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Use
your financial reports to increase your profit!
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 informed 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 July, 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.
Accounting software such as QuickBooks® can help you prepare
monthly financial reports.
The
use of ratios can help provide insight to your company's financial
health.
Here are
some common financial 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 is one of the
most important numbers for you to monitor regularly.
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
contact us today for an initial conference, free of charge,
to discuss the preparation of your financial statements.
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