What is internal bank rating?
It’s the bank’s model that scores your risk with variables of solvency, liquidity, profitability, seniority, sector, and payment behavior.
What should be included in a weekly treasury budget?
Include daily inflows and outflows, opening and closing balances, expected taxes, and payroll and debt due dates.
What values for DSO, DPO, and DIO are “good”?
DSO (days sales outstanding), DPO (days payable outstanding), and DIO (days inventory outstanding) depend on the sector, seasonality, and bargaining power.
What is WACC and what is it used for?
WACC, the weighted average cost of capital, is the minimum return required by shareholders and creditors according to their weight in the financial structure
Leasing vs renting for equipment: key differences
In leasing you acquire an asset with a purchase option at the end, with specific accounting and tax effects. Renting includes maintenance
What are financial covenants?
Covenants are commitments, usually between a bank and a company, to maintain certain ratios and limits in your financing contracts
What is CCR and why does it matter?
The CCR, Risk Information Center of the Bank of Spain, records your debts and guarantees with financial institutions.
How to use confirming to obtain discounts?
Confirming, or supplier advance payment, allows the bank to pay your suppliers earlier while you settle at maturity.
What is the debt service coverage ratio?
The debt service coverage ratio compares operating cash flow with the installments and interest payable in the period.
When am I required to audit the annual accounts?
When during two consecutive years you meet at least two of these three limits: assets exceeding 2.85 million euros
