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Get Started in Shares by Glen Arnold

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A multiplicity of factors

What are the influences on the future flow of income from your corner shop? One key factor is the quantity of assets. Does it have a large or small display area? with plenty of stock or little? We might also be interested in the assets because an alternative to receiving future income is to sell off the assets – perhaps to that property developer who has been making generous offers.

On the flip side of the assets factor, the future profits might be vulnerable because the company has massive liabilities, e.g. a large bank loan relative to the value of assets. If there was a downturn in business or a rise in interest rates, the company would be forced to pay interest regardless, which could reduce profits and in extreme ...

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