This ratio is fairly comprehensive because this ratio averages all sources of capital. The sources of capital include long-term debt, ordinary shares, preferred shares, and bonds. And of course this ratio is also very complex. Finding out the cost of debt may be fairly simple.

Long-term bonds and debt are issued with nominal principal and interest rates that can be used to calculate the total cost. But for equities, like ordinary shares and preferred shares, they don’t have a fixed price. And to find out the WACC value, you must calculate the equity price before applying it to the equation.

That is why many investors and creditors tend not to focus too much on this ratio. Estimating the cost of equity is based on several different assumptions that can vary from investor.

1. WACC function

Simply put, the WACC formulation helps management evaluate whether the company must finance the purchase of new assets with debt or equity by comparing the two cost options. Financing the purchase of new assets with debt or equity can make a big impact on the company’s profitability and overall stock price. Management must use the WACC equation to balance stock prices, investor return expectations, and total asset purchase costs. Executives and board of directors use the WACC to assess whether merger decisions are potentially good or bad.

On the other hand, investors and creditors use the WACC to evaluate whether a company is worth investing or given a loan. A high WACC percentage indicates the overall cost of funding a larger company and the company will have less cash to distribute to shareholders or to pay off debt. With the increase in the average cost of capital, companies tend not to create more value for investors and creditors. So that investors and creditors tend to look for investment opportunities from other companies.

2. Complexity of the Application of WACC from the Viewpoint of Financial Analysts

Assume that the company generates an average return of 15% and has an average overall capital cost of 5% every year. The company basically generates returns of 10% for every Rp1 invested or lent. An investor and creditor see that the company will only generate Rp.1.1 for every Rp1 invested. And this Rp. 0.1 value can be distributed to shareholders or used to pay off debts.

When reversed, assume that the company only produces 10% returns at the end of the year and has an average overall capital cost of 15%. This means that the company loses Rp. 0.05 from every 1 rupiah invested because the cost of capital is higher than the return. There are no investors or creditors who are interested in companies like this. Management must work to restructure funding and reduce the company’s overall capital costs.

It is not easy to use WACC as an indicator of financial analysis. Plus there are many different assumptions regarding the cost of equity. That is why many investors and capital market analysts tend to produce different WACC figures for the same company. It all depends on what the estimates and assumptions used by each investor and analyst. This is why many investors use this ratio only for speculative purposes. And they tend to use analytical tools or other financial ratios for more concrete and appropriate investment decisions.


Debt Ratio to Equity and WACC is an analysis tool that has been used by management to look for optimal Capital Structure decisions. By understanding these two ratios, at least both investors, creditors, or management can find out whether the company has used funding sources appropriately and effectively. Regarding the Financial Ratio, you can see the information from the information provided by the Financial Report.

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Factors Causing Bankruptcy Companies to Know

According to the Trade Financial Encyclopedia, bankruptcy is a situation where a person who is declared bankrupt and whose assets or inheritance is declared to pay off debt. Whereas according to the Bankruptcy Law, it can be interpreted as a general seizure of all the assets of a Bankrupt Debtor whose management and settlement is carried out by the Curator under the supervision of the Supervisory Judge as stipulated in the Law.

Bankruptcy is a threat that is very possible for anyone who manages a business or business. The threat does not only apply to newly established companies, but also for companies that have been established for decades. Every company has the potential to go bankrupt, even though the probability is only 0.01%. Bankruptcy will be a very frightening thing for the company, because the company is in a threatened position and could be destroyed. Learn more about the factors causing the bankrupt company below.

Terms of the Company Declared Bankruptcy

According to the Law, a company can be said to be bankrupt if a company has fulfilled bankruptcy juridical requirements. These conditions according to Article 2 of the Bankruptcy Law include the existence of debtors who have two or more creditors and do not pay at least one debt in full which is due and can be collected, declared bankrupt with a court decision. Creditors in this case are creditors both concurrent, separatist creditors or preferred creditors. While debt that has matured means the obligation to pay debts that have fallen due, both because they have been agreed, because of the acceleration of billing time in accordance with the agreement or because of court decisions, arbitrators or arbitral tribunals. Bankruptcy applications according to the Bankruptcy Law can be submitted by the debtor, one or more creditors, prosecutors, Bank Indonesia, Securities Companies or Insurance Companies.

Causes of Bankruptcy Companies

There are several factors causing bankrupt companies, including the following:

  • Not able to capture the needs of consumers, so companies can provide services or products received by the market
  • Too focused on product development, so companies can forget consumer needs.
  • Companies that are too focused on product development will lose sensitivity to what is happening in the company, outside situations, and so on.
  • Experiencing excessive fear, such as fear of going bankrupt, fear of loss, fear of not being able to serve consumers, fear of inability to overcome problems, and others. actually the fear is natural. However, if these fears have exceeded normal limits, then these conditions must be watched out for because it will hinder the company’s performance and bring destruction.
  • Stop to innovate in business. Important innovation to be carried out by every businessman or businessman. Because without innovation, products that are sold over time will be boring for people who are the target market.
  • Lack of observing the movements of competitors or competitors, so that it will cause a company to compete and lag behind. A company must always pay attention to the steps taken by competitors.
  • Set prices too expensive. Indeed, there are some people who believe that high prices will make a company’s products look better and more luxurious than the original. However, what happens if there is a new company that issues a product similar to your company’s goods and sells it much cheaper. Then chances are your company will be left by consumers.
  • Other causes such as debt, excessive expansion, CEO fraud, corporate management errors, uncontrolled expenditure, and much more.
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