#Immediacy on speech making

The various items in the balance sheet are usually valued at website ...

The various items in the balance sheet are usually valued at website value. What basis should be used for tied capital? As described in the section above, there are three different ways in which an article can be valued, depending upon circumstances and the reason for the valuation. For instance, if the business is being valued as a going concern, the tied capital should be estimated on a replacement value basis.

On the other hand, if the business is folding up or you are studying what would happen if it did then the tied capital should be valued on a sales-value basis.

This would be under 'distress sale' conditions and the proceeds would probably be considerably below the normal sales value.

The value of liquid capital would, by definition, be the same in either of the above cases. It would be the total cash and bank balances available plus the cash obtained from realization of securities and short-term investments, less any selling expenses, commission, etc. Adding this to the total tied capital would give the financial resources available to the business under the particular conditions studied.

The calculation of the total financial resources is likely to be infrequent and done only when required. Different elements are, however, likely to be calculated with a different frequency. For example; property is unlikely to change in value very rapidly and is expensive to value professionally.

Consequently, this is likely to be reviewed only every three or more years. Many items will be reviewed annually, as part of the Annual Accounts.

At the other extreme, the cash balance is likely to be checked at least weekly and, in many cases, daily. Potential resources. So far we have discussed only the financial resources available within the business itself.

There may well be other resources which could be made available if necessary. The first obvious source is yourself, if you still have anything left after starting the business. Most people are surprised to discover how much they are worth, so let's try it. Take a sheet of paper and list what you are worth.

Put down all your assets now and we'll sort out later those which are untouchable. To stimulate your thinking, write down the following headings and, any others which occur to you. Put against each one its estimated sales value, less any selling expenses and HP or credit payments outstanding.

Cash in hand, bank current and deposit accounts, building-society accounts, national and ...

Cash in hand, bank current and deposit accounts, building-society accounts, national and trustee savings bank accounts, savings certificates, premium bonds, unit trusts, stock... read more

Add items above to give your total financial resources. How does this ...

Add items above to give your total financial resources. How does this figure compare with that in your last ... read more

Of course, if you can manage a smile as well, this goes ...

Of course, if you can manage a smile as well, this goes a long way. It also helps if you can listen as well as talk. Customers If you didn't know it before you started your business,