We
can prepare or supervise the preparation of your financial
statements. Compiled, reviewed, or audited statements
can be provided according to your needs.
More
importantly, we can help you use these statements, as
well as other reports, to better manage your business
and increase your profitability.
Good
financial records are necessary for several reasons:
 |
Daily
operating decisions are based on financial reports. |
|
Bank
loans require reports of past performance. |
|
Tax
return numbers need proper substantiation. |
Prepare
financial reports monthly. For year-to-date comparisons
and to make quick management decisions, financial reports
must be done monthly. "As goes the month, so goes
the year." You can compare the sales, gross profit,
and net profit at, say, the end of May, with prior years
and get a good idea of how the current year will finish.
You can compare the total accounts receivable or payables
with prior years to spot problems and then quickly take
corrective action.
Here
are some common business ratios you should monitor on
a month-by-month and a year-by-year basis:
| |
Current
ratio - Current assets divided by current
liabilities will measure your ability to pay your
current debts. |
| |
Debt
to equity ratio - Total liabilities divided
by net worth will provide you with a year-to-year
comparison of your ownership in the company. |
| |
Receivables
outstanding - Receivables divided by average
day's sales will give you the number of days' sales
on the books. |
| |
Profit
margin - Gross profit divided by net sales will
allow you to compare your business operations to
other companies in your industry, as well as monitor
your own operations over time. |
Understanding
financial statements can increase business profits.
If you would like to learn more about using financial
statements to make sound business decisions, we would
be happy to assist you. No one was born understanding
financial information, but it is easier to learn than
most people think.
Please
ask as many questions as you like; we will help you
until you are comfortable with business numbers and
can use yours to increase your profitability.
Our Accounting Services:
Business Accounting Solutions
Financial Statements for Business
Business Record Keeping
Business Tax Preparation
