Posts Tagged ‘financial statements’

Some Key Financial Indicators

If you are attempting to manage a business you must have timely and meaningful financial indicators. Many companies do this with some sort of financial dashboard, but whatever your method, here are a few things to be on top of.

Some Balance Sheet Data

Keep up with some key balance sheet data. This should be done at a minimum monthly, but preferably weekly or even daily, depending on the particular piece of information. Here are some of the key financial indicators to track: Read the rest of this entry »

Share

5 Tips About the Income Statement

I’m amazed at how often someone looks at their company’s income statement and immediately zeroes in on the bottom line; the net profit. Of course, the net profit is important, but if you stop there you will miss some useful information that can be obtained from this statement. Here are 5 tips about the income statement.

Patterns and Trends

It helps to dig into the individual lines on the income statement. For example, suppose you are a distributor. Take a look at Read the rest of this entry »

Share

Balanced Approach to Financial Management

I remember a partner in a small CPA firm telling a story from early in his career. He said he had been given the task of creating a balance sheet for a client. When it was in balance he declared, “It balances, so it must be correct.” Of course the balance sheet must balance, but he quickly learned there was a lot more to it than that.

Balance Does Matter

One of the first areas where a company often displays a lack of balance is on the importance of the different financial statements. The income statement shows the results of activities over a specific period of time, while the Read the rest of this entry »

Share

Income Statement Snapshot

When you read your Income Statement (Profit and Loss Statement) what is your process? Do you just look to see if you made a profit? Try digging a little deeper.

The Big Picture

In the post Balance Sheet | A Different Look we took a look at how we first examine a balance sheet from an overall perspective, much like we look at a family photo. As this is done certain items will Read the rest of this entry »

Share

Balance Sheet | A Different Look

When you look at a family photo there is something interesting that happens. While at first you may look at the group as a whole, if you look long enough you will invariably begin to think about specific individuals in the picture. You may think about the unique traits they have they you really like or even those traits that can drive you nuts. Do you sometimes find yourself thinking how much someone adds to your family? Perhaps you are even reminded of the challenges someone presents. So, what does this have to do with a company’s balance sheet?

The Balance Sheet in Total

At first glance a balance sheet may look like just a bunch of numbers, but we know Read the rest of this entry »

Share

Fixed or Changing?

You probably have heard the line from Gertrude Stein, “A rose is a rose is a rose” which we take to mean “things are what they are.” For example, when traveling from destination A to destination B, A will remain A and B will remain B. How we travel from A to B may change, but we are still trying to get from A to B.

What Does This Have to Do With Business?

In business it is important to know what is fixed, what changes, and what seldom changes. An unchanging aspect for business would be something like Read the rest of this entry »

Share

Private Company Reporting is Changing

Reporting for U.S. non-public small to medium size businesses is in transition. Many of these companies are owned by one person or just a few owners. A family owned and operated company would be an example of this. The American Institute of Certified Public Accountants (AICPA) has been addressing the reporting for these companies in an attempt to improve the usefulness of reporting. They have released a framework for this. Basically this would represent a new reporting option for non-GAAP (Generally Accepted Accounting Principles) financial statements. This guidance from the AICPA is known as the Read the rest of this entry »

Share

QuickBooks – Know Your Roles

Understanding QuickBooks roles when using QuickBooks is critical, and the failure of an employee to know and understand their role can be highly destructive of the software’s usefulness. An example is the failure to use items or using them incorrectly.

Recording Sales

Items are essential to the correct functioning of QuickBooks. Without the use of items there is very little you can do in QuickBooks. Items are used in recording Read the rest of this entry »

Share

Do You Need QuickBooks?

The title of this is really intended to get you thinking. Whether it’s QuickBooks or something else, you do need some kind of accounting system, and preferably something besides a manual system. While there are still companies that can get by with a manual system, even most of these would reap significant benefits from an accounting software package.

Accounting or Accounting Plus

Sometimes requirements involve more than just a basic accounting system. For example, if the items you sell Read the rest of this entry »

Share

Financial Statements are More than Results

It’s easy to get lost in all the numbers when reading financial statements, particularly for those who rarely read them. By financial reports I mean not just the big three; i.e. the Balance Sheet, the Income Statement, and the Statement of Cash Flow. This also encompasses the supporting schedules and analysis as well.

Results Matter, But

Taking just the three main financial statements, it is important to asses the overall results. For the income statement look at profitability, but also consider Read the rest of this entry »

Share

Enter your email address:

Delivered by FeedBurner