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Small Business Is Not a Little Big Business
Resource poverty distinguishes the management of small businesses from that of big businesses. An examination of fundamental financial concepts, such as cash flow, break-even analysis, return on investment, and debt-equity ratio demonstrates how small businesses adapt these financial management tools to their particular situation. An emphasis on liquidity, rather than profit, helps small businesses overcome the problems of strained financial resources, lack of trained personnel, and short-range management perspective imposed by a volatile competitive environment.