Is Your Business Over Weight? How to Determine the Financial Health of Your Business

So, how do you know if your business is "over weight"

? Take a look at your debt to equity ratio (total liabilities divided by total equity). Compare that to your industry average and you'll have a pretty good indicator of your business' weight. Too much debt and not enough equity means your business is, in fact, overweighteven if your current period income statement looks healthy and you have money in the bank. Because everything shows up on the balance sheet, you can rely on it to depict the financial health of your business.

Is Your Business Over Weight? How to Determine the Financial Health of Your Business

By: Kelly Totten

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