Protecting Ourself Knowing Affordability

In the 21st Century
Protecting Ourself Knowing Affordability.

Does a person able to pay off his or her monthly expenses through monthly income (short run)?
* In the business, I treat it as current ratio (short term)

Does a person able to make borrowings more than capable monthly income (long run)?
* In the business, I treat it as retained earnings against long term borrowings. (long term)
If the retained earnings more than long term borrowings, it does quite mean able to payoff.
If the long term borrowings more than retained earnings, it does quite mean need borrowings.

Let's see,
AirAsia Bhd, long term borrowings is larger than the many years of total of retained earnings / profit in the operation. How about Malaysian Airline System Bhd?
The result is quite unfavorable if we compare it side by side with the MAS accumulated losses instead of retained earnings from years of operation.



Full view Biz Sustainability Long Term and Short Term
Download Biz Sustainability Long Term and Short Term

For personal monthly source of income, it would be wise that:
a) one third to pay monthly installment
b) one third to pay monthly expenses
c) one third to save it.

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