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September 11, 2009

Know, where your business stands financially

Analyzing the financial position of an organization plays one of the most significant roles in enhancing the business of that organization. Without having a detailed idea about the accounting and financial side of your business, you can never realize how an in-depth financial analysis can benefit your company. You should not sit back and relax if you have a good accounting process and your cash flow is under control. You should do an in-depth analysis of the financial position of your business on a regular basis. Company owners who have not been schooled in accounting often have a finite understanding of how financial analysis can help them manage their businesses effectively. Such business owners should find out where their business stands – perhaps quarterly.
Financial Statements
The company’s financial statements including the income statement, balance sheet, statement of changes in financial position and statement of changes in owners' equity, etc. will be your first reference for the assessment. You should monitor your periodic performance increase against your financial plan. These financial statements have certain limitations. They can only serve as the foundation for your analysis and won’t provide all the information you require.
Business Ratios
In order to know what the financial position of your company is, you must compare the true figures extracted from the financial statements to other figures. Such comparisons are the essence of business and financial ratios. These ratios can be established from the various key figures on the financial statements. Business ratios can be a powerful tool because they allow you to immediately grasp the relationship expressed. You can easily access your business performance over time by calculating and recording a group of ratios at the end of every accounting period. This will help you to compare your business with others in the industry.
The comparison of you ratios to those in other business will help you to see the possibilities for improvement in major areas. Among the dozens of financial ratios, Efficiency Ratios, Profitability Ratios, Solvency Ratios, Liquidity Ratios and Financial Ratios are some of the most commonly considered ratios to have the most value for making small business decisions.
Profit Analysis
A clear understanding of the financial impact of your most business decision will bring you a strong and successful business. Profit Analysis will help you to cope up with various problems like-- What is the most profitable product or service of your company? What will happen if the sales volume of the company drops? and many more about your business operations. It is a method to examine the relationship between your sales volume, your fixed and variable costs and your profits.

Know more about various other business tools, click on Fintel.

Posted by Robert at 6:30 AM | Comments (0)

Know, where your business stands financially

Analyzing the financial position of an organization plays one of the most significant roles in enhancing the business of that organization. Without having a detailed idea about the accounting and financial side of your business, you can never realize how an in-depth financial analysis can benefit your company. You should not sit back and relax if you have a good accounting process and your cash flow is under control. You should do an in-depth analysis of the financial position of your business on a regular basis. Company owners who have not been schooled in accounting often have a finite understanding of how financial analysis can help them manage their businesses effectively. Such business owners should find out where their business stands – perhaps quarterly.
Financial Statements
The company’s financial statements including the income statement, balance sheet, statement of changes in financial position and statement of changes in owners' equity, etc. will be your first reference for the assessment. You should monitor your periodic performance increase against your financial plan. These financial statements have certain limitations. They can only serve as the foundation for your analysis and won’t provide all the information you require.
Business Ratios
In order to know what the financial position of your company is, you must compare the true figures extracted from the financial statements to other figures. Such comparisons are the essence of business and financial ratios. These ratios can be established from the various key figures on the financial statements. Business ratios can be a powerful tool because they allow you to immediately grasp the relationship expressed. You can easily access your business performance over time by calculating and recording a group of ratios at the end of every accounting period. This will help you to compare your business with others in the industry.
The comparison of you ratios to those in other business will help you to see the possibilities for improvement in major areas. Among the dozens of financial ratios, Efficiency Ratios, Profitability Ratios, Solvency Ratios, Liquidity Ratios and Financial Ratios are some of the most commonly considered ratios to have the most value for making small business decisions.
Profit Analysis
A clear understanding of the financial impact of your most business decision will bring you a strong and successful business. Profit Analysis will help you to cope up with various problems like-- What is the most profitable product or service of your company? What will happen if the sales volume of the company drops? and many more about your business operations. It is a method to examine the relationship between your sales volume, your fixed and variable costs and your profits.

Know more about various other business tools, click on Fintel.

Posted by Robert at 6:30 AM | Comments (0)

Know, where your business stands financially

Analyzing the financial position of an organization plays one of the most significant roles in enhancing the business of that organization. Without having a detailed idea about the accounting and financial side of your business, you can never realize how an in-depth financial analysis can benefit your company. You should not sit back and relax if you have a good accounting process and your cash flow is under control. You should do an in-depth analysis of the financial position of your business on a regular basis. Company owners who have not been schooled in accounting often have a finite understanding of how financial analysis can help them manage their businesses effectively. Such business owners should find out where their business stands – perhaps quarterly.
Financial Statements
The company’s financial statements including the income statement, balance sheet, statement of changes in financial position and statement of changes in owners' equity, etc. will be your first reference for the assessment. You should monitor your periodic performance increase against your financial plan. These financial statements have certain limitations. They can only serve as the foundation for your analysis and won’t provide all the information you require.
Business Ratios
In order to know what the financial position of your company is, you must compare the true figures extracted from the financial statements to other figures. Such comparisons are the essence of business and financial ratios. These ratios can be established from the various key figures on the financial statements. Business ratios can be a powerful tool because they allow you to immediately grasp the relationship expressed. You can easily access your business performance over time by calculating and recording a group of ratios at the end of every accounting period. This will help you to compare your business with others in the industry.
The comparison of you ratios to those in other business will help you to see the possibilities for improvement in major areas. Among the dozens of financial ratios, Efficiency Ratios, Profitability Ratios, Solvency Ratios, Liquidity Ratios and Financial Ratios are some of the most commonly considered ratios to have the most value for making small business decisions.
Profit Analysis
A clear understanding of the financial impact of your most business decision will bring you a strong and successful business. Profit Analysis will help you to cope up with various problems like-- What is the most profitable product or service of your company? What will happen if the sales volume of the company drops? and many more about your business operations. It is a method to examine the relationship between your sales volume, your fixed and variable costs and your profits.

Know more about various other business tools, click on Fintel.

Posted by Robert at 6:30 AM | Comments (0)

July 17, 2009

Industry leaders seeks to increase profits with Business Financial Intelligence

One of the key challenges any business faces in times of turbulence is how to sustain and enhance profitability. Profit is, no matter how one puts it, the very motive of all commercial endeavors and the management is answerable to the stakeholders for the profitability performance.

Profit, simply put, is the gap that exists between a firm’s revenues and its expenditure. So, as long as the company is able to increase its revenues at a certain rate and its expenditure increase at an equal or lesser rate, the company’s profits are likely to improve – this is a layman view of things. Revenues are, in turn, dependent on volume and price.

Now, in a recessionary economy, there is a sure slump or stagnation expected in demand for almost all types of goods and services, so the volume is unlikely to go up. The prices can only go down in midst of low demand and competition so both the multipliers on which revenues depend are likely to shrink i.e. most companies are bracing for a deceleration, if not, decline in revenues.

However, this is where the management has to show its knowledge and skills to the stakeholders – ok, we know that there is a crisis situation but that is what we were hired for….if it were all smooth and easy, why would professional management ever be required…

This is where cost-cutting, production efficiency and smarter financial management can help. Increasingly, business analysis and financial benchmarking tools such as FINTEL’s Business Scorecard and Industry Metrics are being used by industry leaders seeking to sustain and enhance profitability. By highlighting areas of operational and financial inefficiencies, and presenting industry benchmarking and best practices data, these financial intelligence tools provided by FINTEL are helping managers to control costs and thus, maintain or even enhance the gap between revenues and expenditures.

The power of better financial management can just not be overemphasized. It is one of the few ways in which a company can not only survive the present slowdown, but enhance its margins and become a leaner, efficient organization with least wastage, a competitive advantage that cannot be easily lost to competition.

Posted by Robert at 3:00 AM | Comments (4)