Best Financial Statements Services
We can prepare or supervise the preparation of your financial statements. Then fully 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 as 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-day comparisons and to make quick management decisions, financial reports must be done monthly. “As goes the month, so goes the year.” With financial statements, you will be able to 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 will also be able to 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 sales per day will give you the number of sales per day 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. While we know that no one was born understanding financial information, we believe it is easier to learn than most people think.