Small and large companies are different in size and management; therefore, there are certain financial ratios that are useful to a large company. Three ratios are useful to a small business owner. AR Days or simply “days of receivables,” is ratio that is used to determine the average days of revenue that are held up in the form of receivables (Bull, 2008). Depending on the days, that it takes clients to pay for their supplies or bills, days of receivables varies from business to business. Longer days of receivables means that more revenue is held up, and this may be a problem because clients become reluctant to pay of the AR Days are long. Debt-to-assets is a ration of assets to liabilities. This ratio reveals how the business is being supported by debt. The other ratio vital to a small business is the quick ratio, which is the ratio of current assets to current liabilities. It reveals how short-term operations are supporting the overall costs of the company. These ratios are simple compared to the ratios that are vital to a manager of a large company because large companies have complex financial structures, multiple investment options and taxation, which small business may be exempted from (Bull, 2008).

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