In business, there's a requirement to have the entity's performance represented in numerical reports called financials. Despite this, the full potential of the information the numbers represent is seldom communicated in whole or understood by the reader.
This may be one of the reasons why businesses grow to a certain performance level and then stagnate - neither growing nor declining.
The numbers are able to describe matters pertaining to the following areas:
- The asset base and the level of liabilities
- The profitability of the entity
- Cash flow
- The earnings per share
- Share value
- Units in production
- Internal cost controls
- Ratio analysis
- Cost-Volume-Profit Analysis
- Forecasting methods
- Operations budgeting
- Cash management
- Capital budgeting
- Tax planning
The bulk of these elements seldom forms a part of the discussion at yearly AGMs/management meetings if they are held.
In short, we leave money on the table, even when professionals are paid to guide us through the process. These numbers can and should be used as a means for setting goals and then reviewing to see how close we have come to realising them.
It is time to stop playing business and get the necessary professionals on your team to help you navigate what you don't know. No one knows everything. Some of the best use of the business' resources is to invest in the use of professionals to which you have access to enable you to make and save your business' money. Too many people are seeking to do business on the cheap, which isn't budgeting by any stretch of the imagination.
If you don't understand some of the areas listed above, then please seek out your professionals to enable you to obtain clarity. Learn how to make the numbers of your business work for your benefit.
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