Reply to this classmate on the discussion board with 100 words

Finance plays a key role when growing a business. Businesses must consistently monitor their profitability and financial status. The purpose of financial management is to create a financial plan and utilize gathered data to make sound and beneficial financial decisions.

Financial management touches almost all aspects of a business. It determines the projects or products in which the company invests, the debt it accrues and how to spend the profits or cover the losses generated by the business.

Financial managers leverage many tools to monitor the health of a business. They use liquidity, asset management, debt management, coverage and profitability ratios to judge the performance of the company and to make future decisions for the development of the business.

I did own a small LLC so of course I was heavily invested in tracking income and expenditures to monitor the overall success of the business. My financial knowledge was limited but after a year I determined the business was not profitable enough to justify my time and effort. I never incurred any debt so I never had to deal with investors or shopping for interest rates.