You are looking to start a new business. You have your business idea but now nee

Question

You are looking to start a new business. You have your business idea but now need to look at the financial side. In your paper answer the following questions when discussing your business idea and what you need to do in order to get started. •Come up with a business idea. •Choose two potential headquarter locations and find at least two banks in each area where you could potentially open a checking account. •What is needed to open a checking account at each bank? •What are the fees you would have to pay (monthly, for each check, overdraft, etc.)? •Include also any other factors you would use in making your decision. •Using your two potential locations, what would the state tax rate be? How do these rates compare to each other? How do the rates compare to neighboring states? Would you consider moving your business to another state in order to have a better tax location? Why or why not? •You want to find what a similar company’s financial status is to see if your idea is feasible. Find a public company that has a similar idea to your business and locate their most recent financial statements. Calculate the liquidity, leverage, efficiency, and profitability ratios. (Note: You may need to stretch your business idea slightly in order to find a similar public company that discloses their financial statements.) •Is the business in good financial standing? •What suggestions would you make to improve their financial standing? •When your business is open, you want to offer a markdown on certain merchandise to draw in new customers. •How will you decide how long you should run the markdown? •How will you decide if you should permanently list some merchandise at a lower price?

Explanation / Answer

(a) Open a checking account =

a bank which pays little or no interest, but from which the customer can withdraw money when he or she wants by writing checks.

Also called cheque account

(b) Benifite to open a checking account = like overdraft , online and mobile banking , debit card , direct deposite , check fecility and safety and security also overdraft choices .

(c) No need to pay any  fees you would have to pay (monthly, for each check, overdraft, etc.

(d)

The tax rate schedules list tax rates for Federal income tax only. It does not include state income tax. To account for "overlapping" levels of taxation (i.e., the fact that you can deduct state income tax payments on a federal tax return if you itemize deductions), to determine your combined (federal and state) income tax bracket, use the following formula:

(100% - Federal tax bracket) x State tax bracket = Effective State bracket

State tax rate is depend upon the following factors like in availability of man power in resionable rate , availability of water , electricity , and transpotation facility . these are the some following parameters due to which company can move from one state to another to get the benefits of these facility .

(e) Liquidity =

The liquidity ratio, then, is a computation that is used to measure
a company's ability to pay its short-term debts. There are three
common calculations that fall under the category of liquidity
ratios. The current ratio is the most liberal of the three.
It is followed by the acid ratio, and the cash ratio.

Liquidity ratios attempt to measure a company's ability to pay
off its short-term debt obligations. This is done by comparing a
company's most liquid assets (or, those that can be easily
converted to cash), its short-term liabilities.

(f) Leverage =

Companies rely on a mixture of owners' equity and debt to finance
their operations. A leverage ratio is any one of several financial
measurements that look at how much capital comes in the form of
debt (loans), or assesses the ability of a company to meet financial
obligations.

There are several different specific ratios that may be categorized
as a leverage ratio, but the main factors considered are include debt,
equity, assets and interest expenses.

(g) The inventory turnover ratio shows how efficiently a firm has
used its inventory. This is important in a small business,
where storing excess inventory can be an unwanted burden and cost.
Calculate your inventory turnover rate to see how efficient your
business is. In general, you want to maintain a high ratio
-- meaning that you have sold out your merchandise numerous times.

The following steps which are helpfull for calculation of Efficiency
of the company .
1> Locate the net sales on the income statement .
2> Locate the total inventory on the statement of financial position
also known as the balance sheet.
3> Deviding the net sales by your inventory.

(h) A class of financial metrics that are used to assess a business's
ability to generate earnings as compared to its expenses and
other relevant costs incurred during a specific period of time.
For most of these ratios, having a higher value relative to a
competitor's ratio or the same ratio from a previous period is
indicative that the company is doing well.

Answer

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